This article explores the first part of a two-part podcast series that repurposes a recent webinar discussing the Consumer Financial Protection Bureau's (CFPB) use of an interpretive rule to enhance regulatory requirements for buy-now, pay-later (BNPL) products. It begins by clarifying the distinction between interpretive and legislative rules, emphasizing that interpretive rules aim to clarify existing laws rather than create new ones. The article outlines the CFPB's rationale for opting for an interpretive rule, including a request for public comments, which is atypical for such rules. It also provides insights into how BNPL products function and their growing popularity among consumers and merchants. The podcast delves into the implications of the CFPB's interpretive rule, particularly its potential redefinition of a “credit card” to encompass “digital user accounts.” Finally, it discusses the challenges BNPL providers may face in adhering to the new requirements, including billing statement timing and dispute notifications.
Read the full article here.