Phil Goldfeder, CEO of the American Fintech Council (AFC), issued a statement on May 22, 2024, regarding the Consumer Financial Protection Bureau's (CFPB) new Interpretive Rule on Buy Now Pay Later (BNPL) products.
“The Interpretive Rule released by the Consumer Financial Protection Bureau (CFPB) provides vital clarity for companies offering responsible Buy Now Pay Later (BNPL) products. The Rule recognizes the benefits that responsible BNPL providers offer but more importantly provides consistent industry standards to promote greater choice and transparency for consumers utilizing responsible BNPL products."
Goldfeder emphasized AFC's commitment to promoting affordable, responsible, and transparent financial products. He highlighted that AFC has developed specific policy standards for BNPL products, which include classifying them as loans, ensuring transparent terms, underwriting every transaction at the point of sale, providing necessary disclosures as per the Truth in Lending Act (TILA), and collaborating with credit bureaus to improve reporting standards to create safe pathways out of debt.
"AFC members offering BNPL loans already voluntarily comply with provisions enumerated by the CFPB and we urge all companies offering BNPL products to embrace responsible industry standards," he added.
Goldfeder acknowledged the CFPB's efforts in understanding the BNPL industry and reiterated the findings of the 2022 CFPB report. "We believe that clear guidelines and consistent industry practices can help ensure that consumers continue to have choice and flexibility when it comes to their payment options. We look forward to continuing to work with the CFPB, and all of our stakeholders to promote innovation that responsibly extends access to credit while ensuring that consumers benefit from consistent standards across BNPL."
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