Harold Bennett’s Post

Breaking News: The CFPB has issued an interpretive rule that confirms Buy Now, Pay Later (BNPL) lenders as credit card providers. This move means that BNPL lenders must now provide consumers with some key legal protections and rights that apply to conventional credit cards. These include a right to dispute charges and demand a refund from the lender after returning a product purchased with a BNPL loan. Read more about this development on the CFPB's website. #CFPB #BNPL #creditcards #consumerprotection

A new report reveals that while most consumers are satisfied with Buy Now, Pay Later (BNPL) services, many expect these loans to positively affect their credit scores—despite the fact that most BNPL providers do not report to major credit bureaus. This disconnect highlights the need for greater transparency in the BNPL sector, as consumers may be unaware of the true impact on their credit profiles. The evolving BNPL landscape presents both challenges and opportunities for lenders and consumers alike. https://lnkd.in/e2jBebdU

In case you missed it, the CFPB released its anticipated BNPL as a credit card FAQs. If you want to jump straight to which Reg Z rules the CFPB thinks are required, skip to FAQ 4 of the "Coverage" section. Of course, actual implementation of these requirements is another story...

“For BNPL customers, it is a great opportunity to demonstrate to other lenders positive credit behaviours,” – Elsa Markula, CEO of Arca. Last week, the Federal Government announced major changes to the Buy Now Pay Later (BNPL) sector, establishing BNPL as a form of credit and requiring providers to comply with existing credit regulations. The proposed legislation will regulate several key components of BNPL products, including putting a cap on the fees charged by providers, tightening the reins on the credit application process, and factoring BNPL services into credit ratings. We were thrilled to see our client, Arca, featured in News Corp Australia's news.com.au discussing what these new regulations mean for consumers. As an industry association dedicated to making credit more visible, accessible, and easily understood, Arca believes that these changes are a step in the right direction, allowing consumers to safely enjoy the flexibility of BNPL services while using this form of credit to demonstrate good financial habits to other lenders. Click the link below to read the full article. https://lnkd.in/gydjz8ek #PublicRelations #PRTips #BNPL

Excited to be mentioned within the NYT article today that highlights some of the challenges in BNPL consumer reporting that we are helping to solve. We are the first real time BNPL consumer credit database. With better data, BNPL lenders can make more informed underwriting decisions. With better decisions come better outcomes for consumers. Let's go!

BNPLs : HEADING INTO CREDIT BUREAU SCORES Current credit scoring models “are not designed with BNPL in mind.” The lack of BNPL information being reported to credit bureaus has allowed consumers who might be turned away by credit card companies to sign on for multiple BNPL loans - resulting in some material portion of BNPL users getting themselves into financial distress. “Integrating loan information with credit bureaus can be helpful for younger consumers experimenting with smaller BNPL plans to build credit, but could be problematic for repeat users who may struggle to juggle multiple plans at once.” #BNPL #CreditScore #CreditBureau #ResponsibleAI

The three national credit bureaus have taken steps and are prepared to have ‘Buy Now, Pay Later’ information included in a consumer’s credit history, which is appropriate for lending products that represent a clear extension of credit to consumers. This is good data that can make credit histories more accurate, while also helping consumers build their credit file. With the current opacity around how consumers manage BNPL products, there is a blind spot for lenders, and this could put more consumers at risk.   Read More #BuyNowPayLater https://lnkd.in/edxbAGF6

🚀 Exciting Update for Finance Professionals and Consumers! 🚀 Buy Now, Pay Later (BNPL) services are evolving, and an important shift is taking place: BNPL loans are now being reported to credit bureaus. This development signifies a major step towards integrating BNPL services more deeply into the traditional financial framework, impacting both consumer credit scores and market dynamics. What does this mean for businesses and consumers? For companies, it's an opportunity to reassess credit risk management strategies. For consumers, the way you use BNPL services could influence your credit history, just like traditional loans. Professionals in finance and credit industries, what are your thoughts on this integration? How do you see it affecting strategies and consumer behavior moving forward? https://lnkd.in/g3fpgXn7 #Finance #CreditScore #BNPL #BusinessStrategy #ConsumerCredit

The rise of Buy Now Pay Later (BNPL) options for consumers has been significant. However, there is a catch - these loans do not appear on consumer credit reports, leading to a lack of reporting and visibility. This has left credit bureaus scrambling to figure out a solution. I want to hear from you. What do you think should be done to reconcile this issue? Would incorporating this reporting hurt the consumer? Share your thoughts in the comments. #BNPL #creditbureaus #consumercredit #finance #FirstSource https://lnkd.in/eFERmYmV

We’ll share more detailed thoughts later, but the #CFPB is again attempting to expand the scope of existing laws without having the authority to do so. This time with respect to BNPL.