The US CFPB is targeting buy now, pay later loans with consumer protection rules. These policies are similar to what credit card firms are already complying with. The Consumer Financial Protection Bureau confirmed this on Wednesday, May 22. 

CFPB Targets Buy Now, Pay Later Loans With Consumer Protection Policies

The US Consumer Financial Protection Bureau confirmed that it issued an interpretive rule on buy now, pay later lenders or BNPLs. CFPB Director Rohit Chopra explained why they implemented consumer protection rules on BNPLs.

"When consumers check out and choose Buy Now, Pay Later, they don't know if they will get a refund if they return their product or whether the lender will help them if they didn't get what was promised," he said via CFPB's official press release.

Chopra explained that consumers who use BNPL or credit cards are still entitled to essential consumer protection measures under longstanding regulations and laws.

Read Also: US Credit Card Debt Is Rising, With Borrowers Owing an Average of Over $6,000

Buy Now, Pay Later Consumer Protection Rules Similar To Credit Cards

According to The Guardian's latest report, the consumer protection policies implemented on buy now, pay later loans are similar to those that credit card companies already comply with.

This means BNPLs will now be required to refund products, investigate customer disputes, and provide periodic billing statements. CFPB officials said that many buy-now and pay-later firms voluntarily comply with credit card consumer protection policies.

However, they want consistency in the rising buy now, pay later sector. Some credit card consumer protection rules, such as assessing consumers' repayability, do not apply to BNPLs.

Related Article: Minnesota's 'Pay Now, Save Later' Electronics Recycling Bill Stalls in Senate