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California Department Of Financial Protection & Innovation Settles With “Buy Now, Pay Later” Company – Financial Services



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On August 3, 2022, the California Department of Financial
Protection and Innovation (DFPI) announced that it had entered into a consent
order with a Florida-based lending company that allegedly made
“illegal loans.” Specifically, the consent order alleges that the company’s
policy of making “buy now, pay later” arrangements for
point-of-sale transactions qualified as “loans,”
subjecting the arrangements to DFPI’s jurisdiction under
California Financial Code § 22000 et seq. The DFPI further
alleged that the company entered in to such transactions without
obtaining a license from the DFPI.

The order assesses a $2,500 administrative penalty and requires
the company to refund $13,065.68 that it charged in fees. In
exchange, DFPI granted the company a California lending
license.

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