14% of People Used Buy-now-pay-later Loans in 2021, New Research Says

  • Buy-now-pay-later loans will be regulated like credit cards under new Biden rule.
  • 14% of people used buy-now-pay-later loans in 2021, with disputed or returned purchases.
  • Consumers to receive disclosures on fees and protections for billing disputes and refunds.
  • Buy-now-pay-later lenders need to investigate disputed purchases and refund money.

The Consumer Financial Protection Bureau (CFPB) has announced that buy-now-pay-later lenders will be treated as credit-card providers, requiring them to investigate disputed purchases and refund money on returned products and canceled services. This means consumers should receive disclosures on fees, pricing structures, and rights and protections for billing disputes and refunds. The rules take effect 60 days after being published in the federal government’s compendium of regulations and notices. Buy-now-pay-later lenders typically split a purchase’s price into four interest-free installments, with interest and late fees applying if repayment is delayed. Last year, 14% of people used these platforms, according to Fed research.

Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about the Consumer Financial Protection Bureau’s announcement regarding buy-now-pay-later loans. It explains the new protections for consumers, the impact on lenders, and includes relevant statistics and quotes from industry experts. The article also presents both sides of the issue by mentioning the concerns of some lenders while acknowledging their current practices.
Noise Level: 6
Noise Justification: The article provides relevant information about the Consumer Financial Protection Bureau’s decision to treat buy-now-pay-later lenders as credit-card providers, which will result in stronger protections for consumers. However, it contains some repetitive information and could benefit from more in-depth analysis of the implications of this decision on the industry and consumers.
Public Companies: Affirm (AFRM)
Private Companies: Klarna
Key People: Rohit Chopra (CFPB Director), Adam Rust (Director of Financial Services at the Consumer Federation of America)

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Financial Relevance: Yes
Financial Markets Impacted: Buy-now-pay-later lenders
Financial Rating Justification: The article discusses the Consumer Financial Protection Bureau’s announcement to treat buy-now-pay-later lenders as credit-card providers, which impacts financial markets and companies in the buy-now-pay-later industry. It also mentions the growing popularity of these loans and their impact on consumer finance.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: ·

Reported publicly: www.marketwatch.com