CFPB Issued a Request for Public Comment on “Buy Now, Pay Later”

On December 16, 2021, the Consumer Financial Protection Bureau (“CFPB”) launched an inquiry into “buy now, pay later” (“BNPL”) products and business practices related to BNPL. Pursuant to the inquiry, the CFPB ordered five companies offering BNPL credit to turn over “information on the risks and benefits of these fast-growing loans.”

The CFPB made its order out of concerns regarding “accumulating debt, regulatory arbitrage, and data harvesting in a consumer credit market already quickly changing with technology.” 

On January 12, 2022, the CFPB issued a request for public comment on its inquiry into BNPL and general opinion of BNPL providers.  In particular, the agency is seeking the following responses:

• What is the buyer experience with BNPL?

• What are the benefits and risks?

• What is the merchant experience?

• What perspectives do regulators and attorneys general have with respect to BNPL products?

• Are there ways in which the BNPL market can be improved?

The request for feedback is intended to help the CFPB better understand the public’s interactions with BNPL financing practices and providers and the impact of the industry on “the broader e-commerce and consumer credit marketplaces.”

BNPL providers or practitioners should be aware of this continued legislative efforts by the CFPB.