Fintech/BNPL Letter to CFPB Director

Download a copy of a consumer and civil rights groups letter to CFPB Director Rohit Chopra on Big Tech payments issues, including Buy Now, Pay Later plans. To date, the final version of the letter has grown to 89 signers. Excerpt:

“New consumer credit products are exploding across market areas, including but not limited to buy now, pay later (BNPL) loans, income share agreements, cash advances, “fintech” overdraft or overdraft avoidance products, and earned wage access products or look-alike products.

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“Buy Now, Pay Later products may provide consumers with an affordable way to finance larger purchases, as these products allow consumers to purchase an item by only paying a portion of the price up front. Then, the consumer typically pays the rest of the debt in three or four equal, often interest-free installments over a set period of time (often 6 weeks). However, BNPL products do not underwrite for a consumer’s ability to repay, can rely on the expectation of late fees, can be difficult to manage, and can trigger punitive overdraft or nonsufficient fund fees if linked to a bank account. Further, these products can lead consumers into taking on unmanageable amounts of debt and lack the same dispute or refund rights that credit cards have should a consumer be unsatisfied with their purchase.”