Shares of companies offering "Buy now, Pay later" (BNPL) point-of-sale loans are trading lower Thursday after the Consumer Financial Protection Bureau (CFPB) issued rules aimed at providing protections for consumers.
The Details:
The CFPB issued an interpretive rule that states BNPL lenders are effectively credit card providers and must provide consumers with many of the same basic protections.
The new consumer protection include the following requirements for providers of BNPL loans:
- Providers must investigate disputes initiated by consumers and pause payment requirements during the investigation
- Refund charges for returned products or canceled services to consumers' accounts
- Provide consumers with periodic billing statements
Shares of companies offering the BNPL loans including Paypal Holdings, Inc. (NASDAQ:PYPL), Affirm Holdings, Inc. (NASDAQ:AFRM) and Block, Inc. (NYSE:SQ) are trading lower following the announcement of the new regulations which become effective in 60 days.
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PYPL, AFRM, SQ Price Action: According to Benzinga Pro, Paypal shares are down 0.8% at $61.69, Affirm shares are down 3.68% at $29.48 and Block shares are down 1.59% at $66.27 at the time of publication Thursday.
Image: Mohamed Hassan from Pixabay