The CFPB said it would not prioritize enforcement actions stemming from a 2024 interpretive rule that classified Pay in 4 loans as credit cards, which put them under the purview of the Truth in Lending Act’s Regulation Z. “The Bureau will instead keep its enforcement and supervision resources focused on pressing threats to consumers, particularly servicemen and veterans,” the announcement said. “The Bureau takes this step in the interest of focusing resources on supporting hard-working American taxpayers, servicemen, veterans, and small businesses. The Bureau is further contemplating taking appropriate action to rescind [credit card classification] for Buy Now, Pay Later.” The CFPB also recently said it would not enforce its payday lending rule at the end of March, just days before it was set to go into effect. The pullback marks a continuation of efforts by a more fintech-friendly administration. “I think fintechs can breathe another sigh of relief knowing that they may not need to ‘fit a square peg in a round hole’ with the imposition of credit card protections on BNPL products for which they may be at least somewhat ill-fitted,” Eamonn Moran, a partner at Holland & Knight said. Some BNPL loans, specifically Pay in 4 loans, live in a nebulous area of regulatory oversight. Installment loans with four or less payments are exempt from the Truth in Lending Act, meaning BNPL lenders are not required to provide customers with disclosures about the terms and costs of credit like credit cards and other installment loans with four-or-more payments. The CFPB’s interpretive rule, which former Director Rohit Chopra put forth in 2024, was an attempt to close that loophole. The CFPB’s research in January found that most BNPL loans were made to subprime consumers with high credit card balances and multiple loans, a segment of consumers that are particularly exposed to predatory lending. “Our members are focused on ensuring that consumers have access to responsible financial services like BNPL and often implement industry best practices long before being directed by regulators. We look forward to continuing our work with the CFPB and regulators across the country to enable responsible financial innovation without sacrificing consumer protection,” said Phil Goldfeder, CEO of the American Fintech Council,