A fintech trade group has filed a lawsuit against the Consumer Financial Protection Bureau (CFPB) in a D.C. federal court, contesting the agency's interpretive rule that classifies Buy Now, Pay Later (BNPL) providers as credit card issuers under the Truth in Lending Act (TILA). The rule, which was released in May, has drawn criticism for allegedly violating the Administrative Procedure Act (APA) by not adhering to necessary notice and comment requirements, overstepping statutory authority, and imposing arbitrary requirements on BNPL companies. This legal challenge follows previous actions, including a joint resolution introduced in the House of Representatives aimed at disapproving the rule, while some Senate members have urged for its swift implementation. The lawsuit highlights the ongoing regulatory tug-of-war surrounding the burgeoning BNPL sector, as the CFPB is expected to vigorously defend its position in favor of increased oversight of innovative financial products.
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