A fintech trade group has filed a lawsuit in a D.C. federal court against the Consumer Financial Protection Bureau (CFPB), contesting its interpretive rule regarding Buy Now, Pay Later (BNPL) products. This rule, established in May, categorizes BNPL providers similarly to credit card issuers under the Truth in Lending Act (TILA). The complaint argues that the CFPB violated the Administrative Procedure Act (APA) by failing to adhere to necessary notice and comment protocols, overstepping its statutory authority, and imposing unreasonable requirements on BNPL providers. This legal action is part of a broader discourse surrounding the regulation of the BNPL sector, which has seen mixed reactions from lawmakers. While some members of the House of Representatives have proposed a resolution to disapprove the rule, others in the Senate are advocating for its swift implementation. The CFPB is anticipated to defend its position robustly, emphasizing its commitment to overseeing innovative financial products.
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