On January 9, 2024, Payments Dive published a Q&A with Max Bonici about the buy now, pay later (BNPL) guidance that the Office of the Comptroller of the Currency (OCC) issued last month to national banks and federal savings associations. According to the article, the agency’s guidance approached the issue from both bank and consumer perspectives, noting the growing BNPL market. Bonici said some of the OCC’s guidance “may be aspirational.”
“Because this is an evolving industry, there may not actually be legal certainty about every one of these issues that are raised,” he said. “Still, I think it’s fair that the OCC is saying to banks, make sure people can repay these things, that you’re not sitting on bad assets.”
Bonici said the guidance confirms that the BNPL trend is a growing part of the marketplace. “In the absence of other clarifying guidance, I would expect other banks that are not OCC-regulated and -supervised to still take notice of this and use it for what it is, for informative general principles, to inform their own approaches, because these are legitimate issues that have been raised,” he explained.
Banks, Bonici continued, “are going to increasingly scrutinize partner relationships and operations to make sure that there aren’t legal violations and ultimately risk to the bank through those... The guidance will have a trickle-down effect.”
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