The Treasury has unveiled draft legislation mandating Buy Now Pay Later (BNPL) providers to acquire an Australian Credit Licence as part of new regulations. These regulations are designed to integrate BNPL services into the same legal framework that governs traditional credit products, thereby closing existing regulatory loopholes. Under the proposed laws, BNPL products will be classified as low-cost credit contracts (LCCCs), subjecting providers to modified responsible lending obligations and anti-avoidance measures. BNPL providers must now assess product suitability for consumers and ensure compliance with the new framework. The consultation period for the draft legislation is open until 9 April 2024, signaling a transformation in the oversight of BNPL financial products.
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