S. 3561

119 S3561 IS: Buy Now, Pay Later Protection Act of 2025
 U.S. Senate
 2025-12-18
 text/xml
 EN
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 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 ).
 .