Washington, D.C. – The US Consumer Financial Protection Bureau’s (CFPB) new rule on buy now, pay later (BNPL) lenders has elicited varied responses from industry players. Affirm has embraced the ruling, while rival Klarna has deemed it “baffling.”
The CFPB’s interpretive ruling, published yesterday, mandates that BNPL lenders adhere to the same regulations as credit cards. This includes providing consumers with key legal protections and rights, such as the ability to dispute charges and request refunds from the lender after returning a product purchased via a BNPL loan.
Affirm expressed support for the decision, stating, “We are encouraged that the CFPB is promoting consistent industry standards, many of which already reflect how Affirm operates, to provide greater choice and transparency for consumers.”
On the other hand, Klarna, while welcoming “proportionate” regulation and noting that the new rule does not necessitate significant changes to its business model, criticized the approach. “Trying to regulate BNPL like a credit card is like comparing apples with oranges. So today’s announcement is confusing,” the Swedish firm remarked.
Klarna emphasized that other countries, such as the UK and Australia, have acknowledged the “fundamental differences” between BNPL and credit cards. A company statement reads, “It is our hope that the CFPB will recognize the major differences between BNPL and credit cards, as they operate in fundamentally different ways.”