On March 14, 2024, Collector Magazine quoted Max Bonici on regulators’ reactions to a surge in Buy Now, Pay Later (BNPL) products. According to the article, reports show that younger generations increasingly use BNPL products for everyday purchases.
Although no federal rules on the lending tool have been passed yet, the recent flurry of activity has captured the attention of numerous financial services companies and regulators. Bonici explained that “This activity, as well as the BNPL guidance recently released by the OCC, puts BNPL lenders on notice that regulators intend to address any perceived risks.”
“Following the bank failures last year, supervision in general—including for BNPL—has been cranked up quite a bit,” Bonici added. “Federal banking agencies like the OCC are going through bank balance sheets, and looking at what they do and how they do it with a very fine-tooth comb to find any risk that isn’t sufficiently addressed or is excessive.”
Bonici told Collector Magazine that he expects to see more scrutiny of BNPL in the coming years. He also said that lenders might see some of these concerns impact their contracts: “Contracts might be a little more detailed and there will be a little more attention paid to practices.”
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