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SENATE DOCKET, NO. 1750 FILED ON: 1/19/2023
SENATE . . . . . . . . . . . . . . No. 692
The Commonwealth of Massachusetts
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PRESENTED BY:
Susan L. Moran
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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:
The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
An Act protecting consumers engaging with buy now pay later lenders.
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PETITION OF:
NAME:DISTRICT/ADDRESS :Susan L. MoranPlymouth and Barnstable 1 of 3
SENATE DOCKET, NO. 1750 FILED ON: 1/19/2023
SENATE . . . . . . . . . . . . . . No. 692
By Ms. Moran, a petition (accompanied by bill, Senate, No. 692) of Susan L. Moran for
legislation to protect consumers engaging with buy now pay later lenders. Financial Services.
The Commonwealth of Massachusetts
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In the One Hundred and Ninety-Third General Court
(2023-2024)
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An Act protecting consumers engaging with buy now pay later lenders.
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
of the same, as follows:
1 SECTION 1. Notwithstanding any general or special law to the contrary, a person or
2entity shall be considered a small loan business and third party loan servicer in the
3commonwealth, and shall be subject to sections 96 to 114 of chapter 140, section 24(a) of
4chapter 93, 209 CMR 18.00, and 209 CMR 20.00 if:
5 (a) The person or entity offers payment plans to any person or entity located in
6Massachusetts that:
7 (1) Provide an alternative payment method for online merchandise purchases;
8 (2) Provide the initial funding for the purchase to the online merchandise provider;
9 (3) Allow the purchaser to pay scheduled installments to the person or entity as a third
10party; and 2 of 3
11 (4) May charge interest on the scheduled installments or fees for any late payments made
12on any installments.
13 SECTION 2. Notwithstanding any general or special law to the contrary, pursuant to the
14authority granted in section 110 of chapter 140 of the General Laws, the commissioner of banks,
15or any subdivision of the division of banks that the commissioner directs, shall investigate the
16following companies to determine if said companies or any of their subdivisions or subsidiaries
17have operated or are currently operating as small loan businesses or third party loan servicers in
18the commonwealth:
19 (a) Afterpay Limited;
20 (b) Klarna Bank AB;
21 (c) Zip Co Limited;
22 (d) PayPal Holdings, Inc;
23 (e) Sezzle Inc; and
24 (d) Any other companies as determined by the division of banks to perform the same
25primary business function as the companies named in sections (a) through (e).
26 If the division of banks determines that any of the aforementioned companies has
27operated as a small loan business or third party loan servicer in Massachusetts, the commissioner
28of banks shall take any and all actions necessary to bring said companies into compliance with
29state law and shall require that said companies apply for a small loan business license within 6
30months of the division of banks’ determination. 3 of 3
31 SECTION 3. Notwithstanding any general or special law to the contrary, pursuant to the
32authority granted in section 97 of chapter 140 of the General Laws, the commissioner of banks
33shall promulgate regulations to ensure that any person or entity engaging in behavior as defined
34in section 1 of this act shall be required to hold a small loan business license to continue such
35business operations in the commonwealth.
36 SECTION 4. Chapter 140 of the General Laws is hereby amended by inserting, after
37section 94A, the following section:-
38 Section 94B. Disclosure of rates and fees
39 Any small loan business or third party loan servicer offering services to persons located
40in the commonwealth shall disclose, to the person or entity to whom the loan is being offered,
41upon the point of sale, the following:
42 (a) The full and final amount to be paid for the loan, including interest, if all payments
43are made on time and according to the loan contract;
44 (b) The maximum monetary penalty amount that could possibly be incurred from late
45payments on any of the payments detailed in the loan contract;
46 (c) The aggregate amount owed if any combination of the payments are late; and
47 (d) Whether the loan servicer will disclose any late payments to any credit reporting
48companies or any other entities, and the accompanying risk to credit score and subsequent
49consequences;
50 SECTION 4. This act shall take effect upon its passage.