Scott Pearson’s Post

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...

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

On The Radar: The CFPB issued an interpretive rule confirming that Buy Now, Pay Later (BNPL) lenders are credit card providers. BNPL lenders must now provide consumers with key legal protections, including the right to dispute charges and demand a refund. This ruling is part of the CFPB's initiative to bring consistency to the rapidly expanding Buy Now, Pay Later market. https://bit.ly/4c2th5s

As BNPL grows, the regulatory activity ramps up to ensure consumer protection alongside it. 🇺🇸 Today the CFPB announced a new interpretative rule for the Truth in Lending Act, bringing BNPL lenders within the scope of the same laws that currently apply to credit card providers. Key consumer protections that BNPL lenders must implement include: - Investigation of disputes - Refunding returned products or cancelled services - Providing billing statements 🗽 Yesterday, the NY State Senate tabled a Bill which seeks to impose new licensing and disclosure requirements on BNPLs. These new requirements will include the obligation to comply with (as yet unpublished) reporting regulations, which will set out how BNPLs are to report BNPL consumer data. 🇪🇺 This comes a month after the CFPB released an update on its ongoing dialogue with the European Commission regarding consumer financial protections, with BNPL a key focus. The CFPB has made clear its intention to continue to carefully monitor these markets and take action to ensure that consumers are treated fairly. 🌎 We aim to smooth the path for our BNPL partners by providing real-time, accurate and secure reporting. Transparency over consumers’ BNPL usage (without compromising personal information) will be key to helping BNPLs comply with their growing regulatory burden, as well as improving consumer financial health in general. #BNPL #Fintech #ConsumerProtection #CFPB

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

Just in: The Consumer Financial Protection Bureau (CFPB) issued an interpretive rule that confirms that Buy Now, Pay Later (BNPL) lenders will typically be deemed credit card providers. Accordingly, BNPL lenders would be required to provide consumers some key legal protections and rights that apply to conventional credit cards, such as dispute and refund rights, billing statements, and disclosures that lay out fees and pricing structures. This is not a big surprise as the CFPB has long hinted that BNPL products should receive many of the same consumer protections applicable to credit cards. The interpretive rule is effective 60 days after publication in the Federal Register. Comments will be accepted until August 1, 2024. https://lnkd.in/e7_ZVfeA #cfpb #bnpl #regulations #regulatorycompliance #fintech #fintechs #financialservices #financialinstitutions #consumerfinance

Here are my quick thoughts on Michael Guerrero ‘s excellent and thorough blog. While the CFPB might feel comfortable in labeling this document as an interpretive rule, I view it as a legislative rule which is subject to all the detailed requirements of the Administrative Procedure Act, including notice and comment, etc. Last September, a Federal District Court held that an amendment to a CFPB Exam Manual is a legislative rule. See our blog about that opinion below. The most outrageous part of this rule is that the CFPB is only giving the industry 60 days from publication in the Federal Register to comply with very detailed requirements that apply to credit cards. I wonder how this compares to the time the Federal Reserve Board gave credit card issuers to comply with the same regulations. I’d guess a lot longer than 60 days. This rule is certainly vulnerable to a legal challenge . https://lnkd.in/ek9mebDb

The Consumer Financial Protection Bureau’s new interpretative rule regarding BNPL reveals new requirements for BNPL providers under Regulation Z. With less than 60 days left before the rule takes effect, BNPL providers need to quickly rework their card programs and align their servicing processes to comply with Regulation Z. Our blog post explains what BNPL providers can expect with the change and the solutions LoanPro offers to seamlessly implement these new compliance measures into their credit products. Read here: https://lnkd.in/gm5yHiRz

The expansion of BNPL compliance continues! The CFPB just released its interpretative ruling that is intended to apply Reg Z credit card billing protections to BNPLs. The ruling turns on the interaction of Reg Z's definitions of card issuer, creditor and credit card, as applied to closed-end loans, which has its roots in the Fair Credit Billing Act of 1974. My question is, what precedent will this set for other app/digital accounts that, directly or indirectly, afford consumers access to other forms of credit (whether open-end or closed-end)?

Reading past the doomsday headline, what the article says is: -Maryland announced you can offer BNPL under your existing lending policies and practices. -40+ credit unions across the country and already bringing this service to their members. -Members are adopting these payment preferences and repaying CFIs at high rates. -Regulators continue addressing non-traditional FIs offering a service. Interested in chatting about how equipifi is making BNPL helpful for your members - let's connect? https://lnkd.in/gF5J-wvu