- The Consumer Financial Protection Bureau said Tuesday it will stop enforcing a Biden-era rule treating buy now, pay later firms like credit card lenders.
- The agency cited a need to focus resources on "pressing threats to consumers," especially service members, veterans, and small businesses.
- The fintech industry had sued to block the rule last year, arguing the agency bypassed proper rulemaking.
For the third time under President Donald Trump, the Consumer Financial Protection Bureau has pulled back from enforcing a key rule, this time targeting buy now, pay later services.
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WATCH HEREThe CFPB said in a notice on Tuesday that it will not prioritize enforcement of a rule, established during Joe Biden's presidency, that classified BNPL providers as credit card issuers subject to the Truth in Lending Act. Fintech lenders had been required to comply with more stringent consumer protections, including standardized disclosures, refund processing and formal dispute investigations.
Affirm and other BNPL firms had voiced opposition to the billing statement requirement, arguing that it would confuse users and add unnecessary friction.
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SIGN UP "Requiring BNPL providers to comply with rules designed for open-end credit cards creates compliance challenges and confusing outcomes for consumers," Affirm wrote in a formal comment letter, urging the CFPB to adopt rules that reflect how consumers actually use BNPL products.
The CFPB is looking to go even further as it's considering rescinding the rule entirely, citing a need to focus resources on "pressing threats to consumers," especially service members, veterans, and small businesses.
Money Report
In October, the Financial Technology Association, which represents major BNPL players, sued the CFPB, claiming the agency overstepped by imposing credit card-like restrictions through an interpretive rule rather than a formal one.
The CFPB notice comes as new consumer data shows mounting pressures in the market.
A Bankrate survey released Monday found that nearly half of BNPL users have faced financial problems tied to these services. As usage rises, particularly for essentials like groceries, missed payments are increasing as well.
Affirm is scheduled to report quarterly results on Thursday. Rival Klarna is on file to go public, but delayed its IPO last month after President Trump's announcement of sweeping new tariffs roiled financial markets.
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