CFPB Announcement Regarding Enforcement Actions Related to Buy Now, Pay Later Loans
AI Analysis
On 2025-05-06, the CFPB announced that it would not prioritize enforcement or supervision based on its 2024 Buy Now, Pay Later interpretive rule, which treated certain BNPL providers as credit card issuers under Regulation Z. The announcement reduced immediate federal enforcement risk but did not repeal the rule, eliminate underlying Truth in Lending Act obligations, or displace state requirements; independent commentary also notes that the CFPB subsequently withdrew the interpretive rule on 2025-05-12.
Key dates
- 2024-05-31
- The CFPB published Use of Digital User Accounts to Access Buy Now, Pay Later Loans at 89 Fed. Reg. 47,068, treating covered BNPL lenders as card issuers under Regulation Z.
- 2025-05-06
- The CFPB announced that it would not prioritize enforcement actions based on the BNPL interpretive rule and was contemplating rescission.
- 2025-05-12
- The CFPB subsequently withdrew the 2024 BNPL interpretive rule as part of its withdrawal of guidance documents.
Suggested considerations
- Compliance teams may wish to document the distinction between the CFPB's enforcement-priority statement and a formal repeal, noting that the announcement itself did not provide a safe harbor from the Truth in Lending Act, Regulation Z, UDAAP, Fair Credit Reporting Act, or applicable state law.
- BNPL providers should consider preserving existing Regulation Z implementation records, including disclosures, account statements, dispute and error-resolution procedures, refund processes, complaint files, and change-management documentation, because the CFPB's announcement did not authorize retrospective noncompliance and future policy could change.
- Firms may wish to verify the current status of the 2024 interpretive rule and monitor CFPB Federal Register notices, supervisory publications, litigation developments, and any replacement rule or guidance.
- Product and legal teams should consider reassessing whether each BNPL product is subject to Regulation Z based on its structure and applicable statutory provisions, rather than relying solely on the withdrawn interpretive rule.
- Compliance teams may wish to continue testing disclosures, payment schedules, fees, refund handling, billing-error response, complaint management, and marketing for compliance with remaining federal and state requirements.
- Multi-state providers should consider separately reviewing state licensing, rate, fee, disclosure, dispute-resolution, privacy, and unfair-practices requirements; independent commentary specifically identified New York legislation imposing BNPL licensing and supervision requirements, a 16 percent interest cap, fee restrictions, and additional consumer safeguards.
- Firms may wish to maintain contingency plans that allow rapid restoration or modification of credit-card-style Regulation Z controls if federal enforcement priorities or the legal status of BNPL products changes.
What changed
The CFPB stated that enforcement actions based on Use of Digital User Accounts to Access Buy Now, Pay Later Loans, 89 Fed. Reg. 47,068 (May 31, 2024), would not be a priority. The Bureau said it would redirect enforcement and supervision resources toward pressing consumer threats, particularly those involving servicemembers, veterans, taxpayers, and small businesses. The Bureau also said it was contemplating appropriate action to rescind the interpretive rule; subsequent CFPB materials identified the rule as withdrawn on 2025-05-12. The announcement did not amend the Truth in Lending Act, Regulation Z generally, other federal consumer-protection laws, or state BNPL requirements. The 2024 interpretation had treated BNPL lenders as card issuers for purposes of Regulation Z Subpart B, includi
Compliance impact
The immediate effect was a reduction in stated CFPB enforcement and supervisory priority, not a statutory exemption or affirmative permission to discontinue consumer-protection controls. Independent law-firm, consultancy, and industry commentary characterized the change as regulatory relief but cautioned that underlying TILA obligations, state laws, other federal consumer laws, and potential futur
Who is affected
Related regulations
References
AI-generated analysis. May contain errors or omissions — verify with the original CFPB source before acting. Full disclaimer.
What the CFPB said
The CFPB is announcing that it will not prioritize enforcement actions taken on the basis of the Truth in Lending (Regulation Z); Use of Digital User Accounts to Access Buy Now, Pay Later Loans, 89 Fed. Reg. 47,068 (May 31, 2024) (“Buy Now, Pay Later”).
Published by CFPB . Read the full notice at the source for the authoritative text.