The Consumer Financial Protection Bureau (CFPB) has issued a new rule classifying Buy Now/Pay Later (BNPL) products as credit cards under Regulation Z, aligning them with traditional credit card protections. This decision comes after observing the BNPL sector for several years, which saw significant growth during the pandemic as consumers sought flexible payment options for online purchases. The rule mandates BNPL lenders to provide similar disclosures, billing statements, and consumer protections as credit card companies, aiming to address potential risks such as increased delinquencies and opaque lending practices. Industry reactions are mixed, with some operators arguing that the regulations are premature and could stifle innovation and growth. Public comments on the proposed rule are open until August 1, 2024.
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