Buy-Now, Pay-Later Faces Tougher Rules as CFPB Chief Weighs In

The US Consumer Financial Protection Bureau released a sweeping report warning that the burgeoning "buy now, pay later" industry needs fresh regulation to address industry practices. From a report: CFPB Director Rohit Chopra said he's ordered staff to identify surveillance policies in the industry that need to be curtailed, including the collection of consumers' purchase and demographic data for targeted ads. Buy-now, pay-later providers will also have to undergo supervisory examinations similar to those applied to credit-card companies. "It might involve some new rules, some new guidance -- and more to come on that," Chopra said in an interview on Bloomberg Television's "Balance of Power With David Westin" after the report was released, adding that he asked CFPB staff to come up with a range of options to make sure there is fair competition between buy-now, pay-later firms and the credit-card companies. "We want to make sure to take steps to prevent harm before it spreads." The proposals would mark the most extensive regulations yet to hit the sector, which has exploded in popularity in recent years by offering consumers ways to split purchases into smaller installments, often without charging interest. Instead, providers make most of their money by charging merchants a fee each time a consumer uses the product at checkout.

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