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CFPB Determines ‘Buy Now Pay Later’ Providers are Card Issuers

The Consumer Financial Protection Bureau (CFPB) recently released an interpretive rule stating that “Buy Now, Pay Later” (BNPL) providers are “card issuers” and “creditors” under the federal Truth in Lending Act (TILA) and Regulation Z and must follow Subpart B (open-end credit provisions) and other provisions of Regulation Z.

Under the interpretive rule, BNPL lenders must:

  • Investigate disputes: BNPL lenders must investigate disputes that consumers initiate. Lenders must also pause payment requirements during the investigation and sometimes must issue credits.
  • Refund returned products or cancelled services: When consumers return products or cancel services for a refund, BNPL lenders must credit the refunds to consumers’ accounts.
  • Provide billing statements: Consumers must receive periodic billing statements like the ones received for classic credit card accounts.

Access the ‘Compliance Hotline’
Your League-member benefits include the Compliance Hotline — providing exclusive access to dedicated compliance experts:

Using the above phone number and email address, you can gain access to a knowledgeable team that’s ready to address all your credit union’s compliance inquiries — promptly and efficiently. With the Compliance Hotline, you can proactively respond to impromptu questions and issues by getting clarity and insight on technical topics that normally slow you down. We want to help you unlock the full potential of your League membership by leveraging the resources and support you need to navigate the complex world of compliance effortlessly. We’re ALWAYS just a phone call or email away!

Additionally, other League-member compliance resources include:

  • ViClarity
  • CU PolicyPro
  • ComplySight
  • InfoSight
  • CU Store
  • Record Retention Guide
  • GRC Technology Solutions

For more information, email Lisa Quaranta.

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