"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."
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.
Read at www.housingwire.com
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