On September 21, the New York City Department of Consumer and Worker Protection (DCWP) submitted a comment letter on NYDFS’s proposed BNPL regulations (3 NYCRR 423), which would implement the state’s Buy-Now-Pay-Later Act by establishing licensing, disclosure, and consumer-protection requirements for BNPL lenders (previously covered by InfoBytes here). While broadly supportive of the proposed rule, DCWP urged NYDFS to explicitly extend the regulations to cover “Care Now Pay Later” (CNPL) products used for medical and dental treatments and “Rent Now Pay Later” (RNPL) products marketed for housing payments, stating that the department does not believe that the present statutory definition properly encompasses such products. DCWP argued that these specialized deferred-payment products pose the same risks as traditional BNPL loans but target consumers in especially vulnerable circumstances. The department recommended shortening the proposed 180-day implementation timeline to 60 or 90 days, citing concerns about “severe financial harm to consumers.”

The comment letter included six specific recommendations. In addition to broadening the definitions to cover CNPL and RNPL products, DCWP urged NYDFS to: (i) expand protections against deceptive advertising by requiring disclosure of all material conditions — including deferred interest accrual and late-payment penalties — at the point of sale; (ii) strengthen document-retention requirements to include the duration and forum of each advertisement and grant access to other government bodies; (iii) require that consumers receive post-transaction disclosures by email and, where enrollment occurs in person, in hard copy; (iv) require BNPL lenders to include in vendor agreements the vendor’s obligation to respond to refund inquiries; and (v) expand billing-error notice delivery methods to include email and webforms while prohibiting the sole use of AI or automated systems to resolve disputes. DCWP further urged NYDFS to use its enforcement authority under Section 1042 of the Dodd-Frank Act to address unfair, deceptive, and abusive acts or practices, and recommended that the state grant parallel enforcement authority to the city.