The Consumer Financial Protection Bureau (CFPB) has recently issued an Interpretive Rule aimed at the Buy Now, Pay Later (BNPL) industry, providing clearer guidelines on how these lenders should disclose terms and consumer rights. This rule, effective July 30, 2023, follows a comment period that ended on August 1, signaling that the CFPB is moving forward with its regulations despite the feedback process. The rule extends the definitions of "card issuer" and "creditor" to include BNPL providers, aligning them more closely with traditional credit regulations under Regulation Z. Concerns raised by the Office of the Comptroller of the Currency (OCC) regarding consumer understanding of repayment obligations and transaction disputes are also addressed. In a recent blog post, CFPB Director Rohit Chopra noted the BNPL industry's positive response to the rule, indicating a collaborative effort towards compliance. The CFPB will not impose penalties on lenders transitioning into compliance in good faith, promoting a smoother adaptation to these new guidelines.
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