CFPB Halts Enforcement of BNPL Credit Card Rule, Signals Regulatory Shift

The Consumer Financial Protection Bureau (CFPB) has officially ended enforcement efforts tied to a rule that classified buy now, pay later (BNPL) providers as credit card issuers under the Truth in Lending Act (TILA). The decision marks a significant regulatory rollback and signals a broader shift in the agency’s enforcement priorities.

In a recent statement, the CFPB confirmed that it will no longer pursue actions based on the interpretive rule issued during the previous administration, which subjected BNPL firms to enhanced consumer protection requirements. These included mandatory disclosures, standardized refund protocols, and formal dispute resolution processes, similar to those required of traditional credit card providers.

The bureau clarified that its current enforcement resources will instead be directed toward higher-priority risks to consumers, with a particular focus on supporting servicemembers, veterans, and small business owners. Officials noted that the move is intended to better allocate regulatory efforts toward areas deemed more urgent or impactful.

This announcement follows the CFPB’s earlier indication in April that it was considering rescinding the BNPL interpretive rule altogether. That update came in the context of ongoing litigation brought by a fintech industry group, which challenged the rule’s legality and its application to short-term, interest-free installment products.

A Broader Shift in Regulatory Philosophy

The rollback on BNPL enforcement reflects a broader deregulatory trend under the current administration. Several enforcement actions and rulemaking initiatives launched in prior years have recently been scaled back or abandoned altogether.

Among them was the CFPB’s withdrawal of a high-profile lawsuit against the operator of a major peer-to-peer payment network and several partner banks, which had faced accusations of failing to protect users from fraud. Similarly, a case against a large national bank related to alleged customer misrepresentation around savings account terms — involving reported losses of $2 billion — was also voluntarily dismissed.

These moves illustrate a clear pivot in the agency’s posture, aiming to reduce compliance burdens on fintech firms and financial institutions. However, consumer advocates have expressed concern that this approach may weaken important safeguards and leave users more vulnerable to unfair practices.

While the CFPB has not ruled out future action on BNPL regulation, the decision to cease enforcement of the current rule is likely to be welcomed by industry players who had pushed back on what they viewed as an overextension of consumer credit rules. Whether the bureau will issue a new framework or withdraw the rule entirely remains to be seen.

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