The US Consumer Financial Protection Bureau’s (CFPB) new rule on buy now, pay later (BNPL) lenders has sparked mixed reactions among industry leaders. Affirm welcomed the rule, while Klarna called it “baffling.”
The CFPB’s interpretive ruling, released yesterday, mandates that BNPL lenders adhere to the same regulations as credit card issuers. This means BNPL providers must extend key legal protections to consumers, such as the right to dispute charges and seek refunds from the lender after returning a product purchased with a BNPL loan.
Affirm expressed support for the CFPB’s move, stating that it promotes consistent industry standards, many of which Affirm already follows, to ensure greater consumer choice and transparency.
Klarna, while also endorsing “proportionate” regulation, criticized the new rule for its lack of distinction between BNPL services and credit cards. The Swedish firm argued that equating BNPL to credit cards is misguided, comparing it to “comparing apples with oranges.”
Klarna highlighted that other countries, including the UK and Australia, have recognized the fundamental differences between BNPL services and traditional credit cards. Klarna hopes that the CFPB will eventually acknowledge these differences.
