WASHINGTON, D.C. – The Financial Technology Association (FTA)’s President and CEO Penny Lee issued the following statement on the lawsuit it filed today challenging the Consumer Financial Protection Bureau’s (CFPB) final interpretive rule addressing pay-in-four Buy Now Pay Later (BNPL) products:
“Millions of Americans choose to pay in four with Buy Now Pay Later, and our industry welcomes regulation that fits the unique characteristics of these products without duplicating existing rules and protections. We share the Bureau’s goal of promoting consumer health and well-being and are committed to working with the CFPB and other regulators to craft durable rules for the future that fit the unique nature of pay-in-four BNPL products and strengthen protections that these products already provide to consumers.”
“Unfortunately, the CFPB’s rushed interpretive rule falls short on multiple counts, oversteps legal bounds, and risks creating confusion for consumers. The CFPB is seeking to fundamentally change the regulatory treatment of pay-in-four BNPL products without adhering to required rulemaking procedures, in excess of its statutory authority, and in an unreasonable manner. We believe the CFPB’s attempt to impose regulations designed for credit cards on the pay-in-four products offered by many of our members shows an underlying misunderstanding of BNPL. Consumers are having positive experiences with pay-in-four products and benefit from strong consumer protections such as zero interest on outstanding balances, no compounding interest, and pausing accounts if consumers fall behind on payments to avoid an excessive debt burden.”
“Lasting regulation must be grounded in existing statutory procedures and provide the public with an adequate opportunity to participate in the formulation of those rules. We urge the CFPB to withdraw its interpretive rule and engage in an appropriate process to determine how best to regulate pay-in-four products.”
Click here to read the full lawsuit filed today in the United States District Court for the District of Columbia.
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The Financial Technology Association (FTA) represents industry leaders shaping the future of finance. We champion the power of technology-centered financial services and advocate for the modernization of financial regulation to support inclusion and responsible innovation.