The Consumer Financial Protection Bureau (CFPB) announced Wednesday that shoppers using buy-now, pay-later (BNPL) products are covered by some federal safeguards similar to those for traditional credit cards. This is the agency’s first-ever guidance aimed at this fintech-heavy financing field.
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CFPB Buy-Now, Pay-Later Guidance
The CFPB’s guidance, issued as an interpretive rule, states that BNPL firms qualify as credit card providers under federal law, specifically the Truth In Lending Act (TILA). This means they must extend certain credit card-like protections to consumers.
These protections include the right to dispute purchases and receive refunds for returned items. Consumers must also receive regular billing statements showing how much they owe on their BNPL loans.
CFPB Director Rohit Chopra emphasized the importance of consistent business practices for consumers using BNPL options. “When consumers check out and choose buy now, pay later, they don’t know if they will get a refund if they return their product or whether the lender will help them if they didn’t get what was promised,” Chopra said. “Regardless of whether a shopper swipes a credit card or uses buy now, pay later, they are entitled to important consumer protections under longstanding laws and regulations already on the books.”
