BNPL financing, offered by firms like Affirm and Klarna, allows consumers to spread the cost of a purchase over several interest-free payments. The growth of e-commerce, particularly during the pandemic, has turned BNPL credit into a booming, multibillion-dollar market.
The CFPB’s new guidance follows a 2022 report that identified a lack of uniform disclosures and other gaps in consumer protections within the BNPL market. The agency is now working to ensure BNPL providers adhere to more credit-card-like standards.
The CFPB will accept public comments on Wednesday’s guidance to determine if further clarifications or revisions are needed. “Given the growth in outstanding consumer credit and the rise in new forms of credit, we’re going to continue to carefully monitor these markets and take action to ensure that consumers are being treated fairly,” Chopra told reporters.
