ASIC has proposed harsh new rules for the buy now, pay later sector. 

The Australian Securities and Investments Commission (ASIC) has made a submission to the Treasury to support a stricter regulatory framework for the buy now, pay later (BNPL) sector, including rules that will require BNPL players to ask for customer income and expenses data before granting credit. 

ASIC says the BNPL sector should be held to the same lending standards as credit card providers and banks. 

The proposal comes in the wake of Openpay entering administration, which is the first ASX-listed BNPL group to collapse, and after other firms in the sector have experienced significant drops in value. 

The sector is not currently bound by obligations such as credit checks for potential borrowers. 

The Australian Retailers Association and Afterpay favour a lighter-touch option, which would only strengthen a code of conduct administered by the Australian Finance Industry Association. 

The ANZ and Westpac banks, the Customer Owned Banking Association, the Australian Retail Credit Association, the Mortgage and Finance Association of Australia, and National Legal Aid all support ASIC's position calling for the most onerous regulatory option.