Assemblyman Chigozie U. Onyema (D‑28) introduced legislation on Oct. 26, 2026, that would impose state licensing and consumer protections on lenders offering buy now, pay later (BNPL) loans in New Jersey. The measure, filed as Bill A5664, aims to rein in fees and increase transparency for a financing product that has seen rapid adoption among U.S. shoppers.
What the bill would require
Under A5664, entities making BNPL loans in New Jersey would need a state license. The bill also directs regulators to limit fees and interest rates, require clearer disclosure of loan terms, adopt responsible‑lending standards and set up procedures for resolving consumer disputes. The proposal frames BNPL as a short‑term credit product that can carry significant costs for borrowers who miss payments.
- Licensing: BNPL providers would be subject to state licensing rules.
- Fee and rate limits: The bill would impose caps on fees and interest charged to consumers.
- Required disclosures: Lenders must present loan terms more clearly to borrowers at checkout.
- Consumer protections: Standards for responsible lending and an internal dispute resolution process would be mandated.
Onyema framed the legislation as a response to the risks he says BNPL can create for financially vulnerable households. He noted that consumers increasingly use the products to cover essentials and that missed payments often generate additional charges.
“Buy Now, Pay Later loans offer short-term flexibility and convenience, but for too many, they create long-term financial risks,” Assemblyman Onyema said.
Context and who uses BNPL
The bill cites data from Protect Borrowers, a consumer advocacy group, which reports that nearly half of Americans have used BNPL financing and that almost half of BNPL users missed a payment in the past year. Protect Borrowers also says women and people of color are more likely to use BNPL products, trends advocates tie to persistent income and wealth gaps.
Major BNPL providers operating in the U.S. market include Klarna, Affirm, Afterpay, PayPal, Sezzle and Zip; the bill does not single out individual companies but would apply to lenders doing business in New Jersey.
Implications for states and federal policy
Onyema said New Jersey should not wait for federal rules. The proposal follows his recent leadership on the Fair Price Protection Act, which banned surveillance pricing in grocery retail. If enacted, A5664 would join a growing list of state initiatives to regulate fintech products in the absence of comprehensive federal legislation.
State licensing could tighten market entry and require BNPL firms to adapt disclosures and underwriting practices. It could also create regulatory friction where lenders operate across state lines unless federal standards emerge.
The bill was introduced Oct. 26, 2026, and faces the state legislative process before any enactment. The text of A5664 and formal legislative analyses will determine the precise caps, disclosure language and enforcement authorities that would take effect if the measure advances.
