Staying Compliant with BNPL Loans: 5 Essential Steps

Growth and popularity of Buy Now Pay Later (BNPL) loans continue to rise, so too does the need to to ensure data transparency, affordability and disclosure.

BNPL loans reached a projected 91.5 million users in 2025, with the 2026 US market projected to surpass $100 billion in payment volume. However, late payment rates are increasing, demonstrated by the 41% of users who missed payments in 2025. Continued growth will require financial institutions to prioritize responsible lending through credit checks, transparency, and preparation for scrutiny from state attorneys general and the consumer protection working group led by former CFPB Director Rohit Chopra.

Understanding BNPL’s Risk for Consumer Harm

Financially fragile households tend to seek out financing through BNPL loans because the underwriting criteria tends to be less requiring than traditional loans. The most common profiles for these borrowers often have higher levels of debt, have more delinquencies on traditional credit products and use their bank’s overdraft services. BNPL’s growth, popularity and product diversity requires lenders to consider the risks BNPL loans can have on consumers. While the CFPB rescinded the BNPL Interpretive Rule and announced they would not reissue it, the risks outlined by the Bureau’s 2022 report should still cause concern.

• Inconsistent consumer protections: Borrowers of BNPL products currently lack common consumer protections, such as dispute resolution rights or standardized and clear credit disclosures that could drive consumer harm.
• Data harvesting and monetization: BNPL platforms are rapidly building a strong presence. They leverage data to create digital profiles based on borrowing patterns and behaviors. However, these data collection practices raise concerns about compromising consumer privacy and the potential for market dominance by a few large tech platform providers.
• Debt accumulation and overextension: BNPL lenders often lack visibility into a borrower’s existing liabilities. Since most BNPL lenders do not report to the CRAs, there’s a risk of loan stacking, which increases the chances of consumer default.

5 Proactive Steps to Take for BNPL

Below are suggested steps Bridgeforce recommends for BNPL lenders to mitigate risk and provide oversight and transparency.

1. Comprehensive Risk Assessment:  Conduct thorough risk assessments as a credit card issuer would, to identify potential compliance gaps and vulnerabilities within business operations. This includes evaluating risks related to consumer protection, data privacy and fraud prevention.

2. Enhanced Consumer Protections:  Implement robust consumer protection measures to ensure transparency, fairness, and responsible lending practices. These practices may involve providing clear and easily understandable terms and conditions, offering flexible repayment options, and providing strong support for customers experiencing financial difficulties. Maintain a robust complaint monitoring and handling process to track how customers respond to your efforts.

3. Regulatory Compliance Framework:  Develop and maintain a comprehensive regulatory compliance framework. This involves establishing internal policies, procedures, and controls to ensure ongoing adherence to evolving regulatory requirements.

4. Third Party Oversight:  Strengthen third-party risk management, especially when partnering with merchants or technology providers. The OCC expects banks to have effective third-party risk management practices in place to monitor and control risks from external relationships.

5. Invest in Team Training and Regulatory Readiness:  Empower your teams with ongoing training and development focused on BNPL-specific risks, compliance obligations and emerging regulatory trends. Regular targeted education ensures your staff can identify red flags, adapt to new requirements and foster a culture of compliance. Well-trained teams are your first line of defense against compliance missteps and consumer harm.

Navigate BNPL Loans with Bridgeforce

The BNPL landscape is evolving rapidly, as are expectations for compliance, transparency and consumer protection. Bridgeforce partners with financial institutions to anticipate regulatory shifts, build resilient compliance frameworks, and upskill teams for long-term success. Our actionable strategies and hands-on support help you stay ahead of scrutiny, protect your customers, and unlock growth in the BNPL market.

Ready for the future of BNPL? Contact us to get started.