We begin with a discussion of the goals and themes of FTA’s recent summit and AFC’s advocacy regarding retention of the strategic plan option under the Community Reinvestment Act. We then discuss consumer benefits of buy-now-pay-later (BNPL) and regulatory concerns raised by the CFPB in its BNPL report, state level regulatory issues facing fintechs, the Treasury’s report on bank/fintech relationships and takeaways for fintechs, consumer benefits of earned wage access products and artificial intelligence and regulatory concerns raised by the CFPB, and reactions to the CFPB’s Section 1033 rulemaking.… Continue Reading
Buy Now Pay Later
This week’s podcast episode: The Consumer Financial Protection Bureau’s report on buy-now-pay-later (BNPL): What are the takeaways and the CFPB’s expected next steps?
The CFPB’s growing interest in and scrutiny of BNPL comes at a time when the BNPL industry is experiencing rapid growth. That makes it imperative for both companies currently offering BNPL products and companies considering whether to enter into the BNPL market to be aware of the practices that are likely to receive increased CFPB scrutiny and how future CFPB initiatives involving BNPL could impact the industry. … Continue Reading
FTC calls attention to buy-now-pay-later compliance issues
In a new blog post, “Buy now, pay later – and comply with the FTC Act immediately,” the FTC reminds nonbank participants in the buy-now-pay-later (BNPL) market, such as retailers, BNPL providers, marketers, and debt collectors, that they can be liable for violations of Section 5 of the FTC Act based on the information they communicate to consumers and how they communicate such information.… Continue Reading
More on CFPB next steps in wake of buy-now-pay-later report; Ballard Spahr to hold webinar on report on October 3, 2022
Last week, the CFPB issued its long-awaited report on buy-now-pay-later (BNPL) products. While the report identifies consumer risk and harms arising from BNPL products, it does not discuss any actions that the CFPB plans to take based on the report. Those follow-up actions were left for Director Chopra to preview in his prepared remarks on the report and for the CFPB to announce in its press release on the report. … Continue Reading
CFPB issues report on buy-now-pay-later
The CFPB has issued its long-awaited report on buy-now-pay-later (BNPL) products. Titled “Buy Now, Pay Later: Market trends and consumer impacts,” the report is based on the information the CFPB received from the five providers of BNPL products to whom it issued market monitoring orders in December 2021 and comments received by the CFPB in response to its January 2022 request for public comments to inform its inquiry into BNPL. … Continue Reading
Poll on buy-now-pay-later shows positive view among BNPL users
The results of a recent poll on buy-now-pay-later (BNPL) conducted on behalf of the Financial Technology Association (FTA) indicate that BNPL products are viewed favorably by a strong majority of adults who have used BNPL. The poll was conducted through online interviews of a sample of 2210 adults and the data were weighted to approximate a target sample of adults based on gender, age, race, educational attainment, and region. … Continue Reading
This week’s podcast episode: A deep dive into buy-now-pay-later with special guests Nikita Aggarwal, Postdoctoral Fellow, UCLA School of Law, and Chris Odinet, Professor of Law, University of Iowa, College of Law
Joined by two experts on the BNPL industry, we first review the types of BNPL products currently available, how they are accessed by consumers, how they generate revenue for industry participants, and potential consumer risks. We then discuss the federal and state laws applicable to BNPL, expectations for CFPB rulemaking or other action, how the U.S.… Continue Reading
CFPB issues report on emerging risks in BNPL, super app and embedded commerce payments
In Director Chopra’s recent interviews with several news reporting organizations, a persistent theme was the CFPB’s concerns about the entry of big tech companies into financial services, particularly in connection with payments and the companies’ ability to collect and monetize data about consumers. Those concerns are the focus of a new CFPB report issued last week titled “The Convergence of Payments and Commerce: Implications for Consumers.”… Continue Reading
This week’s podcast episode: Innovative products: Understanding the regulatory and enforcement risks
We discuss key regulatory issues for innovative products such as buy-now-pay later, longer term installment loans, delay pay, and card-based products (such as “virtual cards”). We look at the different ways these products can be structured and the impact of these differences on applicable legal requirements, such as disclosures and licensing. … Continue Reading
CFPB outlines BNPL expectations
The CFPB’s new blog post titled “Buy Now, Pay Later and Credit Reporting” appears intended to send a message about the CFPB’s expectations to industry.
For companies offering buy-now-pay-later (BNPL) products, the CFPB’s message is that “when BNPL payments are furnished [to CRAs] it is important that lenders furnish both positive and negative data.”… Continue Reading