HUD is assessing the role of Buy Now Pay Later (BNPL) products in the current financial landscape, noting that a significant number of consumers are using them. A report by the CFPB found that 20% of consumers with credit records used BNPL in 2022, with 60% being heavy users. While these products may provide a lower-risk credit option for some, HUD cautions that they could hinder consumers' ability to meet housing expenses. The FHA's current policies do not account for BNPL debts, and there is a broader call for transparency in the industry regarding these products.
The information will help guide efforts to address the evolving financial landscape regarding debt management and consumer credit access in the U.S.
One in five consumers with a credit record financed at least one purchase using a BNPL product from a major provider in 2022.
When used responsibly, BNPL products may serve as a lower-risk, short-term credit alternative for consumers with limited access to traditional financing.
As consumers take on additional short-term debt obligations through BNPL services, their capacity to manage housing-related expenses may be affected.
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