Buy now, pay later firms catch a break as CFPB backs off enforcement

The U.S. Consumer Financial Protection Bureau (CFPB) signaled a softer regulatory approach last month, easing its investigation of financial firms following the Trump administration’s broader efforts to scale back regulatory enforcement on businesses. The agency reaffirmed this pivot as it will ease scrutiny of “Buy Now, Pay Later” (BNPL) firms. 

In an announcement posted on the CFPB’s site on Tuesday, the agency said it will ”not prioritize enforcement actions taken on the basis of the Truth in Lending” regarding BNPL companies. Instead, it will support the interests of ”hard-working American taxpayers, servicemen, veterans, and small businesses,” which echoes what the agency said last month by increasing its focus on ”pressing threats to consumers, particularly service members and their families and veterans.”

BNPL companies had been under scrutiny from the CFPB since 2021. Services such as Affirm, Klarna, and Afterpay allow customers to purchase products online, from clothing to concert tickets, in payment installments. They’ve been scrutinized for offering credit lines to consumers without offering the same credit protections a person would receive with a credit card or a loan. This would include not being able to dispute transactions, not being credited when products are refunded, or providing a billing statement.