PerformLine’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

Buy Now Pay Later (BNPL) evolved from being a modern alternative form of payment into a large and growing industry. According to a recent article from Payments Dive, the Consumer Financial Protection Bureau reviewed many “billing disputes, refund rights, disclosures, and billing statements.” Then they revisited the Truth in Lending Act and considered “how existing laws and regulations apply to the new business model of BNPL lending”. Now BNPL companies may have to make significant changes to ensure they’re compliant with the laws and regulations that reinforce important consumer protections.

This is a major expansion, in my opinion. I think this may be the first time the CFPB takes formal action to extend some obligations that typically only apply to “traditional” credit card lenders to the BNPL industry. I am curious to see how this develops. https://lnkd.in/e6xQFeEY

In 2024, the convenience of buy now, pay later (BNPL) seduces many—but according to a recent survey by Achieve, 78% acknowledge BNPL makes it easy to get over-extended financially. With BNPL evolving as a go-to for many burdened by financial strains, these insights reveal fickle distinctions between consumer behaviors and highlight the thin line between aid and adversity. Uncover Achieve's survey on Buy Now Pay Later (BNPL) loans, analyzing pivotal trends and expert recommendations that could redefine responsible BNPL usage. Read it now: https://bit.ly/3PMQQGL #welcometoachieve #buynowpaylater #debt #debtstress  #financenews #fintechnews #consumerdebt #consumerdata #bnpl #consumerfinances #personalfinance

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

Very interesting - Reg Z now applied to BNPL products... very card-like action by the Consumer Financial Protection Bureau. I used to work in credit card disputes and know how challenging it can be to abide by all the requirements, given the unique nature of each dispute; it's certainly not a cookie cutter straightforward process sometimes - my advice to anyone confused by #TruthInLending - seek expert help before you even inadvertently violate the regulation. #RegZ #BNPL #CFPB #dispute

The CFPB has hit the ground running after their SCOTUS victory. The CFPB has issued an interpretive rule that confirms that Buy Now, Pay Later (BNPL) lenders are credit card providers because the digital user accounts they issue constitute ‘credit cards’ under Regulation Z. As such, lenders must provide consumers some key legal protections and rights that apply to conventional credit cards in regards to disputes, refunds, and billing statements. Typically, BNPL products do not involve a finance charge and are repayable in four or fewer installments, therefore many provisions of Regulation Z do not apply. The interpretative rule makes clear this is no longer the CFPB's opinion. You can read the interpretative rule in the linked post. #CFPB #compliance #creditunions #cusos #BNPL

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

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.

Commenting from an experienced lender's perspective, I believe that collateral in point-of-sale purchases plays a significant role in repayment behavior and delinquency rates. Many of the products that Affirm and similar companies finance are high-end goods, which increases a consumer’s desire to retain the product. This attachment to valuable collateral can positively impact repayment rates. Borrowers are more likely to stay current on their payments to avoid losing the product, demonstrating that the perceived value of the collateral is a critical factor in reducing default risk. #LendingInsights #CollateralMatters #BNPL #RepaymentTrends #AffirmFinance #HighEndPurchases #LoanPerformance #FinancialRisk #ConsumerBehavior #DelinquencyRates #PointOfSaleFinancing