BPI and CBA urge Consumer Financial Protection Bureau to abide by the APA
Washington, D.C. — The Bank Policy Institute and the Consumer Bankers Association called on the CFPB to abide by the Administrative Procedure Act in seeking to regulate buy-now-pay-later providers in a letter sent today to the Bureau. The associations argue that the CFPB’s recently issued “interpretive rule” violates the Administrative Procedure Act due to its substantive nature. While the associations support much of the substance of the interpretation, the CFPB should rescind the interpretation, adhere to the law and submit a formal rule through the rulemaking process, with the opportunity for the public to provide comments.
“If the CFPB is responsible for enforcing the law, it should also be responsible for following it,” the associations stated upon filing the letter. “We share the same goal as the CFPB: consumers who elect to use BNPL must be protected. A rulemaking process will help lead to a more informed rule that will ultimately help the CFPB best protect consumers.”
As the CFPB reconsiders a rulemaking in compliance with the APA, it should do so with the following recommendations in mind:
- Hold all BNPL issuers to the same standards.
- Help better define and differentiate BNPL products and users from other credit products already covered by consumer protection laws.
- Supervise the activities of nonbank BNPL providers under the CFPB’s larger participant rulemaking authority.
The CFPB announced its interpretive rule on May 22, 2024 as a continuation of efforts that the Bureau initiated in 2021. The interpretive rule establishes new requirements for BNPL issuers based on requirements under the Truth in Lending Act. These include what to do when a customer requests a refund, how to investigate transaction disputes and how consumers can access their billing statements, among others.
To access a copy of the letter, please click here.
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About Bank Policy Institute.
The Bank Policy Institute is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks and the major foreign banks doing business in the United States. The Institute produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.
Media Contacts
- Sean Oblack, Bank Policy Institute, sean.oblack@bpi.com
- Billy Rielly, Consumer Bankers Association, brielly@consumerbankers.com
