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AFSA Supports Bureau RFI on BNPL Providers

AFSA Supports Bureau RFI on BNPL Providers

Last week, AFSA submitted a comment letter to the Consumer Financial Protection Bureau (CFPB) in response to its request for information (RFI) regarding Buy-Now-Pay-Later (BNPL) providers. The letter outlines AFSA’s support for the Bureau’s efforts to understand the BNPL marketplace and highlights some of the key differences that exist between BNPL providers and AFSA member companies.

AFSA member companies s place the customer first:

  1. AFSA member companies follow more than 22 different federal laws, spanning eight agencies, creating a layered regulatory structure to protect consumers.
  2. State-licensed members comply with a myriad of different regulations.
  3. Members provide clear and definitive disclosures with credit offers.
  4. AFSA member companies have comprehensive underwriting systems and perform thorough ability-to-repay analyses.

BNPL providers, the letter notes, operate outside of these bounds, potentially exposing consumers to risks, many of which they may be completely unaware. These include autopay requirements, loan stacking, insufficient disclosures and underwriting, and poor dispute procedures.

The letter recommends that the Bureau “(1) support the credit bureaus as they develop a framework to allow for BNPL credit reporting, and (2) consider requiring BNPL providers to disclose all relevant product information in a clear, transparent, and truthful manner.”

AFSA will continue to work with the Bureau to protect consumers and maintain access to safe, responsible credit.

March 30th, 2022

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