Examining Consumer Choice in Digital Payments Act

The Director of the Bureau of Consumer Financial Protection may not issue any new rule or guidance relating to buy now pay later services until—

(1) after the reports required under subsections (b)(2) and (c)(2) are submitted to the relevant congressional committees; and

(2) the Bureau has considered the results of such reports with respect to such new rule or guidance.

The Director of the Bureau of Consumer Financial Protection shall conduct a study on buy now pay later services to determine—

(A) the nature, size, and role of the entities offering buy now pay later services;

(B) the market share held by the primary nonbank firms and financial institutions offering buy now pay later services;

(C) the demographics of consumers most likely to utilize buy now pay later services and for what purpose;

(D) the disclosures provided to consumers regarding buy now pay later services, including the accessibility and readability of such disclosures;

(E) the benefits of buy now pay later services, including—

(i) the flexibility of payment options;

(ii) the potential for increased purchasing power; and

(iii) competitive product offerings;

(F) the risks of buy now pay later services, including—

(i) potential for delinquencies and prolonged debt;

(ii) the ability of consumer reporting agencies to accurately score buy now pay later transactions; and

(iii) any unintended consequences for reporting data on such services to consumer reporting agencies;

(G) the prevalence of partnerships between entities offering buy now pay later services and traditional financial institutions and e-commerce platforms; and

(H) the potential for fraud in buy now pay later services.

Not later than 1 year after the date of enactment of this Act, the Director of the Bureau of Consumer Financial Protection shall submit to the relevant congressional committees a report that includes the results of the study required by paragraph (1).

The Comptroller General of the United States shall—

(1) conduct a study on buy now pay later services—

(A) to determine the information specified in subparagraphs (A) through (H) of subsection (b)(1); and

(B) that compares the specific features, benefits, and risks of using such services to the use of other products, including—

(i) overall debt accumulation;

(ii) the average interest rate charged to consumers;

(iii) the range of interest rates charged to consumers;

(iv) the amount and type of fees charged to consumers annually;

(v) the clarity of legal disclosures associated with such use; and

(vi) consumer understanding of payment cycles and due dates; and

(2) not later than 1 year after the date of the enactment of this Act, submit to the relevant congressional committees a report that includes the results of the study required by paragraph (1).

The Director of the Bureau of Consumer Financial Protection shall withdrawn the interpretive rule titled Truth in Lending (Regulation Z); Use of Digital User Accounts to Access Buy Now, Pay Later Loans (May 22, 2024), and such interpretive rule shall have no force or effect.

In this section:

The term buy now pay later services means an alternative payment method that allows consumers to pay for purchases in up to 4 installments.

The term relevant congressional committees means—

(A) the Committee on Financial Services of the House of Representatives; and

(B) the Committee on Banking, Housing, and Urban Affairs of the Senate.