CFPB Set To Ditch BNPL Rule

In October, the Financial Technology Association (FTA) filed a lawsuit challenging the BNPL rule.

In a court filing this week, the CFPB and FTA have moved to stay the case, noting that the regulator “is planning to revoke the interpretative rule,” mooting the issues raised in the litigation.

The CFPB rule would have meant that BNPL providers would have needed to give consumers some key legal protections and rights that apply to conventional credit cards. These include a right to dispute charges and demand a refund from the lender after returning a product purchased with a buy now, pay later loan.

At the time of filing its suit, the FTA said the rule overstepped legal bounds and risked creating confusion for consumers.

Said CEO Penny Lee: “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.”

Since President Donald Trump fired director Rohit Chopra soon after taking office, the CFPB has been busy scaling back its activities under acting Director Russell Vought.

In recent weeks it has dropped a host of lawsuits, including against JPMorgan Chase, Bank of America and Wells Fargo over fraud on the Zelle P2P payments network.

Meanwhile, the US Senate has voted to overturn a rule that would have given the watchdog oversight of tech giants, such as Apple, Google and X, that offer digital payment apps and wallets.