WASHINGTON, D.C. – The Financial Technology Association sent a letter to the Illinois House Judiciary – Civil Committee on Senate Bill 3561, the BNPL Loan Consumer Protection Act. While FTA appreciates the improvements included in the final bill that passed the Senate, several provisions remain that would impose duplicative and ill-fitting regulatory requirements, including for many BNPL providers already operating under federal oversight.
Pay-in-Four BNPL products offer consumers a way to split purchases into installments with key protections built in, with no revolving balances, no hidden fees, and fixed repayment dates. According to the Consumer Financial Protection Bureau, the average loan size is $135, and 96% of loans are paid in full and on time, with default rates of 2% compared to 10% for credit cards among the same borrowers.
FTA’s outstanding concerns include application of TILA credit card dispute rights that are ill-fitting for closed-end products, autopay and account debit restrictions that conflict with federal regulations and NACHA standards, an APR-based fee cap that is ill-fitting for closed-end, short-term loans, and provisions that contravene current law relating to bank-fintech partnerships.
Access FTA’s full letter here.
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