Credit unions: Submit feedback on the CFPB’s interpretive rule on BNPL

Credit unions are encouraged to submit feedback to America’s Credit Unions on usage of digital user accounts to access buy now, pay later (BNPL) loans in response to the bureau’s interpretive rule to address applicability of subpart B of Regulation Z to lenders that issue digital user accounts used to access credit. 

America’s Credit Unions outlined the interpretive rule via a regulatory comment alert sent to members Tuesday.  

In the email alert, America’s Credit Unions detailed the impact the proposal would have on credit unions and outlined several key points for consideration, including:  

  • The CFPB has determined that lenders issuing digital user accounts to access BNPL products are “card issuers” under Reg Z because such digital user accounts are “credit cards”;  
  • While variations of the product exist, for this interpretive rule, BNPL refers to a consumer loan for a retail transaction that is repaid in four (or fewer) interest-free installments and does not otherwise impost a finance charge;  
  • The CFPB has also determined that BNPL lenders are “creditors” subject to the requirements of subpart B of Reg Z, such as consumer disclosures, billing error resolution procedures and refund rights, and periodic statements; and  
  • The CFPB states that while the interpretive rule is not subject to the Administrative Procedure Act, the bureau is nevertheless accepting public comments on the proposed rule and “may” make revisions at a later time “as appropriate in light of feedback received.”  

View the alert. Credit unions are encouraged to submit comments to America’s Credit Unions by July 18; comments are due to the CFPB Aug. 1. 

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