Buy Now, Pay Later Apps Like Affirm and Afterpay Just Under Federal Oversight Investigation | Personal finance


“While companies and developers argue that these products can be beneficial because they offer flexibility and a cheaper alternative to credit cards,” said task force chairman Stephen F. Lynch (D-Mass.), during the hearing, “consumer advocates and research groups voiced concerns about the risk that consumers would take on too much and unsustainable debt, noting that most buy it now businesses do not ‘do not assess repayment capacity.

The House investigation also included other fintech companies that offer payday cash advances and credit-like products.

“Regardless of their style, products that provide finance or money today and are repaid later are credit,” Associate Director Lauren Saunders of the National Consumer Law Center said at the hearing. “Shiny fintech outfits don’t remove consumers’ need for basic protections. “

Money contacted the five companies mentioned in the CFPB announcement. Affirm, Afterpay and Zip all say they welcome the agency’s investigation, underscoring their own dedication to the financial well-being of consumers. And PayPal says it is cooperating with the CFPB.

“Our clients trust us to be transparent and we take this responsibility very seriously. PayPal is reviewing the letter and we will continue to work productively with CFPB to provide the requested information, ”a PayPal spokesperson said in a statement.

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