The Consumer Financial Protection Bureau (CFPB) has issued a report focused on the Buy now, Pay later industry. The report details key criticisms on how BNPL lenders are creating financial difficulty for consumers due to a combination of overly lax approval rates along with high fees and penalties for late or missed payments. This behavior goes against the principles of responsible lending and can cause harm to consumers.
There are 3 key CFPB concerns surrounding BNPL and responsible lending:
1. Consumer protection (or lack thereof)
2. Data harvesting and monetization
3. Debt accumulation
With changes for legacy BNPL on the horizon, it’s important for retailers to get ahead and prepare themselves to adapt to the shifting landscape.
In full transparency, the CFPB’s projected changes don’t shake things up for us here at Splitit, as we use existing credit cards and don’t issue new loans, we’re already aligned with responsible lending practices.
Learn how you can integrate Splitit to add responsible BNPL into your payment offering today.