CFPB Unlikely to Take Immediate Action on Buy-Now, Pay-Later Sector

The Consumer Financial Protection Bureau balanced its view on buy now, pay later in its latest study by specifying areas of concern and recognizing the sector's potential to grow.

It is unclear if the consumer protection watchdog will immediately take enforcement actions against any buy-now, pay-later, or BNPL, platforms based on the findings, industry experts said. The report was released Sept. 15, following an inquiry initiated in December 2021, and raised concerns about loan stacking, insufficient disclosure and data harvesting.

The report "was a little less accusatory than expected," wrote Ian Katz, managing director at policy research firm Capital Alpha Partners LLC. But some of the next steps listed by CFPB Director Rohit Chopra, if executed, would have negative implications for BNPL lenders, Katz wrote in a note.

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