ABA Statement for the Record: "Buy Now, Pay More Later? Investigating Risks and Benefits of BNPL and Other Emerging Fintech Cash Flow Products."

The American Bankers Association (ABA) appreciates the opportunity to submit a statement for the record for the hearing titled “Buy Now, Pay More Later? Investigating Risks and Benefits of BNPL and Other Emerging Fintech Cash Flow Products.”

Today’s topic is an important and timely one, given that the surge of Buy Now Pay Later (BNPL) products that has been documented abroad appears to have reached the United States. While innovation in the point‐of‐sale credit space is important, it is imperative that consumers be protected and that underappreciated risks not be introduced into the payments and credit systems. Regulators in both the United Kingdom and the European Union are working toward implementing BNPL regulations intended to mitigate the potential for consumer confusion and inadvertent indebtedness.

We do not endorse directly transposing these jurisdictions’ solutions into the unique regulatory landscape of the United States. Nonetheless, the concerns raised by other governments may be a harbinger of ones to be addressed in this country. Choosing to use BNPL is a serious financial decision, and BNPL is not a riskless product. Today, BNPL offerings from banks provide the most legal protections for consumers, and we urge the Task Force to examine whether there is a need for nonbank BNPL providers to be subject to the same level of oversight. ABA favors a credit and payments marketplace that is transparent and fair.

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