New York Proposes New Regulations for Buy-Now-Pay-Later Loans

On February 23, the New York Department of Financial Services (“DFS”) published proposed rules to implement the state’s Buy-Now-Pay-Later Act (BNPL Act), which was enacted on May 9, 2025. The proposed rules, among other things, establish a licensing and supervision framework for persons offering BNPL loans to New York consumers, as well as persons to whom ownership of such BNPL loans is transferred; limit penalty fees to $8, unless the lender receives approval from DFS to charge a higher fee, which must be reevaluated annually; limit other charges, such as tips or gratuities; require BNPL lenders to make certain consumer disclosures before a transaction, after a transaction, and periodically; require BNPL loans to be underwritten; impose consent and disclosure requirements related to consumer data protection; and impose foreign language support obligations for BNPL lenders. Once the proposed rule is published in the State Register, there will be a 60-day period for comments.

On February 27, the Office of the Comptroller of the Currency (“OCC”) issued a final rule amending its national bank chartering regulation to clarify the scope of its authority to charter national banks limited to the operations of a trust company and related activities. The rule revises the OCC’s regulation to replace references to “fiduciary activities” with “operations of a trust company and activities related thereto,” aligning the regulatory text with the statutory authorization in the National Bank Act and addressing confusion about the activities such institutions may conduct. According to the OCC, the amendments are intended to clarify — rather than expand or contract — the OCC’s chartering authority and confirm that national trust banks may engage in certain non-fiduciary activities related to trust company operations. The OCC also confirmed that the final rule imposes no new mandates or compliance requirements and is not expected to have a significant economic impact on affected institutions. The rule becomes effective on April 1.

On March 3, the OCC announced two final rules intended to reduce regulatory burdens for community banks.

First, the OCC issued a final rule rescinding its Fair Housing Home Loan Data System regulation (12 CFR 27), eliminating legacy data-collection requirements applicable to national banks that the OCC determined are largely duplicative of other statutory and regulatory reporting obligations used in fair lending supervision. The OCC stated that removing the regulation should not materially affect the availability of information needed for fair housing-related oversight.

In another final rule, the OCC amended its licensing regulations for corporate activities and transactions to expand eligibility for expedited or reduced filing procedures for certain community banks. Among other changes, the rule introduces a definition of a “covered community bank or covered community savings association” — generally institutions with less than $30 billion in assets, that are well capitalized and not subject to certain enforcement actions — that may qualify for streamlined licensing processes. The OCC explained that the changes are intended to tailor regulatory requirements to institutional risk profiles and allow community banks to devote greater resources to serving local economies.

Both final rules become effective on April 3.

On February 23, the Board of Governors of the Federal Reserve System (“Federal Reserve”) issued a notice of proposed rulemaking to codify the removal of reputation risk from its supervisory framework for banks. The proposed rule follows the Federal Reserve’s earlier announcement that reputation risk would no longer be incorporated into examination programs and reflects its policy that institutions should not be penalized for providing banking services to customers engaged in lawful activities. The Federal Reserve explained that the proposed rule would not alter expectations that banks maintain strong risk management to ensure safety and soundness and compliance with applicable laws and regulations. Rather, the proposed rule is intended to clarify that supervisory decisions should focus on material financial risks, promote greater consistency and precision in examinations, and reinforce the Federal Reserve’s emphasis on core financial risks in bank supervision. Comments are due by April 27.

On February 25, the OCC issued a notice of proposed rulemaking to implement the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, governing permitted payment stablecoin issuers and certain related activities of OCC-supervised institutions. The proposed rule would establish a regulatory framework addressing reserve asset requirements, capital and risk management expectations, and supervisory standards for permitted payment stablecoin issuers under OCC jurisdiction. Among other things, the proposed rule would require issuers to maintain reserves sufficient to support redemption of outstanding stablecoins and demonstrate the ability to monetize reserve assets to meet redemption demands. The proposed rule also contemplates regular OCC supervision and examinations, as well as weekly confidential reporting and quarterly financial condition reports regarding issuance activity, trading volume, and reserve holdings. The proposed rule does not address Bank Secrecy Act, anti-money laundering, or sanctions compliance requirements, which the OCC indicated will be addressed in a separate rulemaking coordinated with the Treasury Department. Comments are due by May 1.

On February 27, the Federal Deposit Insurance Corporation (“FDIC”) approved the deposit insurance application submitted by The Jones Financial Companies, L.L.L.P. to establish Edward Jones Bank, a proposed Utah-chartered industrial bank to be headquartered in Salt Lake City. According to the FDIC, the bank’s business model will focus on offering securities-based lending nationwide, funded primarily by sweep deposits from existing clients of Edward D. Jones & Co., L.P. The FDIC’s approval is subject to several conditions outlined in the agency’s order, including that the bank maintain initial paid-in capital of at least $330 million and a minimum Tier 1 leverage ratio of 9%. The bank’s parent entities must also enter into capital and liquidity maintenance agreements with the FDIC and provide ongoing support for the bank’s capital and liquidity positions.

On February 24, the US Securities and Exchange Commission (“SEC”) Division of Enforcement (Division) issued its first comprehensive update to the Enforcement Manual since 2017, signaling a renewed emphasis on fairness, transparency, and consistency in enforcement practices. The revisions, which the SEC will now review annually, aim to standardize procedures across investigations and provide clearer expectations for market participants. Notable changes include a more structured Wells process, giving respondents more predictable timelines, enhanced guidance on submissions, and formalizing senior leadership engagement before enforcement recommendations go forward. The update restores the practice of simultaneous consideration of settlement offers and related waiver requests, offering parties greater certainty about collateral consequences. The manual also expands guidance on how cooperation and remediation influence outcomes and codifies procedural reforms such as updated formal order processes and criminal referral criteria. These revisions, while not binding law, serve as a roadmap for companies and counsel navigating SEC inquiries and enforcement actions. Read more about the manual update in a recent Goodwin Client Alert.