On January 24, the CFPB Published a notice and request for comment in the Federal Register regarding the Bureau’s investigation of “buy now, pay later” or BNPL vendors. As discussed in Consumer Finance and Fintech Publish last month, the CFPB Published a series of “market surveillance” orders to five companies offering BNPL loans to gather information on the risks and rewards 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’s suppliers and how BNPL’s business models impact the broader e-commerce and credit markets.” to consumption”.
Put into practice : The Bureau’s latest investigation appears to signal another step, or at least an intention, to regulate BNPL directly through rulemaking or enforcement. As with market surveillance activities, the CFPB may use the information gathered from this application for any purpose, such as developing UDAAP enforcement roadmaps. The CFPB also has the authority to oversee non-bank “large participants” they identify in other consumer financial markets, as they have done in the past for consumer reporting, consumer debt collection , student loan servicing, international money transfers and car financing. Therefore, defining a larger group of BNPL participants for oversight may also be a consequence of the Bureau’s current discovery efforts. As the rapid growth of BNPL attracts the attention of the CFPB and the regulatory climate continues to evolve, BNPL providers must continue to develop compliance policies and procedures to structure and implement a legally compliant BNPL program. consumer protection and regulatory standards.