Become a fan of Slashdot on Facebook

 



Forgot your password?
typodupeerror
×
Businesses The Almighty Buck United States

CFPB Says Buy Now, Pay Later Firms Must Comply With US Credit Card Laws (cnbc.com) 14

The Consumer Financial Protection Bureau declared on Wednesday that customers of the burgeoning buy now, pay later industry have the same federal protections as users of credit cards. From a report: The agency unveiled what it called an "interpretive rule" that deemed BNPL lenders essentially the same as traditional credit card providers under the decades-old Truth in Lending Act. That means the industry -- currently dominated by fintech firms like Affirm, Klarna and PayPal -- must make refunds for returned products or canceled services, must investigate merchant disputes and pause payments during those probes, and must provide bills with fee disclosures.

"Regardless of whether a shopper swipes a credit card or uses Buy Now, Pay Later, they are entitled to important consumer protections under long-standing laws and regulations already on the books," CFPB Director Rohit Chopra said in a release. The CFPB, which last week was handed a crucial victory by the Supreme Court, has pushed hard against the U.S. financial industry, issuing rules that slashed credit card late fees and overdraft penalties. The agency, formed in the aftermath of the 2008 financial crisis, began investigating the BNPL industry in late 2021.

This discussion has been archived. No new comments can be posted.

CFPB Says Buy Now, Pay Later Firms Must Comply With US Credit Card Laws

Comments Filter:
  • What!? (Score:4, Insightful)

    by timeOday ( 582209 ) on Wednesday May 22, 2024 @03:51PM (#64491623)
    You mean calling it something else doesn't exempt me from the laws?

    Just a minute, I'll launch a website calling it yet another thing, and in 5 more years you can get a ruling on that.

    • Re:What!? (Score:4, Insightful)

      by smooth wombat ( 796938 ) on Wednesday May 22, 2024 @04:21PM (#64491689) Journal
      You mean calling it something else doesn't exempt me from the laws?

      Such as a "ride sharing" service where you have to request someone to pick you up and you pay them for this service? Or did you mean a "home sharing" service where people reserve your home for a few night getaway?
    • by byronivs ( 1626319 ) on Wednesday May 22, 2024 @04:23PM (#64491695) Journal

      It more like giving you some money that you don't have enough of and you getting what you want now. We make money by charging a small amount based on the amount you spent initially, then as you reduce that initial amount by putting money towards it. Then the subscription amount you are charged monthly is reduced by an amount in accordance with a ratio of that new amount minus the money you paid to the original amount minus the subscription fee to maintain the account. It's not a loan though, that's hundreds year old tech and quite obsolete in these modern times. And app of course, it's an app, so not the same.

  • In related news (Score:5, Informative)

    by necro81 ( 917438 ) on Wednesday May 22, 2024 @04:44PM (#64491765) Journal
    There was a Supreme Court case argued last October [scotusblog.com], challenging the very existence of the CFPB due to how it gets funded. (Most gov't agencies are funding as a line-item in an appropriations bill in Congress, one fiscal year at a time. CFPB gets funded via the Federal Reserve, which has its own ways of raising funds, and the CFPB's operating budget has no effective limit.)

    The CFPB prevailed [scotusblog.com] (full opinion here [supremecourt.gov], and so gets to continue prosecuting scam artists, grifters, and financial predators.
    • ... gets to continue prosecuting ...

      When other government departments make a new ruling, the result is being sued for exceeding bureaucratic authority or being de-funded by 'concerned [gocomics.com]' senators. I guess CFPB's unique structure is an admission that much of government is subject to "fixing [gocomics.com]" by elected officials.

      • ... gets to continue prosecuting ...

        When other government departments make a new ruling, the result is being sued for exceeding bureaucratic authority or being de-funded by 'concerned [gocomics.com]' senators. I guess CFPB's unique structure is an admission that much of government is subject to "fixing [gocomics.com]" by elected officials.

        CFPB rules are still challenged in court. But yah, if Congress doesn't like it, it has to do its job and pass a law, not stomp their feet and obstruct paying their bills.

        It'd be like instead of working with our spouse to cancel the lawn care service we threatened not to pay the mortgage. Or because ending the contract would be unpopular with the family while you do control the checkbook, you just pay them less until they go away then blame them for sucking. That's abusing the power of the purse IMO.

  • If you cannot afford to pay now, you shouldn't buy, that's it. Debt is the modern form of slavery, but if people are stupid enough to fall for it, do they deserve protection? Perhaps schools should teach young people how evil being in debt is.
    • This This This. School is supposed to help kids prepare for life, and understanding basic personal finance should be near the top of the list. Right up there with if you need 250K in student loans for a degree that can't get you a job, DON'T.
    • Just to be a bit contrarian to the "debt is the modern form of slavery" quote, debt is even older than money. Slavery by debt has even a name: peonage and it was very common in ancient Greece and Rome.

      I come from a poor country, in comparison to the US. Here, buy-now-pay-later is the most common form of consumption and it's called "crediário". Products are financed directly from shopkeepers to their clients. Millions of families wouldn't even have clothes, a stove or refrigerators if it wasn't for this

Nothing makes a person more productive than the last minute.

Working...