SPRINGFIELD — State Senator Michael E. Hastings is speaking out on the need for stronger oversight of Buy-Now-Pay-Later programs, a fast-growing form of short-term credit that allows consumers to pay for purchases in installments.
“These programs may seem convenient at first, but they can carry hidden costs, unexpected fees and financial risks that often go unnoticed until it is too late,” said Hastings (D-Frankfort). “Young people, low-income families and those on fixed incomes are especially vulnerable. Illinois consumers deserve clear information, protections and accountability from lenders.”
Hastings advanced legislation that would require BNPL lenders to register with the state and provide full disclosures about repayment terms, interest rates and potential fees while maintaining fair and transparent dispute or refund processes. The legislation also would ensure consumers understand the total cost of borrowing and can make informed financial decisions.
The measure is intended to protect consumers while allowing responsible BNPL programs to operate fairly. Hastings emphasized that accountability and transparency are key to preventing abusive practices and promoting financial literacy across the state.
“The rapid expansion of Buy-Now-Pay-Later loans has outpaced oversight,” said Hastings. “Without clear rules, consumers can quickly find themselves trapped in debt or facing unexpected penalties. This legislation is about leveling the playing field and making sure families know exactly what they are signing up for.”
Senate Bill 3561 passed the Senate Judiciary Committee Wednesday.
