Federal regulators are moving closer to finalizing rules that would subject buy now, pay later services to the same consumer protection standards as traditional credit products. The regulatory push comes as missed payment rates on BNPL transactions have risen to approximately 12%, up from 8% a year ago.
The proposed rules would require BNPL providers to assess borrowers' ability to repay, provide standardized disclosures about total costs, and report payment activity to credit bureaus. Currently, most BNPL transactions exist outside the traditional credit reporting system, creating blind spots for lenders evaluating borrowers' total debt obligations.
BNPL companies argue that heavy-handed regulation could eliminate the convenience and accessibility that makes their products popular. Consumer groups counter that the lack of oversight has enabled irresponsible lending that disproportionately harms financially vulnerable consumers who use multiple BNPL services simultaneously.
