CNN
Regulators in Washington may crack down on the industry behind “buy now, pay later,” the increasingly popular method for consumers to purchase things online.
The Consumer Financial Protection Bureau said Thursday that it is looking to “collect information on the risks and benefits of these fast-growing loans” from five leading BNPL companies: Affirm; Australia’s Afterpay, which is getting bought by Square owner Block; PayPal; privately held Swedish fintech Klarna; and Zip, another BNPL firm headquartered in Australia.
Shares of Affirm, which went public in January, plunged more than 10% following the CFPB news. Block (SQ) shares fell about 5%, but that drop may also have something to do with a lawsuit filed against it by tax preparer H&R Block (HRB). PayPal (PYPL) was down slightly.
“Buy now, pay later is the new version of the old layaway plan, but with modern, faster twists where the consumer gets the product immediately but gets the debt immediately too,” said CFPB Director Rohit Chopra in a statement Thursday.