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ARTICLE · 27 SEPTEMBER 2022

CFPB Targets Buy Now, Pay Later Lending

Cooley LLP
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On September 15, 2022, the Consumer Financial Protection Bureau published a report analyzing trends in the buy now, pay later industry.

United StatesConsumer Protection
Cooley LLP
Cooley LLP
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On September 15, 2022, the Consumer Financial Protection Bureau published a report analyzing trends in the buy now, pay later (BNPL) industry. In particular, the CFPB finds that the BNPL industry has experienced rapid growth since 2020 and that, while BNPL products offer certain benefits to consumers, the bureau believes that borrowers are receiving uneven disclosures and consumer protections when using those products.

CFPB reports trends in BNPL loans

Based on data collected between 2020 and 2021, the CFPB reports:

  • A 4% increase in the percent of applicants who were approved for credit.
  • A $135 increase in the average purchase amount financed by a BNPL loan.
  • A 2.6% increase in the percent of borrowers who were charged at least one late fee each year – with those late fees accounting for an additional 1.9% of lender revenue over such time and an overall 1.7% increase in lender revenues attributable to consumer fees.

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