Fintech · Industry brief

Illinois enacted the Buy-Now-Pay-Later Loan Consumer Protection Act on June 25, establishing a licensing and regulatory framework for BNPL lenders administered by the Illinois Department of Financial and Professional Regulation. The law, which took effect immediately but requires compliance by January 1, 2028, mandates BNPL lenders to obtain licenses ($5,000 fee plus $50,000 surety bond), conduct risk-based underwriting, provide clear disclosures compliant with the Truth in Lending Act, and prohibit automatic payment requirements, multiple debit attempts without approval, and tips or expedited fees. The Act applies broadly to anyone offering, purchasing, or arranging BNPL loans (defined as closed-end credit payable in four or fewer installments or within 120 days), with an anti-evasion provision targeting bank partnerships and third-party origination structures; existing lenders may operate provisionally if they apply for licensing by January 1, 2028. Enforcement authority rests with the DFPR Secretary, who may impose civil penalties up to $25,000 per offense, revoke licenses, or seek injunctive relief, and violations of unlicensed lending void all loans and collection rights.

""

The FTC recently pursued enforcement action against alleged violations of the FTC Act and ROSCA (Restore Online Shoppers Confidence Act), focusing on negative option features, automatic renewals, subscription disclosures, free trial conversions, and cancellation practices. The agency's allegations centered on insufficient disclosure of key subscription terms including automatic renewal provisions and early cancellation fees, as well as burdensome cancellation processes for consumers. This action reflects the FTC's broader enforcement trend in the payments space, targeting companies that fail to provide clear subscription term disclosures or maintain simple cancellation mechanisms, underscoring regulatory priorities around consumer protection in subscription and billing practices despite concurrent changes at the CFPB.

The American Fintech Council submitted comments to FinCEN on proposed Anti-Money Laundering and Countering the Financing of Terrorism program rulemaking, advocating for outcome-based rather than procedural compliance frameworks. AFC, representing over 150 member companies including banks, payments firms, and fintech companies, urged FinCEN to adopt risk-based supervision that avoids duplicative obligations, preserve flexibility for differing institutional models including bank-fintech partnerships, and establish clear supervisory safe harbors for good-faith risk-based judgments. The council also called for technology-neutral standards that actively encourage adoption of artificial intelligence, machine learning, and advanced analytics in AML/CFT compliance, greater consistency across regulators to reduce fragmentation, and structured feedback loops on suspicious activity reporting utility to help institutions calibrate monitoring toward higher-value outcomes.