New federal regulations governing Buy Now Pay Later services have taken effect, requiring BNPL providers to report payment history to credit bureaus, provide standardized cost disclosures, and offer dispute resolution procedures equivalent to credit cards.
The regulations, issued by the CFPB, bring BNPL under the same consumer protection framework as traditional credit products. Providers including Affirm, Klarna, Afterpay, and PayPal Pay Later must now comply with Truth in Lending Act requirements.
The credit reporting requirement is particularly significant. On-time BNPL payments will now help consumers build credit scores, while late payments will also be reported. This creates both opportunity and risk for the estimated 60 million Americans who use BNPL services.
Mandatory disclosures must clearly state the total cost of the installment plan, any fees or interest charges, and the consequences of late payment. Previously, some BNPL providers presented plans as "interest-free" while charging late fees that effectively amounted to significant interest rates.
Consumer advocates praise the regulations, arguing they bring necessary transparency to a rapidly growing market. BNPL providers have generally adapted, with most saying they already met or exceeded the new requirements. The industry generated $100 billion in US transaction volume in 2025.
