Oregon Proposes Licensing Rules for BNPL Providers

Buy now, pay later (BNPL) lets shoppers receive goods immediately and repay on a fixed schedule, often without interest. The dominant “Pay in Four” model takes 25% upfront and three equal payments every two weeks. Oregon regulators view these products as installment loans rather than retail layaway arrangements, making their treatment under existing lending laws important for consumer protections and the compliance costs facing providers serving residents of the state.

The Oregon Department of Consumer and Business Services’ Division of Financial Regulation proposed a bulletin in June requiring nonbank BNPL lenders and service providers to secure a payday and/or consumer finance license through NMLS, depending on repayment length. Oregon’s consumer finance license covers loans of $50,000 or less with terms longer than 60 days. Comments closed at 5 p.m. on July 17. The American Fintech Council said on July 20 that it opposed applying rules designed for high-cost payday lending and urged a formal, stakeholder-driven rulemaking process.