Feedback requested: Implications of BNPL lending on housing affordability, stability

Buy Now, Pay Later (BPNL) lending services are a focus for the Department of Housing and Urban Development (HUD). Credit unions are encouraged to share how these short-term debt obligations may impact consumers’ capacity to manage housing-related expenses, such as rent or mortgage payments.  

A new Regulatory Comment alert from America’s Credit Unions outlines the HUD request for information (RFI) on this topic. Credit union feedback submitted through the alert will help America’s Credit Unions provide a response outlining credit unions’ primary issues and concerns to HUD. 
 
Current Federal Housing Administration (FHA) policies largely exclude BNPL from consideration in underwriting. That’s because closed-end debts do not have to be included if they will be paid off within 10 months from the date of closing and the cumulative payments of all such debts are less than or equal to 5 percent of the borrower's gross monthly income. HUD is considering updating those policies.

The Regulatory Comment alert provides questions to consider and extensive background information on the topic. Comments are due to America’s Credit Unions August 15; comments are due to HUD by August 25.