Democratic AGs To Check Out Buy-Now-Pay-Later Companies

• Seven Democratic AGs, co-led by North Carolina AG Jeff Jackson, sent letters to the six largest Buy-Now-Pay-Later (BNPL) providers seeking information about their lending practices and whether they are complying with state consumer protection laws.
• In their letters, the AGs note that point-of-sale financing has become increasingly common in online shopping. They raise concerns that BNPL companies may not be providing consumers with the protections required for other credit products under federal and state law, especially after the CFPB's withdrawal of a rule that would have extended to BNPL borrowers credit-card-style rights and recourse. The AGs also question whether BNPL lenders are adequately assessing borrowers' capacity to repay their loans, which risks exposing consumers to unmanageable debt.
• To better understand the BNPL industry, its impact on consumers, and whether providers may be violating consumer protection laws, the AGs request detailed information about BNPL products offered between January 2023 and the present, including disclosure policies, repayment terms, and procedures for handling disputes.
• We have previously covered CFPB scrutiny of the BNPL industry, including a prior multistate AG letter asking the CFPB to consider specific aspects of the industry.

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