In a shot across the bow to the buy now, pay later (BNPL) industry, the U.S. Consumer Financial Protection Bureau (CFPB) today issued a report suggesting that companies like Klarna and Afterpay, which allow customers to pay for products and services in installments, must be subjected to stricter oversight.
The CFPB — in a step toward regulation — plans to issue guidance to oversee BNPL vendors and have them complete “supervisory” exams in line with credit card company reporting requirements, according to agency officials speaking at a presser this week.
The CFPB first announced that it would investigate the burgeoning (but rocky) BNPL industry in December 2021. While the agency has jurisdiction over banks, credit unions, securities firms, and other financial services firms based in the U.S., it didn’t previously regulate BNPL providers, who argued that they were exempted from many of the existing rules …
