Other State Regulators

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On February 23, the New York Department of Financial Services (DFS) issued a proposed new Part 423 to Title 3 of the NYCRR to implement New York Banking Law Article 14‑B for Buy-Now-Pay-Later (BNPL) lenders. The proposal would move BNPL firmly into New York’s credit system, imposing licensing, supervision, disclosure, data privacy, and underwriting requirements on both interest‑free and interest‑bearing BNPL products offered to New York consumers. If adopted, the rule would take effect 180 days after the notice of adoption is published in the State Register, with a short transitional period for existing BNPL providers. DFS is accepting pre-proposal comments through March 5, 2026, after which the proposed rule will be published in the New York state register for a formal 60-day comment period.

In this special crossover episode of Regulatory Oversight and FCRA Focus, Kim Phan is joined by Michael Yaghi, partner in Troutman Pepper Locke’s Regulatory Investigations, Strategy + Enforcement practice group, to unpack the California Department of Financial Protection and Innovation’s (DFPI) latest effort to require registration for the credit reporting industry. They discuss DFPI’s second request for comment, how it fits into California’s broader push to regulate nonbank financial services, and which entities may be swept in beyond the “big three” consumer reporting agencies — such as furnishers, data brokers, specialty credit reporting agencies, resellers, and fintechs. Kim and Michael also explore how narrowly (or broadly) the rules might be drawn, potential overlap and tension with existing FCRA requirements, what registration and reporting could mean in practice for covered entities, and what companies should be doing now as the February 26 comment deadline approaches.

Many prediction market firms have sought to avoid state regulation by emphasizing how their services differ from traditional sports betting. They characterize their offerings as “event contracts” or “swaps,” which are only subject to Commodity Futures Trading Commission (CFTC) oversight and note that they operate peer‑to‑peer exchanges, earning revenue from transaction fees rather than customer losses. Many state regulators have disagreed with this argument, however, asserting that event contracts cannot be distinguished from state-regulated gaming. Federal courts in various states have reached different conclusions on this issue. A Nevada federal court has now weighed in, ruling that some of these services fall under state gaming law.

On October 10, 2025, Illinois Attorney General (AG) Kwame Raoul filed a lawsuit on behalf of Ann Gillespie, director of the Illinois Department of Insurance (the Department), against four different entities, all within the State Farm corporate umbrella. This lawsuit arises from State Farm’s alleged refusal to comply with financial examination warrants issued by Director Gillespie, which aim to force State Farm to disclose information about the policies it writes and the premiums it charges. As insurance regulation is a creature of state law, the Department’s director oversees the enforcement and execution of all insurance laws in Illinois. Further, AG Raoul has authority to bring lawsuits on behalf of other Illinois state agencies.

What Happened

In a press release published August 25, New York Senators James Skoufis, Jamaal Bailey, and Brian Kavanagh announced a joint investigation into residential property insurance. The purpose of the investigation is “to identify the causes of reported increases in premiums and other obstacles to insuring new and existing single- and multi-family homes, including those occupied by homeowners and renters, and to identify legislation and policy changes that New York State should implement.”

On June 25, the California Department of Financial Protection and Innovation (DFPI) entered a consent order with Coinme, Inc., a cryptocurrency “ATM” operator, for noncompliance with the California’s Consumer Financial Protection Law (CCFPL) and Digital Financial Assets Law (DFAL). The consent order marks a significant milestone in California’s regulatory efforts because it represents the conclusion of the agency’s first enforcement action under the DFAL.

On March 11, New Jersey Attorney General (AG) Matthew Platkin and the New Jersey Division on Civil Rights (DCR) announced that DCR issued a finding of probable cause against Advance Funding Partners/Same Day Funding (Advance Funding), a company that provides cash advances and consumer loans, alleging that it violated the New Jersey Law Against Discrimination by discriminating against both consumers and employees.

The Virginia General Assembly has once again advanced legislation to establish a regulated market for recreational marijuana sales. Virginia is unique in that it allows personal possession of cannabis but bans retail sales outside of medical marijuana dispensaries. The legislation, HB 2485 sponsored by Delegate Paul Krizek, D-Fairfax County, and SB970 by Senator Aaron Rouse, D-Virginia Beach, passed the Democratic-controlled legislature on a party-line vote (53-46 in the House and 21-19 in the Senate). The bills now move on to Virginia’s Governor Glenn Youngkin.

Last year, we wrote about the former Missouri governor’s efforts to curb the availability of intoxicating hemp products to Missouri consumers by executive order. There are now several proposed bills in the Missouri legislature that seek to regulate hemp-derived consumable products in the state, a few of which we summarize below. In general, the proposed legislation addresses issues related to youth access, licensing, taxation, advertising and marketing, testing, and labeling. This type of proposed legislation is worth monitoring in Missouri, and other states, as states take more aggressive action to prohibit or regulate the availability of such products to consumers in the absence of a coherent, federal regulatory framework.