CFPB Forced to Get Creative With Buy Now, Pay Later Protections

The Consumer Financial Protection Bureau will have to use a variety of tools to oversee buy now, pay later products because federal consumer protection laws will not always apply to the fast-growing financing sector.

CFPB Director Rohit Chopra said Thursday that he wants to bring credit-card style protections for the sector, including improving disclosures, fraud and dispute resolution protections and other issues in buy now, pay later (BNPL) products. These are typically short-term installment loans paid back over four payments every two weeks.

Some traditional consumer protection laws—like the Truth in Lending Act and the Credit CARD Act—don’t cover BNPL ...