MONEY MAYHEM

‘Buy Now, Pay Later’ Crisis Brews Under Trump’s Watch

An increasing number of borrowers are falling behind on their loan payments.

The “buy now, pay later” (BNPL) sector is hurtling toward a crisis with an increasing number of borrowers falling behind on their loan payments, The New York Times reported. Klarna, one of the leading BNPL providers, saw a huge spike in customers missing payments; credit losses totaled $136 million in the first quarter, marking a 17 percent increase compared with the same period last year. Meanwhile, 41 percent of BNPL users say they’re missing payments, up from 34 percent the year prior, according to a survey by the credit platform LendingTree in April. The Trump administration has “upended oversight of the industry,” the Times said, referring to the Consumer Financial Protection Bureau’s announcement that it would not enforce a Biden-era rule aimed at regulating pay-later lenders in the same way as credit card companies, which required them to send out monthly billing statements and provide safeguards for customers seeking refunds. “Consumers are going to be squeezed and more reliant on these products,” said Julie Margetta Morgan, a former bureau official. “And the companies are being offered a free pass to construct those products in ways that are the most profitable to them.”