Buy Now Pay Later

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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

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

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

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

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