Buy Now Pay Later

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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

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

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

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

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.  We also look at secondary market considerations, legal issues arising from the offering of products through non-bank/bank partnerships including enforcement trends, and recent CFPB developments impacting innovative products.… Continue Reading

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

Rising interest rates and inflation are two key factors that are expected to create a more challenging business environment in 2022.  Based on his work at the intersection of technology and financial services, Todd shares his perspective on how this new environment is likely to impact providers of various types of consumer financial services, particularly non-bank fintech companies.  We… Continue Reading

Having sent orders last month to five companies that offer buy-now-pay-later (BNPL) products directing them to provide information to the Bureau, the CFPB published a notice in today’s Federal Register seeking public comment to inform its inquiry into BPNL products.  Comments must be filed by March 25, 2022.

In a blog post about the request for comments, the CFPB indicated that “some analysts have suggested that BNPL has rerouted big holiday shopping money away from the credit card companies towards these companies, putting an enormous amount of consumer debt on their books.” … Continue Reading

American Banker has reported that beginning in the next few weeks, Equifax will add a business industry code for buy-now-pay-later (BNPL) transactions to allow such transactions to appear on credit reports.  It also reported that TransUnion is working on its own BNPL credit reporting service.

The growth in consumer use of BNPL is leading to more scrutiny of the product. … Continue Reading

At the end of last week, the CFPB sent orders to five companies that offer buy-now-pay-later (BNPL) products directing them to provide information to the Bureau.  The orders were issued as market monitoring orders under the Dodd-Frank Act, which directs the Bureau to monitor for risks to consumers in the offering or provision of consumer financial products or services and authorizes the Bureau to require covered persons and service providers to provide information needed to perform such monitoring.… Continue Reading