‘Buy-now, pay-later’ firms under U.S. regulator’s scanner
The HinduThe U.S. Consumer Financial Protection Bureau plans to start regulating “buy-now, pay-later” companies like Klarna and Affirm Holdings due to worries their fast-growing financing products are harming consumers, the agency said on Thursday. In particular, the CFPB said because BNPL providers do not give data to credit reporting agencies, lenders might have an incomplete picture of a borrower's liabilities, including BNPL loans at rival companies. The agency also pointed to customer data collection as a consumer risk and said it would start identifying data surveillance practices BNPL companies should avoid. "Today represents a big step forward for consumers and honest finance, and we are encouraged by the CFPB’s conclusions following their review," the spokesperson said, noting that the CFPB's report acknowledged that BNPL imposes significantly lower costs on consumers compared with traditional credit products.
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