On February 28, the U.S. District Court for the District of Columbia received a court filing from the CFPB and its Acting Director Russell Vought, indicating they intend to submit a status report by March 31 on whether the Bureau will defend their interpretive rule on “Buy Now, Pay Later” (BNPL) products. As previously covered by InfoBytes, the interpretive rule would subject BNPL providers to Regulation Z’s open-end credit provisions. The filing responded to a request for a pre-motion conference by a plaintiff who challenged the interpretive rule, which went into effect on July 30, 2024, alleging that it exceeded the CFPB’s statutory authority by imposing obligations beyond those contemplated by TILA and by violating TILA’s effective date requirement for new disclosures. The lawsuit also averred the interpretive rule was arbitrary and capricious under the APA.
