Requiring “buy now, pay later” digital user accounts to comply with the billing error resolution process in Regulation Z could provide community banks relief, ICBA told the Consumer Financial Protection Bureau.
Details: In a comment letter, ICBA called on the CFPB to ensure BNPL products adhere to the same consumer error-resolution procedures as banks. ICBA said it supports the CFPB position that BNPL digital user accounts are credit products and should comply with relevant sections of Regulation Z, including credit disclosures and billing disputes.
Background: BNPL products operate in a space where a consumer’s main avenue of error resolution is through their community bank, and debit and credit card disputes and chargebacks are at record levels.
Previous ICBA Comments: ICBA has consistently called for greater parity between nonbank BNPL providers and more traditional credit products. In a 2022 comment letter, ICBA called on the CFPB to incorporate BNPL products into a regulated ecosystem and provide for consumer disclosures and protections on par with the Truth in Lending Act.
