Stock market data

CFPB Mandates BNPL Lenders to Follow Credit Card Laws Under Truth in Lending Act

May 22, 2024, 02:36 PM

The U.S. Consumer Financial Protection Bureau (CFPB) has announced that 'buy now, pay later' (BNPL) lenders must comply with U.S. credit card laws. This new rule ensures that BNPL companies, including Affirm, Klarna, and Afterpay, provide consumers with the same legal protections as credit card users. These protections include the right to dispute charges and demand refunds for returned products. The move aims to impose more oversight on the fast-growing BNPL sector, which has been largely unregulated until now. The decision comes after more than two years of studying the BNPL market. The Biden administration supports this rule, emphasizing that consumers deserve equal protections regardless of the payment method they choose. The CFPB will classify BNPL apps under the Truth in Lending Act.