The American Fintech Council (AFC) has submitted a comment letter to the Oregon Department of Consumer and Business Services (DCBS), Division of Financial Regulation, urging the agency to reconsider its proposed bulletin regarding consumer finance and payday licensing requirements for buy now, pay later (BNPL) products.
AFC's core concerns
AFC has called on the Division to adopt a more tailored regulatory approach reflecting what it describes as the distinct structure and consumer protections associated with responsible BNPL products. The organisation has urged the Division to reconsider applying Oregon's existing payday lending and consumer finance licensing framework to BNPL products, arguing that regulations designed for high-cost payday lending may not reflect the structure of BNPL products and could introduce regulatory uncertainty for providers.
AFC has also asked the Division to clarify that merchant compensation arrangements should be treated separately from consumer finance charges, arguing that these fees compensate BNPL providers for payment-related services rather than representing a charge associated with extending credit to consumers.
Position on the purchase money loan exclusion and rulemaking process
AFC has asked the Division to reconsider its interpretation of the purchase money loan exclusion, arguing that BNPL products are designed to finance specific retail purchases at the point of sale and should be assessed based on their transaction-specific structure rather than whether they are secured by collateral.
The organisation has also recommended that any significant changes to BNPL regulation in Oregon be pursued through a formal rulemaking process. AFC described the proposed bulletin as representing a substantial expansion of existing regulatory expectations and recommended that the Division adopt a transparent, stakeholder-driven process for developing any future regulatory framework.
Company commentary
A company official at AFC said responsible BNPL providers offer consumers an alternative to traditional forms of credit, citing clear repayment terms and predictable schedules as features distinguishing these products, and said Oregon policymakers have an opportunity to establish a regulatory approach that allows consumers to continue accessing these products.
A separate company official at AFC said Oregon's approach to regulating BNPL products should be informed by a review of existing statutes, recognition of the specific structure of BNPL products, and engagement with industry stakeholders before new compliance requirements are introduced.
Broader context
AFC represents more than 150 member companies and partners across the fintech and banking sectors and describes itself as promoting responsible innovation and sound public policy within financial services. The letter reflects a broader ongoing debate among US states regarding how existing consumer credit and payday lending frameworks should apply to BNPL products, as regulators continue to assess how these products should be classified and supervised relative to traditional forms of consumer credit.
