“The bulletin released by the Office of the Comptroller of the Currency (OCC) provides vital clarity for banks and fintech companies offering responsible Buy Now Pay Later (BNPL) products. The bulletin recognizes the benefits that responsible BNPL providers offer consumers in need but more importantly helps identify the risks, roles, and responsibilities to keep innovative banks competitive without compromising on consumer safety. This bulletin should help mitigate information asymmetries and provides clear expectations for innovative fintech companies and banks as it relates to ensuring their risk management processes meet OCC’s expectations.

The American Fintech Council’s (AFC) mission is to promote an innovative, transparent, inclusive, and customer-centric financial system by supporting responsible growth and innovation in fintech. The AFC has adopted specific policy standards for the provision of BNPL products, including classifying products as loans, ensuring transparent terms, underwriting every transaction at the point of sale, providing consumers all disclosures required by the Truth in Lending Act (TILA), and working with credit bureaus to improve reporting standards to create safe pathways out of debt.

While the bulletin is another important step towards providing clarity, transparency and the standardization of requirements expected by supervised institutions advancing innovation through technology, the OCC should continue to work with companies and its fellow regulators to establish thorough and detailed standards, as well as a unified regulatory approach that encourages innovation and protects consumers. As the Consumer Financial Protection Bureau (CFPB) report on BNPL concluded, we believe that clear guidelines and consistent industry practices can help ensure that consumers continue to have choice and flexibility when it comes to payment options.

AFC has long advocated for regulatory modernization that promotes innovation but also holds innovators accountable to being responsible and transparent. Modern and forward-looking regulation will strengthen the banks and fintech companies that innovate without compromising on consumer safety. We urge other federal regulators to follow the OCC and provide the regulatory clarity that can streamline the current patchwork of rules and regulations to ensure fair and consistent regulation throughout our industry.”