American Fintech Council Asks Oregon To Reconsider Proposed Rules For Buy Now, Pay Later (BNPL) Providers
The American Fintech Council (AFC) has sent a comment letter to the Oregon Department of Consumer and Business Services (DCBS), Division of Financial Regulation, asking for a “more tailored” regulatory treatment of buy now, pay later (BNPL) providers.
Currently, Oregon intends to treat these platforms like payday lending services.
Oregon’s approach also highlights the challenges for financial services firms that must cater not just to federal rules but to each individual state, a methodology that can drive costs higher for businesses and consumers.
Some payday lending providers have a poor reputation for charging excessively high fees to borrowers, while some BNPL providers boast about lower rates for consumers in need of credit.
AFC explains that “applying regulations designed for high-cost payday lending could increase regulatory uncertainty, and fail to reflect the products’ distinct structure.”
Phil Goldfeder, CEO of the AFC, states:
“Responsible BNPL providers offer important financial options to safely and affordably meet the evolving financial needs of consumers. Oregonians deserve access to those essential tools. Pay-over-time options provide a critical alternative to traditional forms of credit by offering clear terms, predictable repayment schedules, and greater financial flexibility. Oregon policymakers have an opportunity to establish a balanced regulatory approach that allows consumers to continue benefitting from these important financial products.”
AFC also asks that Oregon reconsider its interpretation of the purchase money loan exclusion and pursue any significant changes to BNPL regulation through a formal rulemaking process. The current path would increase uncertainty for consumers, says the AFC.
Ian Moloney, Chief Policy Officer of the AFC, says the process for regulating BNPL should involve a review of existing statutes, along with recognition of BNPL’s unique structure.
