In a prior post, we reported that the language used in orders recently issued by the CFPB to leading Buy Now, Pay Later (“BNPL”) providers suggested that the CFPB intends to use the information it collects to build enforcement cases rather than monitor market developments. We also reported that if this is the case, it is a departure from historic precedent and can be considered an end-run around the procedural safeguards established by Congress in Section 1052 of the Dodd-Frank Act to ensure that due process is afforded to financial institutions that become the target of CFPB enforcement investigations.

The CFPB’s intentions were apparently confirmed in a January 5 article in Axios about the BNPL orders, which quotes the CFPB’s small dollar, marketplace and installment lending program manager as saying:

It is certainly possible that we could as a result of the data collection take enforcement action.

Assuming this quote is accurate, recipients of CFPB 1022(c)(4) market monitoring orders should be well aware that any information provided to the agency may be used for enforcement purposes.

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