Wolfe sees limited impact to PayPal, Square from CFPB interpretive rule

Wolfe Research believes the Consumer Financial Protection Bureau’s interpretive rule that confirms buy now, pay later lenders are credit card providers will not have material implications for company’s with BNPL exposure such as PayPal (PYPL) and Block (SQ). The ruling is focused on consumer rights to refund protection and disputes, which Wolfe does not see impacting these companies’ ability to originate BNPL loans, the analyst tells investors in a research note. The firm points out PayPal and Squared have both noted that they already offer these mechanisms and protections to its consumers around investigating disputes, refunds, and issuing periodic billing statements. Wolfe’s U.S. policy and politics analyst Tobin Marcus believes the ruling is on the benign end of outcomes that were in discussion in D.C.