WASHINGTON—In a letter to the CFPB, America’s Credit Unions is objecting to the use of an interpretive rule rather than a proposed rulemaking with a standard notice and comment period when it comes to a proposal related to buy now, pay later.
ACU’s Senior Regulatory Affairs Counsel James Akin noted that while the organization supports the Bureau’s efforts to bring regulatory consistency to BNPL lending and provide much needed consumer protections to a largely unregulated market, the CFPB should reissue its interpretive rule addressing applicability of subpart B of Regulation Z to lenders that issue digital user accounts used to access credit.
‘Transparency’ Needed
“Expansive and novel interpretations with broad implications such as those found in the rule require transparency and stakeholder feedback,” wrote Akin.
In addition, Akin argued that BNPL products would benefit from additional protections not covered in the interpretive rule, such as ability-to-repay requirements and data protections.