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TODAY’S TOP STORIES

1. ILLINOIS BECOMES THE THIRD STATE TO IMPOSE REAL CONSUMER PROTECTIONS ON BNPL LENDERS

Illinois Governor J.B. Pritzker signed SB3561 on June 25, making the Buy Now Pay Later Loan Regulation Act law. Effective immediately, BNPL lenders must be licensed in Illinois, cap rates at the existing 36% ceiling that applies to other consumer lenders, conduct ability-to-repay underwriting before originating, and disclose all costs upfront. The law also prohibits automatic payment mandates and bars lenders from re-debiting a failed bank account more than once — a practice that triggered cascading overdraft fees for subprime borrowers. BNPL’s user base skews heavily toward people with subprime credit scores and is disproportionately Black, Hispanic, female, and young.

So what? California required licensing, New York passed the first comprehensive framework — Illinois is the third domino in a growing state-level BNPL regulatory ring that is filling the vacuum left by the CFPB’s rollback. Illinois is the third-largest US state by population. Watch for a domino effect in other large states — NCLC has already published a template other legislatures can follow.

→ Source: NCLC