Buy-Now-Pay-Later (‘BNPL’) is the current buzzword in consumer credit with what seems to be an announcement of a new participant entering the space on an almost weekly basis. The industry has been eagerly anticipating an announcement of a date when HM Treasury will publish its consultation of the regulatory framework that will bring BNPL into the regulatory perimeter. The anticipation has particularly been building since the Economic Secretary, John Glen MP, in his response to Chris Woolard’s letter setting out the urgency of legislative change to bring BNPL products into the regulatory perimeter, stated that “…it is therefore right that the Government takes swift action”. Since the acknowledgement to take swift action in the aforementioned letter published on 2nd February 2021 there has been radio silence in terms of any indication of when the public consultation process will begin – that is until last Friday.
The Compliance Company was in attendance at the Westminster Business Forum policy conference: Next steps for consumer credit: regulation, responsible lending and the future makeup of the retail lending market where Nisha Arora, Director of Consumer and Retail Policy, disclosed that we can expect the Government to consult on a proposed regulatory framework for BNPL in the next few weeks. It will be interesting to see how HM Treasury proposes to word the changes to the regulatory perimeter to achieve the purpose of incorporating BNPL products into the regulatory perimeter and retaining the borrower-lender-supplier exemption for non-financial service firms like gyms and dental practices that provide credit on an incidental basis.