The Office of the Comptroller of the Currency (OCC) has issued guidance to US banks emphasizing the need for buy now, pay later (BNPL) loans to be offered in a “safe and sound” manner.
According to the guidance, national banks and federal savings associations should ensure that their underwriting processes, repayment terms, pricing, and safeguards are designed to “minimise adverse customer outcomes.” Additionally, any marketing materials and disclosures must be clear and easily understood.
The popularity of BNPL options has surged in recent years, with companies like Klarna and Affirm gaining millions of customers, leading traditional lenders to also participate in this market.
Concerns have emerged regarding the accumulation of debt among financially strained consumers, especially with the holiday season approaching. Acting Comptroller Hsu remarked, “As the buy-now-pay-later market grows and we enter the holiday shopping season, the guidance confirms our expectation that OCC-supervised institutions offering these products do so in a responsible manner.”