The Financial Technology Association (FTA) has filed a lawsuit against the Consumer Financial Protection Bureau (CFPB), challenging the bureau's new buy now, pay later (BNPL) rule. The FTA argues that the CFPB has overstepped its authority and violated the Administrative Procedure Act (APA) and the Truth in Lending Act (TILA) by extending traditional credit card protections to BNPL products without following the required notice-and-comment rulemaking process. The lawsuit claims that the CFPB's interpretation of BNPL providers as "creditors" under Regulation Z is not supported by the law, as these products do not fit the definition of a credit card. The FTA contends that the CFPB's actions are arbitrary and capricious, as they impose new obligations on BNPL providers without adequate justification or compliance time. The outcome of this case could significantly impact the regulatory landscape for BNPL products and the financial technology industry as a whole. The CFPB's response to the complaint is expected by December 21, 2024.
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