The decision was disclosed in a court filing related to ongoing litigation between the agency and a fintech-focused trade group, which had contested the rule’s implementation process and its applicability to short-term, interest-free BNPL loans.
The interpretive rule was introduced under the previous CFPB leadership and aimed to extend consumer protections traditionally associated with credit cards, such as dispute resolution rights and refund entitlements, to BNPL products. The legal challenge led both parties to jointly request a stay in the case while the rule is formally withdrawn.
The CFPB’s decision aligns with a wider regulatory rollback initiated under the current administration. Since taking office, the agency has scaled back several enforcement and rulemaking efforts that were introduced under the previous administration. This policy shift reflects a more restrained approach to financial sector oversight.
The withdrawal of the BNPL interpretive rule is expected to reduce federal regulatory scrutiny of the sector, a change welcomed by BNPL providers. However, according to Consumerfinanceandfintechblog, it may lead to heightened attention from state regulators and consumer advocacy groups, who have raised concerns about gaps in consumer protections. As a result, industry participants may need to navigate a fragmented regulatory landscape in the coming months.
In March 2025, the CFPB withdrew its lawsuit against Early Warning Services (EWS), the operator of the Zelle payment network, and several large banks. The lawsuit, originally filed in 2024, accused the companies of failing to address widespread fraud on the platform. This decision was part of an effort by the current administration to scale back litigation initiated under its predecessor.
At the time, officials from EWS defended the company’s handling of fraud cases, stating that the lawsuit lacked merit and was based on flawed legal and factual premises. In an emailed statement, representatives from the Consumer Bankers Association maintained that banks had adhered to legal requirements in their operation of Zelle.
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