CFBP rescinds Regulation Z enforcement for BNPL. What’s next?

The news: As anticipated, the Consumer Financial Protection Bureau (CFPB) will not enforce Regulation Z regarding buy now, pay later (BNPL) firms, per a press release.

How we got here: Last May, the CFPB announced that it would require BNPL providers to give users the same protections and rights afforded to credit cardholders under a broad reinterpretation of existing regulation.

The FTA—which counts BNPL firms like Block, Klarna, PayPal, and Zip among its members—sued in response, calling the CFPB’s reinterpretation “arbitrary and capricious.”

What this means: BNPL providers notch a win with the reversal. Fintechs have argued that their services are distinct from credit card and loan issuers and warrant bespoke regulations.

But major credit providers that offer card-linked installments could also exploit this rollback into a marketing win. Issuers can boast offering safely regulated services compared with fintech peers.

Customer satisfaction already reflects a preference for card-linked installments. Plan it by American Express, Chase’s Pay Over Time and Citi’s Flex Play swept JD Power’s 2025 BNPL satisfaction ratings, edged out fintech competitors for the second year in a row.

Our take: Moving forward, the CFPB will be hamstrung by DOGE staffing and funding cuts if it decides to take future action to curb fintechs.

BNPL firms can either take advantage of the regulatory gaps in the present or prepare for the return of similar guidelines under a new administration.

They could also conform with issuers’ rules to improve their trustworthy bona fides. With Affirm reporting loans to TransUnion, eagerness to mirror traditional credit providers may build from within the fintech space—rather than from outside pressures.