Buy Now Pay Later

Subscribe to Buy Now Pay Later via RSS

“Buy Now, Pay Later” (BNPL) products emerged relatively recently as a new approach enabling consumers to enjoy the ability to make a purchase and then pay for it over time. Today’s episode, during which we explore the evolution of BNPL products and important recent developments in BNPL regulation, is hosted by Alan Kaplinsky, former practice leader and current Senior Counsel in Ballard Spahr’s Consumer Financial Services Group, and features Ballard Spahr Partners Michael Guerrero and Joseph Schuster.… Continue Reading

On August 13th, 2024, from 1:30 p.m. to 3:00 p.m. ET, we will hold a webinar covering the CFPB’s BNPL interpretive rule and its proposed earned wage access (“EWA”) interpretive rule.  For more information and to register, click here.

On July 18, 2024, the Consumer Financial Protection Bureau (the “CFPB” or “Bureau”) proposed an interpretive rule that states (1) EWA products fall under the definition of “credit” under the Truth in Lending Act (“TILA”) and Regulation Z and (2) fees for certain tips and for expedited funding are finance charges.… Continue Reading

The result of the CFPB’s multi-year study of the BNPL industry is what the CFPB calls an interpretive rule in which it finds that: (1) “digital user accounts” (each a “DUA”) that may be used to access credit are “credit cards” under Regulation Z; (2) the lenders that issue such accounts are “card issuers;” and (3) that as it relates to traditional BNPL loans (loans that are payable in four or fewer installments with no finance charge) these card issuers are “creditors” subject to subpart B of Regulation Z—the provisions typically applicable to open-end credit.… Continue Reading

Following their announcement last July regarding their plans to coordinate on a range of consumer financial protection issues , the CFPB Director and his European counterpart, the Commissioner for Justice and Consumer Protection of the European Commission, have released a joint statement highlighting some areas those coordinated efforts have identified for ongoing monitoring and particular focus.… Continue Reading

Consumer Financial Protection Bureau (“CFPB”) Director Rohit Chopra shared his insights at Consumer Bankers Association Live industry conference in Washington D.C. Reuters reported that Chopra told sideline reporters, “We are going to be looking into the credit card rewards market due to an increase in consumer complaints. What the marketing gurus and consultants are telling credit card issuers is that they should focus consumers’ attention on splashy rewards, but then withhold information from them when they’re paying lots of interest and could switch to a lower-rate card, even within the same bank.”… Continue Reading

Michael Guerrero, a partner in Ballard Spahr’s Consumer Financial Services Group and co-leader of the firm’s Fintech and Payment Solutions Team, has authored an article on buy now pay later (BNPL) that will be published in the March—April 2024 issue of ABA Risk and Compliance. 

Titled “Buy Now Pay Later…in an Era of Increased Scrutiny of Economic Headwinds,” the article discusses the evolution of BNPL, regulatory and compliance considerations, and what is ahead for BNPL.… Continue Reading

Democratic Senator Sherrod Brown, who chairs the Senate Banking Committee, and Democratic committee members Raphael Warnock and John Fetterman, have sent a letter to Director Chopra urging the CFPB to “continue focusing on” buy-now-pay-later (BNPL) products to ensure they do not “become a method to take advantage of struggling consumers.”

The Senators observed that “[w]hile BNPL might provide some consumers with helpful flexibility, it also presents new risks that the CFPB should continue to monitor and guard against.” … Continue Reading

The Office of the Comptroller of the Currency (OCC) has issued a bulletin (2023-37) that provides guidance on managing risks associated with “buy now, pay later” (BNPL) lending.  The BNPL loans addressed in the bulletin are loans that are payable in four or fewer installments and carry no finance charges.

The bulletin cautions banks about the risks to banks and consumers associated with BNPL lending. … Continue Reading

The CFPB has issued a new report ,“Consumer Use of Buy Now, Pay Later: Insights from the CFPB Making Ends Meet Survey,” that looks at the financial profiles of consumers who use buy-now-pay-later (BNPL) products. 

The report uses data from the CFPB’s 2022 Making Ends Meet survey (responses of 2,036 consumers) and the CFPB’s Consumer Credit Panel.  … Continue Reading

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