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The CFPB has announced plans to withdraw its May 2024 interpretive rule that subjected buy-now, pay-later (BNPL) products to regulations applicable to credit cards under the Truth in Lending Act (TILA). The move was revealed in court filing in the CFPB’s ongoing litigation with a fintech-focused trade organization which challenged the rule as procedurally improper and ill-suited to short-term, interest-free BNPL loans.Continue Reading CFPB to Withdraw BNPL Interpretive Rule Amid Broader Agency Rollback

During the week of January 6, the CFPB released a “second” Winter 2024 Supervisory Highlights, focused on the agency’s most recent findings in deposits, small dollar lending, buy now, pay later (BNPL), paycheck advance products, and furnishing. Some key takeaways include:Continue Reading CFPB Publishes Supervisory Highlights Focused on Deposits, Small-Dollar Lending, BNPL, and Paycheck Advance Products

On October 18, a fintech trade group filed a complaint in a D.C. federal court challenging the CFPB’s interpretive rule on Buy Now, Pay Later (BNPL) products. The rule, released last May, treats BNPL providers as credit card providers under TILA (previously discussed here). The complaint alleges various violations of the Administrative Procedure Act (APA), among others, claiming that the CFPB violated the APA’s notice and comment requirements, exceeded its statutory authority when issuing the rule, and acted in an arbitrary and capricious manner in imposing requirements on BNPL providers.Continue Reading Trade Group Challenges CFPB’s Buy Now Pay Later Rule

On May 22, the CFPB announced an interpretive rule confirming that Buy Now, Pay Later (BNPL) lenders qualify as credit card providers under the Truth in Lending Act, Regulation Z and are required to provide consumers legal protections and rights that apply to credit cards, including the ability to dispute charges, secure refunds for returned products and receive billing statements.Continue Reading CFPB Interpretive Rule Holds That BNPL Lenders Are Credit Card Providers

On June 15, the CFPB posted a blog, titled “Buy Now, Pay Later and Credit Reporting” discussing the Bureau’s viewpoint on the importance of standardized data furnishing by buy now, pay later (BNPL) firms to consumer reporting companies for inclusion in consumer credit reports. BNPL products provide consumers with a short-term, no-interest credit option and are widely used for online purchases and, increasingly, brick-and-mortar stores. The CFPB has recently expressed concerns about the fast-growing BNPL credit industry, noting the potential for consumers to accumulate debt by making multiple BNPL purchases across several different BNPL firms. (See our previous posts about the CFPB’s December 2021 BNPL market monitoring inquiry here and here).
Continue Reading CFPB Blogs About Need for Standardized Credit Reporting

On January 24, the CFPB issued a notice and request for comment in the Federal Register regarding the Bureau’s inquiry into “buy now, pay later” or BNPL providers.  As discussed in a Consumer Finance and Fintech post last month, the CFPB issued a series of “market monitoring” orders to five companies offering BNPL credit in order to collect information on the risks and benefits of these fast-growing loans.  According to the notice, the information obtained through this latest request will “help the Bureau better understand how consumers interact with BNPL providers, and how BNPL business models impact the broader e-commerce and consumer credit marketplaces.”
Continue Reading CFPB Requests Comments on “buy now, pay later”

On December 16, the CFPB issued a series of orders to five companies offering “buy now, pay later” (BNPL) credit.  The orders seek to collect information on the risks and benefits of these “fast-growing” products over concerns about “accumulating debt, regulatory arbitrage, and data harvesting in a consumer credit market already quickly changing with technology.”  BNPL is a deferred payment option that allows consumers to split a purchase into smaller installments, typically four or less, often with a down payment of 25 percent due at checkout.  To underscore BNPL’s current popularity, a report issued by the California Department of Financial Protection and Innovation recently reported that “[t]he top six buy now pay later lenders accounted for 10,924,547, or 91 percent, of the total consumer loans originated in 2020” (we discussed this report in an earlier Consumer Finance & FinTech Blog post here).
Continue Reading CFPB Issues Orders to Companies Offering BNPL Credit

On November 16, the California DFPI released Version 2.0 of its Annual Report of Finance Lenders, Brokers and PACE Administrators Licensed under the California Financing Law (CFL).  The Annual Report examined unaudited data gathered from finance lenders, brokers, and Property Assessed Clean Energy (PACE) administrators licensed under the CFL, as well as new data from the “buy now, pay later” or BNPL industry.
Continue Reading DFPI Reports Increase in Consumer Loans Under $2,500, Decrease in Consumer Loans Between $2,500 and $10,000