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Ohio bill would exempt buy-now-pay-later fintech from small-loan licensing, sponsor says
Summary
Sen. Lang told the committee SB269 would extend the Small Loan Act exemption that currently applies to banks to fintech companies that arrange buy-now-pay-later bank loans, aligning statute with Department of Commerce guidance and CFPB data cited in testimony.
Senator Lang presented sponsor testimony on Senate Bill 269, explaining the bill would exempt financial-technology companies that arrange "buy now, pay later" (BNPL) loans through banks from Ohio’s Small Loan Act (SLA). He told the committee that the SLA requires nonbank entities to obtain a license when arranging bank loans of $5,000 or less and that loans under the statute cannot be less than $1,000 or shorter than one year. Lang said BNPL arrangements—typically interest-free, short installment plans—were not the SLA’s original target and that his bill would make the Department of Commerce’s non-enforcement guidance permanent.
Lang cited a Consumer Financial Protection Bureau report showing the average BNPL purchase nationally at about $142 and a median near $108; he said the bill would align state law with practical commerce and preserve bank exemptions for these arrangements while signaling future technical fixes in consultation with the Department of Commerce.
The measure received sponsor testimony and a description of the Department of Commerce discussions; the committee did not take a vote on SB269 during the hearing.
