CFPB opens inquiry into “Buy Now, Pay Later” credit plans

We’re definitely cruising through January, with only one week left of the first month of 2022. It’s been a busy month, both personally and professionally.  On a personal note, my husband and I closed on our first house on Friday afternoon! We had been under contract since the end of November, so it’s been quite the waiting game. The house needs some work, so we will have plenty to keep us busy for the rest of the winter, but we are so excited to finally have separate office spaces, instead of both trying to work from the living room of our one bedroom apartment. While not quite so close, the last 2 years have felt something like this:

The CFPB also began a new project at the end of 2021, when it issued orders in December to various companies offering “buy now, pay later” (BNPL) credit programs to collect information on the risks and benefits of the loans. The orders went to Affirm, Afterpay, Klarna, PayPal, and Zip. CFPB Director Rohit Chopra likened the BNPL model as “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.”

The press release on the inquiry notes that “the law requires that the CFPB monitor consumer financial markets and enables the agency to require market players to submit information to inform this monitoring.” It is expected that the bureau will publish its findings from the BNPL inquiries to “illuminate the range of these consumer credit products and their underlying business practices.”

The CFPB is specifically looking for information about the following:

 

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