CFPB probe into BNPL firms: Good for UPST?

Breaking news just now and CNBC and discussed in this CNN link, CFPB identified 5 firms it’s investigating in connection with consumer concerns. IIRC, UPST was astute enough to proactively involve the CFPB on the front end.…


I agree that going to regulators of all kinds first was a great move on Upstart’s part.

Also, it’s worth noting that Affirm Founder/CEO Max Levchin served on the board of the CFPB for a three-year term starting in 2015. Here’s the relevant portion from his Wikipedia entry:

In 2015, Levchin was appointed to the U.S. Consumer Financial Protection Bureau (CFPB) advisory board for a three-year term, making him the first executive from Silicon Valley to be appointed to the board. In 2021, Levchin, after his experience on the advisory board at the CFPB, called for the necessity for the tech industry to engage more with regulators.

I would be very surprised if the CPFB found any issues with Affirm. Of course how long the inquiry keeps the stock price depressed is another matter.

6.5% AFRM
19.6% UPST


BNPL regulatory framework is more advanced than US. Afterpay dealt with the issue not long ago.

Please note even though both Afterpay and Affirm are in the same sector, their business models are different.

The most obvious one : Afterpay is a low fee BNPL provider and only charge a late fee around $10. No interest charged to the users. On the other hand, Affirm charges interests to the users in most of the cases. I understand Affirm has a free interest plan. In Australia, if the companies charge interests, they fall into credit provider’s category and more strict licensing/regulations apply. Afterpay is not a credit provider in Australia.



Below is the link directly from the CFPB.…

Unlike reading the Senator’s statements quoted in the CNBC article, the CFPB bulletin incites a lot less FUD. While I never count out being wrong, I view this as nothing more than FUD that will ultimately have little impact on BNPL provider’s business.

It is a good thing CFPB is looking into the industry. With respect to AFRM, it was pointed out above, the CEO sat on the CFPB board for 3 years. It would be absurd for him not to see this coming. I don’t think that is a leap of faith on my part.

Adding to what was also said above, I’d be surprised if CFPB found any issues with any of the BNPL providers, especially AFRM. I’m open to hearing why others think I’m wrong of course.



I was of the understanding that the BNPL was outside of the credit score mechanism. The only potential risk would be if they bring this under the same mechanism then would this impact the TAM for BNPL?