The corporate regulator wants to seriously clamp down on the buy now, pay later industry, bringing strict new lending laws to the largely unchecked sector.

In a submission to Treasury, the Australian Securities and Investments Commission has said lenders like Zip and Afterpay should be held to the same regulations as the banks and credit unions.

“Products with similar characteristics and the same purpose and function should be treated the same way in the regulatory framework,” the ASIC submission reads.

“Uniform regulation under the National Credit Act would bring a more consistent regulatory framework across all buy now, pay later providers and a standardised regime that could be enforced by ASIC.”

This would force the already struggling sector to conduct credit checks before signing customers up, a process that would slow applications by days.

Seven million Australians currently use BNPL services.

ANZ, who has also made a submission, agrees with ASIC’s stance.

“This option provides for consistent regulation of BNPL products and other products that could be considered to present similar functionality and risk,” the bank wrote.

“Consistent regulation would allow for competitive neutrality between BNPL and other products, and will help ensure predictable and consistent customer protections.”