On December 16, 2021, the Consumer Financial Protection Bureau (CFPB) issued orders to five (5) “Buy Now, Pay Later” (BNPL) companies, including Affirm, Afterpay, Klarna, PayPal, and Zip, concerning their BNPL products. BNPL is a type of short-term financing that allows consumers to make purchases and pay for them at a future date over a series of installments. BNPL products have become increasingly popular due to the COVID-19 pandemic and are expected to set new records this holiday season. The CFPB is opening an inquiry into BNPL credit due to concerns over “accumulating debt, regulations arbitrage, and data harvesting” involving the consumer credit market. Specifically, the CFPB is asking these companies to submit information so that the CFPB can report to the public on BNPL industry practices and risks.

CFPB Announcement Link
CFPB Sample Order Link