Buy Now, Pay Later Protection Act of 2025

Key Points

• This bill would require 'buy now, pay later' companies to follow the same federal rules as credit card companies. These services, which often let you pay for a purchase in four interest-free installments, are currently not covered by many of the same consumer protection laws that apply to traditional credit.
• If passed, users would gain the legal right to dispute charges for items that are broken, never arrive, or were charged in error. This gives shoppers a way to get their money back through the lender, similar to how you can call a credit card company to fix a billing mistake.
• The bill gives the Consumer Financial Protection Bureau (CFPB) the power to supervise these lenders. This means the government can regularly check the companies' books and business practices to make sure they aren't using unfair tactics or hidden fees to take advantage of customers.
• The goal is to close a loophole in the Truth in Lending Act. Because many of these plans don't charge interest, they have avoided strict disclosure rules. This bill ensures that even interest-free loans must provide clear information to consumers about what they owe and when.
• The CFPB would be required to write and finalize specific new rules for these companies within one year of the bill becoming law.