HARTFORD, Conn.—With CFPB oversight of buy now, pay later lenders effectively dismantled by the Trump Administration, Connecticut Attorney General William Tong is leading a seven-state coalition demanding answers from the nation’s largest BNPL firms.
The group this week sent letters to six major providers seeking extensive information about their pricing, repayment practices, and consumer disclosures—an effort aimed at determining whether the fast-growing industry is putting residents at financial risk.
The multistate action comes after the Trump-led CFPB rescinded a Biden-era rule that would have required BNPL lenders to follow the same consumer-protection standards as traditional creditors. Now, with federal protections rolled back, states are stepping in: Tong and fellow attorneys general are pressing Affirm, Afterpay, Klarna, PayPal, Sezzle, and Zip to explain how they assess borrowers’ ability to repay, how they handle disputes, and what fees or penalties consumers may face.
As a part of this inquiry, Tong is asking BNPL providers to explain how they asses a consumer’s financial capacity to repay these loans, and to provide information related to billing practices, late fees, and the handling of disputed charges.
“Buy now, pay later may appear to be a convenient way to afford a purchase, especially now during the holiday season, but shoppers need to watch out for debt traps. We’re asking the six largest buy-now-pay-later lenders for detailed information on their costs and fees, their disclosures, how they vet their customers’ abilities to pay, among other questions. As Trump rescinds critical protections for buy-now-pay-later consumers, it’s up to states now to ensure shoppers know what they are getting into, and to ensure these companies are held accountable,” said Tong in a release.
The release noted that BNPL industry has scaled quickly as consumers use the loans for a wide range of goods and services, from clothing and groceries to event tickets, and that during the holiday shopping season consumers are increasingly relying on BNPL loans.
Tong joined a coalition of attorneys general in 2022 urging federal regulation of the BNPL industry, raising concerns that by touting quick credit application approvals and convenient, flexible payment schedules, BNPL loans and services are particularly appealing to borrowers already struggling with debt or younger borrowers who lack experience with credit. The attorneys general also pointed out that, similar to predatory lending products, BNPL loans may contain terms and features that are known to trap people in cycles of debt.
The CFPB issued an interpretive rule in 2024 clarifying that BNPL providers are covered under the federal Truth In Lending Act (TILA), meaning they have to give consumers the same clear disclosures and protections as traditional credit products. However, under the Trump Administration, the CFPB rescinded the rule in May 2025.