Sezzle Pivots to National Bank Charter as BNPL Scrutiny Rises
Sezzle relies on Utah-chartered industrial bank WebBank to originate most loans offered through its buy now, pay later platform. That model faces growing scrutiny as U.S. states tighten licensing, interest-rate and consumer-protection rules and challenge some Banking-as-a-Service arrangements. Sezzle, which had previously explored a Utah industrial loan company charter, is shifting toward a federal national bank charter to reduce state-by-state compliance risk and gain greater control over lending.
Sezzle said on Aug. 6, 2026, that it plans to submit its national bank charter application to the Office of the Comptroller of the Currency in the third quarter. Chief Financial Officer Lee Brading said the OCC targets about 120 days from filing to a conditional decision, though Federal Deposit Insurance Corp. and Federal Reserve approvals would still be required. Sezzle expects the full process to take 12 to 18 months.
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The history behind this eventNew York, Oregon Tighten BNPL Licensing Rules
Buy now, pay later products typically split a retail purchase into four installments and often carry no interest, but missed payments can trigger fees and borrowers can stack loans across platforms. The six largest providers originated 277.3 million loans financing $33.8 billion of merchandise in 2022, according to the Consumer Financial Protection Bureau. After the CFPB said in May 2025 it would deprioritize enforcement of a Biden-era BNPL policy, states moved to fill the gap, raising the prospect of costly, fragmented licensing for lenders operating nationwide.
New York’s Department of Financial Services formally published BNPL rules on July 15, 2026, opening a 60-day comment period through September 14. The proposal requires licensing, provides an $8 safe harbor for penalty fees and would take effect 180 days after adoption. Oregon’s Division of Financial Regulation separately proposed requiring nonbank lenders and service providers to obtain licenses. Loans of $50,000 or less due within 60 days would fall under payday-lending rules, while longer-term products would require consumer-finance licenses. Oregon’s comment period closed July 17, as industry critics warned the guidance stretches decades-old statutes beyond their intended scope.
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