CFPB ceases enforcement of BNPL regulation

In an official statement, the CFPB underlined its plans not to prioritise implementation actions taken on the basis of the Truth in Lending (Regulation Z). The regulation, created during Joe Biden’s presidential term, classified BNPL providers as credit card issuers subject to the aforementioned act. Fintech companies had been required to comply with more rigorous consumer protections, such as standardised disclosures, refund processing, and formal dispute investigations.

Now, the bureau is set to maintain enforcement and supervision resources centred on persistent threats to consumers, especially servicemen and veterans. Additionally, the CFPB mentioned that it took these measures to direct more resources to assisting US taxpayers, servicemen, veterans, and small businesses across the region. At the time of writing, the bureau was considering taking appropriate action to revoke BNPL.

The news comes just a month after the CFPB initially announced its intention to rescind its interpretive rule that classified BNPL products under the same regulations as credit cards. At that time, the decision was disclosed in a court filing related to ongoing litigation between the bureau and a fintech-focused trade group, which contested the rule’s implementation process and its applicability to short-term interest-free BNPL loans.

The CFPB under the Trump Administration

The bureau’s decision regarding BNPL providers falls in line with a wider regulatory shift initiated under the current administration. In recent months, the CFPB phased down several enforcement and rulemaking actions that were rolled out under the prior administration, with the policy shift underlining a more restricted approach to financial sector supervision.

For example, the bureau dropped its lawsuit against Early Warning Services (EWS), the operator of the Zelle payment network, and several large banks. Filed in 2024, the lawsuit accused the involved companies of failing to address fraud on the platform. The decision to withdraw it came as part of an effort by the current administration to diminish litigation started under its predecessor. Also, the CFPB dismissed a lawsuit filed in January 2025 against Capital One, which reported that the bank misled customers about savings account options, which led to financial losses of USD 2 billion. The agency planned to voluntarily drop the case with prejudice, meaning it could not be refiled.

As underlined in one of our recent articles, by relaxing these regulations, the administration intends to minimise compliance costs for fintech companies. However, this shift can lead to concerns among consumer advocates regarding the potential drop in consumer protections.