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Consumer Watchdog Plans to Regulate BNPL Lenders Similar to Credit Card Companies


The U.S. Consumer Financial Protection Bureau plans to subject “buy now, pay later” lenders to the same vigorous oversight as credit card companies, saying the short-term financing industry harvests consumer data in ways that threatens consumer privacy.

Considered a substitute for traditional credit cards, the buy now, pay later model allows consumers to pay off a loan in a few installments, most commonly four interest-free increments. The service, provided by a host of firms such as Klarna and Afterpay, increased in popularity during the pandemic.

The consumer watchdog, which doesn’t currently regulate the industry, plans to issue guidance to oversee the lenders and subject them to supervisory exams, CFPB officials said.