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.
"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.
What!? (Score:4, Insightful)
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)
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?
It not lending per se (Score:4, Funny)
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.
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I'm guessing English is not your first language so I'll give you a pass on difficult that was to parse.
I simply assumed that he was employing the accepted literary style of the contracts and the terms-and-conditions documents used in the financial industry. BTW, I'm guessing you meant to type "...on how difficult that was...".
Re:It's not lending per se, it's apptual (Score:1)
No, it's I-want-the-thing-now-and-I-open-the-app-and-I-get-the-thing-and-I-subscribe-to-sending-money-every-month-and-I-now-have-the-thing. Whatever planet you live on, Boomer. Lending and debt is so out, dude. You just can't achieve in this society unless you accept the new lingo. Mobility Payments are good. Self-gifting the experience with immediacy creates money memories. I think we've heard from deep within the bell curve. You old fuddie duddies are always trying to drag us back to the ages where things
In related news (Score:5, Informative)
The CFPB prevailed [scotusblog.com] (full opinion here [supremecourt.gov], and so gets to continue prosecuting scam artists, grifters, and financial predators.
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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.
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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.
Scam (Score:2)
Re: (Score:3)
Re: (Score:2)
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