CU Trades Ask CFPB to Regulate Buy Now Pay Later Firms


Contending that the programs are growing tremendously and are largely unregulated, credit union trade groups are calling on the Consumer Financial Protection Bureau to set rules for Buy Now Pay Later programs being offered by relatively new financial companies.

The National Association of Federally-Insured Credit Unions and its members “have significant concerns regarding BNPL providers’ apparent targeting of low-income or paycheck-to-paycheck consumers as well as the insufficient underwriting that accompanies each loan,” James Akin, the group’s regulatory affairs counsel, told the CFPB last week.

“Credit unions are concerned the non-application of consumer protection laws to some BNPL products could leave consumers unprotected while also impacting the ability of credit unions to lend with full and complete credit information,” Credit Union National Association’s Alexander Monterrubio, senior director of advocacy and counsel for consumer protection, told the agency.

Monterrubio noted that in 2021, consumers spent nearly $100 billion in purchases using BNPL, up from $24 billion in 2020.

BNPL programs allow people to make purchases, with a financial company extending loans to consumers to pay for the purchases.

The CFPB has ordered the largest BNPL companies to provide information about industry practices and risks.  The agency also has been seeking public comment on the industry; those comments were due last week.

“Buy now, pay later is the new version of the old layaway plan, but with modern, faster twists where the consumer gets the product immediately but gets the debt immediately too,” said CFPB Director Rohit Chopra.

Monterrubio said that credit unions are concerned that BNPL providers are offering “glossy, tech-savvy alternatives” to traditional loan products, while remaining unregulated.

“CUNA has long held the position that similar products and services should be regulated similarly so that consumer protections run with a product or service, not with the entity providing the products or service,” he wrote.

Akin said that NAFCU is concerned about the “absence of a level playing field” in the BNPL market, adding that companies are able to design their products to avoid regulation. He added that the BNPL providers do not necessarily care about whether consumers can afford to make purchases and repay the loans.


  • David Baumann

    David Baumann established and edited the Washington Credit Union Daily website before it was put on hiatus while he served as the editor of the regulatory and legislative blog at CUCollaborate. Before starting Washington Credit Union Daily, David was the Washington correspondent for the Credit Union Times. A veteran Washington reporter, he has spent his career writing and editing for many of the capital’s leading publications, including CongressDaily, National Journal magazine and Congressional Quarterly Weekly. He was part of a team that won a 2005 National Headliner Award for a special issue of National Journal on “The State of Congress.” He holds a B.A. in political science from The George Washington University and an M.A. in journalism from Indiana University.

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