The Consumer Financial Protection Bureau plans to revoke an interpretive rule bringing some credit card protections to buy now, pay later products, the agency and a fintech trade group that sued to block the rule said in a court filing.
The Financial Technology Association and the CFPB asked Judge Ana C. Reyes for a stay in the litigation while the agency moves to eliminate the rule, according to a joint status report filed Wednesday in the US District Court for the District of Columbia. The CFPB said it would provide its next report on progress toward revoking the rule by June 2 and every 30 days thereafter.
Buy now, pay later providers Block Inc., Klarna Bank AB, PayPal Holdings Inc., and Zip Co. are among the FTA’s members.
“This interpretive rule was deeply flawed, seeking to fundamentally change the regulatory treatment of pay-in-four BNPL products without legislative authority and without a clear and proper understanding of the unique nature of the product,” FTA President and CEO Penny Lee said in a statement.