The CFPB is facing up on the theme of the BNPL

The election of the new US President has decidedly many consequences, more or less expected, on many markets. The BNPL is no exception to the rule. While the activity, particularly criticized for its impact on over-indebtedness, saw US regulation tighten in recent years, the CFPB has finally gone back on the theme.

FACTS

• The Office of Consumer Financial Protection (CFPB) recently announced that "it will not give priority to enforcement measures under Regulation Z (Truth in Lending)" assimilating the BNPL to credit card issuance activities and thereby giving it similar obligations.

• In these terms, the Bureau justifies, in a short statement, its decision to turn away from its original ambition to strengthen regulation around deferred and split payment activities in the US.

• The rationale is for refocusing the activities of the Commission on the oversight of threats to members, veterans and small businesses facing financial frailties.

• The regulation on BNPL's activities could thus be simply repealed.

ISSUES

• Follow current policy This shift is a direct result of the evolution of the American political situation, marked by the election of President Trump. However, the previous regulatory advances concerning the BNPL were brought by the Biden administration, on which the new president is precisely seeking to return point by point, and for all subjects.

• Unlocking a Market : This decision more generally illustrates the policy now being applied across the Atlantic to deregulate the US financial market. The BNPL is not the only one concerned since the Trump administration has also recently chosen to put an end to certain banking merger rules, strengthening the freedom of action of the actors involved, despite the potential risks. The environmental and societal issues have also been abandoned.

PERSPECTIVE

• Current regulatory developments on the U.S. market are in contradiction with those currently taking place in Europe, particularly on the theme of the BNPL.

• Actors like Klarna will not be mistaken. The Swedish giant now counts both in the US and in its first market and has recently multiplied its actions to establish itself as a local benchmark and to continue its activities in a more permissive environment. He Signed for example, an exclusive partnership with Walmart customers last March.

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