American Fintech Council (AFC) Responds to Consumer Financial Protection Bureau (CFPB) Interpretive Rule on “Buy Now, Pay Later”

THE American Fintech Council (AFC)the fastest growing industry association representing responsible fintech companies and innovative banks, has presented its response to the Consumer Financial Protection Bureau (CFPB) on the proposed interpretative rule and request for comment on the use of digital user accounts to access Buy Now, Pay Later loans.

“Regulatory clarity and consistent standards are critical for providers to deliver safe, transparent and responsible financial services, and even more important for consumers who expect protections when using financial services, including Buy Now, Pay Later,” She said Phil Goldfeder, AFC CEO“We are encouraged by the work the CFPB has done to better understand the BNPL industry. We welcome the opportunity to provide feedback to ensure that the interpretative guidance increases consumer protections without limiting competition or innovations that provide greater choice and transparency for consumers.”

As part of its mission to promote accessible, responsible, and transparent financial products, the AFC has developed and adopted specific policy standards for the provision of BNPL products, including classifying products as loans, ensuring consistent and transparent terms, underwriting every transaction at the point of sale, providing consumers with the closed-end loan disclosures required by the Truth in Lending Act (TILA), and working with credit reporting agencies to improve reporting standards.

In its letter, the AFC applauded the CFPB for its 2022 report on BNPL and its continued engagement with industry leaders. The proposed new interpretive rule would ensure that nonbank financial companies adhere to the same credit card lending rules as large banks, credit unions, and other financial institutions already overseen by the CFPB. The AFC welcomed the CFPB’s recommendations, but requested additional time and clarity to ensure that all BNPL providers, if necessary, can adjust their programs to comply and ensure consistent consumer product experiences.

“As required by the Interpretative Rule, AFC has consistently supported compliance with the spirit of the Truth in Lending Act (TILA) and its implementing regulation, Regulation Z. To that end, our members offering BNPL loans have sought to ensure that they are aligned with this standard,” he wrote Ian P. Moloney, SVP, Chief Policy and Regulatory Affairs, wrote in the AFC’s recent letter to the CFPB

Read the full letter Here.

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