Buy Now, Pay Later Protection Act of 2025

119 S3561 IS: Buy Now, Pay Later Protection Act of 2025 U.S. Senate 2025-12-18 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain. II 119th CONGRESS 1st Session S. 3561 IN THE SENATE OF THE UNITED STATES December 18, 2025 Mr. Reed (for himself, Mr. Van Hollen , Mr. Blumenthal , and Mrs. Gillibrand ) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To amend the Truth in Lending Act and the Consumer Financial Protection Act of 2010 to apply certain protections and oversight to buy now, pay later loans, and for other purposes. 1. Short title This Act may be cited as the Buy Now, Pay Later Protection Act of 2025 . 2. Application of the Truth in Lending Act to buy now pay later loans (a) In general The Truth in Lending Act ( 15 U.S.C. 1601 et seq. ) is amended— (1) in section 103 ( 15 U.S.C. 1602 ), by adding at the end the following: (ff) Buy now, pay later loan The term buy now, pay later loan means a closed-end consumer loan for a retail transaction that— (1) is repaid in not more than 4 interest-free installments; and (2) does not impose a finance charge. ; (2) in section 127 ( 15 U.S.C. 1637 )— (A) in subsection (a), by striking under an open end consumer credit plan and inserting under an open end consumer credit plan or a buy now, pay later loan each place it occurs; and (B) in subsection (b), by striking under an open end consumer credit plan and inserting under an open end consumer credit plan or a buy now, pay later loan each place it occurs; (3) in section 170 ( 15 U.S.C. 1666i )— (A) in the section heading, by striking Rights of credit card customers. and inserting Rights of credit card customers and buy now, pay later loan customers. ; (B) in subsection (a)— (i) by striking a card issuer who has issued a credit card to a cardholder pursuant to an open end consumer credit plan and inserting a card issuer who has issued a credit card to a cardholder pursuant to an open end consumer credit plan or a creditor who has provided a buy now, pay later loan to a consumer ; (ii) by striking in which the credit card and inserting in which the credit card or buy now, pay later loan ; (iii) by striking honoring the credit card and inserting honoring the credit card or buy now, pay later loan each place it occurs; (iv) by striking provided by the cardholder and inserting provided by the cardholder or consumer ; (v) by striking defenses against a card issuer and inserting defenses against a card issuer or creditor ; (vi) by striking is the same person as the card issuer and inserting is the same person as the card issuer or creditor ; (vii) by striking is controlled by the card issuer, and inserting is controlled by the card issuer or creditor, ; (viii) by striking common control with the card issuer and inserting common control with the card issuer or creditor ; (ix) by striking in the card issuer's products and inserting in the card issuer's or creditor’s products ; (x) by striking by the card issuer in which and inserting by the card issuer or creditor in which ; and (xi) by striking using the credit card issued by the card issuer and inserting using the credit card issued by the card issuer or the buy now, pay later loan provided by the creditor ; and (C) in subsection (b)— (i) by striking asserted by the cardholder and inserting asserted by the cardholder or consumer ; (ii) by striking at the time the cardholder first notifies the card issuer or the person honoring the credit card of such claim or defense and inserting at the time the cardholder or consumer first notifies the card issuer or creditor or the person honoring the credit card or buy now, pay later loan of such claim or defense ; and (iii) by striking the cardholder's account and inserting the cardholder's account or the consumer's buy now, pay later loan account ; (4) in section 161 ( 15 U.S.C. 1666 )— (A) in subsection (a), in the matter preceding paragraph (1), by striking in connection with an extension of consumer credit, and inserting in connection with an extension of consumer credit, including a buy now, pay later loan, ; and (B) in subsection (d), by striking an open end consumer credit plan and inserting an open end consumer credit plan or a buy now, pay later loan ; and (5) in section 171(a) ( 15 U.S.C. 1666i–1 ), by striking In the case of any credit card account under an open end consumer credit plan and inserting In the case of any credit card account under an open end consumer credit plan or buy now, pay later loan . (b) Rulemaking Not later than 1 year after the date of enactment of this Act, the Consumer Financial Protection Bureau shall issue such rules as the Bureau determines necessary to carry out the amendments made by subsection (a). 3. Federal supervision of buy now, pay later loan lenders Section 1024(a)(1) of the Consumer Financial Protection Act of 2010 ( 12 U.S.C. 5514(a)(1) ) is amended— (1) in subparagraph (D), by striking ; or and inserting a semicolon; (2) in subparagraph (E), by striking the period at the end and inserting ; or ; and (3) by adding at the end: (F) offers or provides to a consumer a buy now, pay later loan, as defined in section 103 of the Truth in Lending Act ( 15 U.S.C. 1602 ). .