By 
The Consumer Financial Protection Bureau (CFPB) is set to reverse its stance on Buy Now, Pay Later (BNPL) regulations, retracting an interpretive rule that classified pay-in-four BNPL lenders under the same regulatory framework as credit cards.
This decision follows an October lawsuit filed by the Financial Technology Association (FTA) challenging the rule. In a recent court filing, both the CFPB and FTA moved to pause the case, with the regulator confirming its intent to rescind the rule—rendering the legal dispute unnecessary.
The now-defunct rule would have required BNPL providers to extend critical consumer protections akin to those governing traditional credit cards. These included rights to dispute transactions and request refunds directly from lenders when returning products purchased through BNPL loans.
At the time of the lawsuit, the FTA argued that the rule exceeded the CFPB’s statutory authority and risked causing consumer confusion. CEO Penny Lee criticized the move, stating, “The CFPB is attempting to redefine the regulatory treatment of pay-in-four BNPL products without following proper rulemaking procedures, acting beyond its legal scope, and in an unreasonable manner.”
Under acting Director Russell Vought, the CFPB has significantly scaled back enforcement actions. In recent weeks, the bureau has dropped several lawsuits, including cases against JPMorgan Chase, Bank of America, and Wells Fargo over fraud concerns related to the Zelle P2P payments network.
Additionally, the US Senate has voted to repeal a rule that would have granted the CFPB oversight of major tech firms like Apple, Google, and X regarding their digital payment platforms.
Comments