CFPB Report: BNPL Products Popular with Subprime Borrowers

A Consumer Financial Protection Bureau (CFPB) report found that buy-now-pay-later (BNPL) borrowers often have lower credit scores and higher balances on other credit lines. This follows the agency’s 2023 report that found that BNPL users were more likely to rely on riskier financing options. In May 2024, the CFPB issued an interpretive rule that defined BNPL lenders as credit card providers, meaning that they are required to provide certain legal protections to their consumers. According to American Banker, the new CFPB director will likely not act on this rule.

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