WASHINGTON—The rapidly growing buy now, pay later (BNPL) solutions in the market must be subjected to greater regulatory oversight, NAFCU stated in a letter to the House Financial Services Committee Task Force on Financial Technology. The letter was sent ahead of a hearing held by the committee on BNPL offerings that are being driven primarily by fintechs and which allow consumers to spread out payments on purchases.
In the letter, NAFCU Vice President of Legislative Affairs Brad Thaler reiterated the trade association’s concern that fintechs and regulated financial institutions “must compete on a level playing field” when it comes to financial services. Thaler also outlined NAFCU’s opposition to legislation to regulate overdraft protection programs that was noticed for the hearing.
“While the buy now, pay later trend is worthy of investigation, we do not think that H.R. 4277, the Overdraft Protection Act of 2021, is the right vehicle to address these concerns,” wrote Thaler. “This legislation would have a negative impact on a number of courtesy pay programs put in place by credit unions to serve their members – programs that the members affirmatively opt-in to. Enacting this legislation would create consumer confusion and have a negative impact on community institutions who design these programs to meet the needs of their members.”
In the letter, Thaler further told Congress credit unions already have alternatives and mechanisms in place to deal with abuse of pay programs and will often provide relief for members if concerns are raised.
“As such, we would encourage you to consider other solutions to the risks posed by buy now, pay later than H.R.4277, and we are opposed to this legislation…,” concluded Thaler.