CFPB Issues FAQ Regarding Buy Now, Pay Later Products

The CFPB recently issued a series of FAQs to support understanding and compliance necessary for implementing Buy Now, Pay Later (BNPL) products, as well as direct industry participants to applicable provisions and interpretations under Regulation Z, 12 CFR §1026.  

Earlier this year, the Bureau issued an interpretative rule regarding how subpart B of Regulation Z applies to participants that market BNPL products.  According to the Bureau’s interpretation of the rule, these participants constitute “card issuers” as well as “creditors” for the purposes of complying with Regulation Z. The Bureau’s published FAQs address BNPL products being subject to Regulation Z requirements, as well as questions regarding what products constitute BNPL, including Pay-In-Four BNPL loans, when the loan providers of these products must provide periodic statements, what must be disclosed in these statements and why consumers of BNPL loans are required to utilize digital user accounts to access these products.