Yesterday, the Consumer Financial Protection Bureau (CFPB or Bureau) announced a significant shift in its enforcement priorities, choosing not to prioritize actions related to Buy Now, Pay Later (BNPL) loans under the Truth in Lending (Regulation Z). This decision aligns with the CFPB’s broader strategic adjustments outlined last month, and discussed here, which emphasize focusing resources on more pressing consumer threats, particularly those affecting servicemen, veterans, and small businesses.
Key Points from the Announcement
- Deprioritization of BNPL Enforcement: The CFPB will not prioritize enforcement actions based on the regulation governing BNPL loans. This move reflects a strategic decision to allocate resources towards more urgent consumer protection issues.
- Focus on Servicemen and Veterans: The Bureau is redirecting its efforts to support servicemen, veterans, and small businesses, ensuring that its enforcement and supervision resources are concentrated on these groups.
- Potential Rescission of BNPL Regulation: The CFPB is contemplating rescinding the BNPL regulation, indicating a potential regulatory rollback in this area.
Connection to CFPB’s 2025 Priorities
This announcement ties into the CFPB’s revised supervision and enforcement priorities for 2025. The Bureau’s new focus includes:
- Reduction in Supervisory Exams: A 50% decrease in supervisory exams to lower business costs and consumer prices.
- Shift Back to Depository Institutions: Renewed focus on banks and depository institutions, aiming to return to the supervision proportions of 2012.
- Emphasis on Actual Fraud: Prioritizing cases with identifiable victims and measurable damages, particularly in mortgages, data furnishing violations, and consumer contracts.
- Support for Service Members and Veterans: Enhanced focus on providing redress to these groups.
- Avoidance of Novel Legal Theories: Concentrating on areas clearly within statutory authority, avoiding supervision under novel legal theories.