Newsroom
NAFCU writes to CFPB regarding BNPL products
NAFCU Regulatory Affairs Counsel James Akin wrote to the CFPB Friday in response to the Bureau’s request for comment (RFC) regarding its inquiry into providers of buy now pay later (BNPL) products. Particularly, Akin wrote on behalf of members having “serious concerns regarding the utilization of ‘Pay in 4’ loans by unsupervised fintech companies.”
Specifically, Akin outlines potential risks of the Pay in 4 model including the inability of consumers to build credit and risk of damage to their credit scores, the outsized use of BNPL by consumers in poor financial health, the misleading marketing and inadequate disclosures resulting in unexpected fees, and the lack of transparency regarding use of consumer data.
“NAFCU requests that the Bureau release a comprehensive report regarding its findings from the December market monitoring orders and this RFC,” wrote Akin. “Furthermore, to the extent that these findings reflect a deliberate intent on the part of ‘Pay in 4’ BNPL providers to circumvent regulation and target financially vulnerable consumers, NAFCU urges the Bureau to take steps to ensure that these unregulated lenders institute adequate consumer protection practices.
In addition to requesting the Bureau engage in consumer education regarding the potential risks associated with “Pay in 4” products, Akin also requested that the Bureau consider several updates to Regulation Z that would level the playing field in the BNPL market to increase the availability of consumer credit while maintaining consumer protections.
“The addition of more credit unions, with their culture of compliance and consumer protection, to the BNPL market, can only serve to improve the standards and practices of BNPL as a whole,” stated Akin.
Read the full letter here. NAFCU recently published a Regulatory Alert and an insight post on the NAFCU Networks engaging with credit unions regarding recent litigation involving BNPL products. The association will continue to keep credit unions informed of relevant updates from the CFPB via the NAFCU Today.
Share This
Related Resources
Add to Calendar 2024-06-26 14:00:00 2024-06-26 14:00:00 Gallagher Executive Compensation and Benefits Survey About the Webinar The webinar will share trends in executive pay increases, annual bonuses, and nonqualified benefit plans. Learn how to use the data charts as well as make this data actionable in order to improve your retention strategy. You’ll hear directly from the survey project manager on how to maximize the data points to gain a competitive edge in the market. Key findings on: Total compensation by asset size Nonqualified benefit plans Bonus targets and metrics Prerequisites Demographics Board expenses Watch On-Demand Web NAFCU digital@nafcu.org America/New_York public
Gallagher Executive Compensation and Benefits Survey
preferred partner
Gallagher
Webinar
AI in Action: Redefining Disaster Preparedness and Financial Security
Strategy
preferred partner
Allied Solutions
Blog Post
Add to Calendar 2024-06-21 09:00:00 2024-06-21 09:00:00 2024 Mid-Year Fraud Review Listen On: Key Takeaways: [01:16] Check fraud continues to be rampant across the country. Card fraud is affecting everyone. [04:31] Counterfeit US passport cards are just another new toolbox in the bad actors’ toolbox. [07:21] Blocking the fallback is the only way to defeat counterfeit cards. [11:17] The best way is constant education to your members in as many channels as you can. [13:02] We are still seeing overdraft lawsuits. Make sure the programming you have at your credit union matches what you have displayed for the members. Web NAFCU digital@nafcu.org America/New_York public
2024 Mid-Year Fraud Review
Strategy & Growth, Consumer Lending
preferred partner
Allied Solutions
Podcast
Get daily updates.
Subscribe to NAFCU today.