Yesterday, the OCC issued new guidance for banks, addressing the risks of buy now pay later lending. The guidance focused on the popular “pay in 4” segment of BNPL.
Not surprisingly, the national bank regulator recommended tight oversight of third-party servicers, the importance of transparent loan terms and fraud mitigation.
This guidance intends to minimize adverse outcomes for consumers by ensuring sound risk management is in place at every bank offering BNPL. The OCC also urged banks to report BNPL transactions to the credit bureaus in a timely manner.
As we said in an earlier newsletter this week BNPL is really popular with consumers and this holiday season will likely be the biggest ever for this payment method.
While fintech companies still take the lead in BNPL many banks have products in the market. Come January, if we see a wave of defaults at banks on their BNPL transactions, bank regulators will not be happy.
Europe: Following UK expansion, Robinhood brings crypto trading to EU Robinhood’s long-awaited international expansion is at full throttle. The consumer trading and investment app tailored to the younger generations is launching its crypto app to all eligible users in the European Union, the company said Thursday.
Global: Block releases Bitkey hardware wallet to 95 countries… kinda Jack Dorsey’s Block (the company formerly known as Square) announced today that it is releasing its hardware Bitcoin wallet, Bitkey, in 95 countries. However, users can only pre-order the device at the moment with shipping starting in early 2024.
Peter Renton is the chairman and co-founder of Fintech Nexus, the world’s largest digital media company focused on fintech. Peter has been writing about fintech since 2010 and he is the author and creator of the Fintech One-on-One Podcast, the first and longest-running fintech interview series.