American Fintech Council (AFC) sent a comment letter. Oregon Department of Consumer and Business Services (DCBS), Financial Regulation DivisionIt calls for “more specific” regulatory treatment of buy now pay later (BNPL) providers.
Currently, Oregon plans to treat these platforms like payday lending services.
Oregon’s approach also underscores the challenge for financial services companies to address not just federal rules but also individual states, a methodology that could make costs higher for businesses and consumers.
Some payday loan providers are notorious for charging borrowers exorbitantly high fees, while some BNPL providers boast lower rates for consumers in need of loans.
The AFC explains that “applying regulations designed for high-cost cash advance loans may increase regulatory uncertainty and fail to reflect the diverse nature of the products.”
Phil GoldfederAFC CEO says:
“Responsible BNPL providers offer important financial options to safely and affordably meet consumers’ evolving financial needs. Oregonians deserve access to these essential tools. It provides a critical alternative to traditional forms of credit by offering payment options over time, clear terms, predictable repayment schedules, and greater financial flexibility. Oregon policymakers have the opportunity to create a balanced regulatory approach that allows consumers to continue to benefit from these important financial products.”
AFC also requests that Oregon reconsider its interpretation of the purchase money credit exclusion and pursue significant changes to the BNPL regulation through a formal rulemaking process. The AFC says the current pathway will increase uncertainty for consumers.
Ian Moloney, The AFC’s Chief Policy Officer says the process of regulating BNPL should include a review of existing legislation as well as recognition of the unique nature of BNPL.
