Buy now, pay later stocks sink as CFPB seeks new protections

Buy now, pay later (BNPL) stocks (AFRM, PYPL, SQ) are trading lower today after the Consumer Financial Protection Bureau proposed a new rule that would force lenders to adhere to the same consumer protections as credit cards.

Yahoo Finance’s Julie Hyman and Josh Lipton report more on the story and how these proposed rules could impact BNPL stocks in the future.

Read more about the BNPL here.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination.

This post was written by Melanie Riehl

Video Transcript

Finally, we’re taking a look at some buy now.

Pay later.

Stocks a firm PayPal block.

They’re all lower today after the Consumer Financial Protection Bureau proposed a new rule that would force the lenders to adhere to the same consumer protections as credit cards.

So it was sort of an interpretation of existing rules and laws that would create more parallels between credit card companies and some of these companies.

In other words, you know that they would have to, I don’t know, adhere to some more stringent standards.

Although a credit card company has to assess a borrower’s ability to repay, they’re not suggesting that the B NPL companies will have to do that.

It’s interesting.

It’s not surprising.

Maybe Juliette, You see regulators at least kicking the tyres more and more because B NPL has grown.

So I mean, just it.

Just as an industry saw this big jump and usage as E commerce just exploded during the pandemic and now others have jumped in.

I mean, how many big banks even offering these, you know, pay overtime products.

So maybe not too surprised to see you know Washington, at least taking harder looks and in firm for its part, said uh in an email to Yahoo Finance that they’ve already disclosed that the CFP B already oversees some parts of their business and they’re gonna continue to work with them, so we’ll see how it ends up affecting them.