In a letter to the CFPB sent Thursday, America’s Credit Unions strongly objected to the use of an interpretive rule rather than a proposed rulemaking with a standard notice and comment period.
America’s Credit Unions Senior Regulatory Affairs Counsel James Akin noted that while the organization supports the bureau’s efforts to bring regulatory consistency to buy now, pay later (BNPL) lending and provide much needed consumer protections to a largely unregulated market, the CFPB should reissue its interpretive rule addressing applicability of subpart B of Regulation Z to lenders that issue digital user accounts used to access credit.
“Expansive and novel interpretations with broad implications such as those found in the rule require transparency and stakeholder feedback,” wrote Akin.
In addition, he flagged that BNPL products would benefit from additional protections not covered in the interpretive rule, such as ability-to-repay requirements and data protections.
America’s Credit Unions broke down the interpretive rule via a regulatory comment alert and solicited member feedback to inform the comment letter. The organization will continue to engage the bureau to ensure credit union concerns are voiced.
