Finance

Consumers can now get refunds from Buy Now, Pay Later loans, CFPB says

Published

2 years ago

May 22, 2024

Consumers can now get refunds from Buy Now, Pay Later loans, CFPB says

Buy Now, Pay Later programs are effectively the same as credit cards, the Consumer Financial Protection Bureau said Wednesday.

In what it called an interpretive rule, the federal consumer watchdog agency said so-called BNPL lenders are obligated to offer refunds and allow users to dispute charges just like they can with traditional credit cards.

What You Need To Know

The Consumer Financial Protection Bureau says Buy Now, Pay Later programs are subject to the same rules as credit cards

BNPL lenders are obligated to offer refunds and allow users to dispute charges just like they can with traditional credit cards

The CFPB said BNPL programs fall under the purview of the Truth in Lending Act

About 14% of U.S. adults said they used BNPL programs in 2023, according to a new survey from the Federal Reserve

“When consumers check out and choose Buy Now, Pay Later, they don’t know if they will get a refund if they return their product or whether the lender will help them if they didn’t get what was promised,” Consumer Financial Protection Bureau Director Rohit Chopra said in a statement.

“Regardless of whether a shopper swipes a credit card or uses Buy Now, Pay Later, they are entitled to important consumer protections under longstanding laws and regulations already on the books.”

The CFPB said it has been investigating the BNPL industry for more than two years and often receives complaints about refunds and disputed transactions in such programs. About 13% of BNPL transactions involve a dispute or return, the agency said.

BNPL programs that let customers pay for products over time without paying interest have grown in recent years. A new Federal Reserve Economic Well-Being of U.S. Households report released this week said 14% of U.S. adults reported using Buy Now, Pay Later programs last year — a 2% increase compared with 2022.

Consumers’ top reasons for using BNPL were wanting to spread out payments (87%) and convenience (82%). More than half of BNPL users said it was the only way they could afford to buy what they did.

The CFPB said BNPL programs are advertised as a payment option at checkout, similar to credit cards. They work as digital accounts that link to a company’s web site or mobile app. Merchants are charged transaction fees, similar to credit cards.

The CFPB said BNPL programs fall under the purview of the Truth in Lending Act, requiring lenders to investigate disputes initiated by consumers and pause payments while they are investigated. The act also ensures lenders credit refunds to consumer accounts and provide billing statements.

“President Biden has encouraged his Administration to do everything possible to crack down on corporate rip-offs,” National Economic Council Deputy Director Jon Donenberg said in a statement about the rule. “The Consumer Financial Protection Bureau is answering that call by making sure Buy Now, Pay Later platforms abide by the law, including providing refunds when products are returned or not delivered.”

The interpretive rule comes less than a week after the Supreme Court preserved the current funding structure for the agency, which was established during the Obama administration to enforce federal protections for consumer financial products.

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Finance

Is the dominance of the US dollar unravelling under Trump?

Published

53 minutes ago

December 5, 2025

Press Room

Is the dominance of the US dollar unravelling under Trump?

The dominant global financial position of the US and its currency, the dollar, is wobbling under the second Trump administration. AURA88 / Shutterstock

The US has long sat at the centre of the global financial system, with the US dollar serving as the backbone of the world economy. Private investors rely on the dollar as a store of value in times of uncertainty.

Governments and central banks hold dollars to manage the value of their own currencies and as a form of insurance against economic shocks. Key commodities such as oil are also priced in dollars.

This dominant position, which has given the US enormous privileges including the capacity to borrow money cheaply and the ability to use the global financial system as a tool of statecraft, is often explained through the size and stability of US markets and the strength of its institutions. But beneath these economic fundamentals lies something more intangible: trust.

Countries and private financial institutions hold dollars, trade in dollars and borrow in dollars because they trust the US to maintain an open, rules-based international order. They also trust the US to honour contracts, protect property rights and manage the world’s financial plumbing responsibly by acting as an international lender of last resort during periods of crisis.

The dollar system has long had its critics. In the aftermath of the global financial crisis, which occurred between 2007 and 2009, emerging economies faced severe spillovers from US monetary policy and growing exposure to dollar-denominated debt. They also witnessed the increasing use of financial sanctions as a tool of US foreign policy.

China, Russia, India and other countries outside the west began constructing alternative financial infrastructures – new payment systems, currency swap lines and efforts to internationalise their own currencies. What began as a gradual search for some form of protection from US financial power quietly created cracks at the margins of the dollar-based system.

However, nothing has been as disorienting to the global role of the dollar as the second Trump administration’s overt attacks on the liberal international economic order. The imposition of sweeping trade tariffs, as well as efforts to undermine international and domestic institutions, represent a fundamental break with the promise of responsible American financial leadership.

Previous predictions of the dollar’s decline have proved premature. But as we argue in a recently published paper, the erosion of trust in the US as the steward of the liberal international order should be taken seriously. What we are seeing is not the immediate collapse of US financial power, but the beginning of a slow transition towards a fragmented, multipolar – and less predictable – global monetary system.

Three developments stand out. First, Washington’s commitment to the liberal economic order under the leadership of Donald Trump is being widely questioned. Rather than acting as the guarantor of open markets, Trump has reframed global trade as a transactional system where countries must “buy down” US tariffs. This means other countries must essentially now buy American Treasuries and other securities in exchange for access to the US market.

Second, surging US debt is increasing doubts about US fiscal stability. The Trump administration’s major tax cuts and spending plans are projected to create persistent deficits of around 6% of GDP, and US government debt has ballooned to record levels. This has prompted foreign central banks to reduce their dollar holdings.

Third, the Trump administration is openly attacking and undermining US government agencies and the country’s central bank, the Federal Reserve. Trump has repeatedly threatened to replace the current Fed chair, Jerome Powell, and dismiss other central bank officials since returning to the White House in January.

Central bank independence is considered a hallmark of credible monetary governance and undermining it raises doubts about whether the US remains a reliable anchor for the global financial system. According to Reuters, European officials are now openly questioning whether the Fed will continue to supply dollars to overseas central banks at times of financial strife.

Taken together, these actions are striking at the core foundation of dollar dominance: the assumption that the US will behave predictably, responsibly and with institutional restraint.

Despite the turbulence, no single currency is ready to replace the dollar. China’s renminbi still lacks open capital markets and strong legal protections, while the euro lacks a unified fiscal authority. New digital currency platforms remain experimental or speculative.

Still, the world is moving towards a more fragmented monetary landscape. Countries are diversifying their reserves into gold and other non-dollar assets. At the same time, regional payment systems are proliferating and dollar-denominated lending to emerging economies is declining.

Commodities are also priced increasingly in currencies other than the dollar. And no longer are only countries like China retreating from the dollar system, even US allies in Europe are encouraging banks to reduce their reliance on dollar funding.

The global economy is entering a financial interregnum – a period in which the old order is fading but the new one is not yet born. The dollar’s dominance will not vanish overnight as too many institutions and networks still rely on it. But its uncontested supremacy is coming to an end.

A fragmented financial system will reduce US leverage, while also making the global economy more complex and, possibly, more crisis-prone. The dollar is not dead. But the world is slowly preparing for life beyond dollar hegemony, and the second Trump administration may be the catalyst that turns long-running dissatisfaction into systemic change.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Fabian Pape receives funding from the Leverhulme Trust (ECF-2024-367).

Johannes Petry receives funding from German Research Foundation (446618653)

Tobias Pforr received funding from the European Research Council (grant agreement No 884910).

Finance

No budget deal in sight as Johnson’s finance team pokes holes in alders’ plan

Published

13 hours ago

December 4, 2025

Press Room

No budget deal in sight as Johnson’s finance team pokes holes in alders’ plan

It’s clear Chicago Mayor Brandon Johnson and the Chicago City Council are no closer to reaching a budget deal, as top financial officials in the mayor’s administration have largely rejected the alternative budget plan presented by council members.

The 2026 budget plan needs to be approved by the mayor and at least 26 of the 50 alders by the end of the year. In October, Johnson presented his plan, which included a $21 per employee corporate head tax on the city’s largest companies each month, plus a host of other taxes. A month later, the mayor’s revenue ideas were soundly rejected by the council’s Finance Committee.

Alders began crafting their own plan, and 26 of them signed a letter Tuesday presenting an alternative proposal. The alternate plan took out the corporate head tax, replacing it instead with items like an increased garbage fee, with an exemption for seniors, and an increased liquor tax at liquor stores.

The mayor’s financial team — Chief Financial Officer Jill Jaworski, Budget Director Annette Guzman and City Comptroller Michael Belsky — responded to the alders Thursday, thanking them for their plan but rebuking several of their proposals, saying, for example, that an improved debt collection plan, is “not supported by legal, financial, or operational realities.” The mayor’s administration said increasing the garbage collection fee from $9.50 to $18 per month would represent a 90 percent increase in a year, which would be a financial hardship for families.

“At a time when many communities are already experiencing substantial property tax increases through the recent property assessments conducted by the Cook County Assessor and the appeals approved by the Board of Review, imposing another major cost escalation would create an immediate and disproportionate burden on households least able to absorb it,” Jaworski, Guzman and Belsky wrote in a joint statement to the 26 alders.

The mayor’s team also made it clear the corporate head tax — which it calls a “Community Safety Surcharge” — will stay in the budget proposal, despite objections from more than half the council. Opponents of the head tax call it a “job killer.” The mayor’s team challenged that notion, saying the assertion that it would “disincentivize economic growth is not substantiated by data.”

“The assumption that corporate taxation directly affects employment growth lacks empirical support. By investing in proven community safety interventions, we are making Chicago better for businesses. A progressive revenue like the Community Safety Surcharge, one that asks those who have benefited the most from the city’s growth and prosperity to contribute their fair share, is not a threat to prosperity, but a prerequisite,” Jaworski, Guzman and Belsky wrote in a joint statement to the 26 alders.

Ald. Nicole Lee and Ald. Scott Waguespack responded to the mayor’s administration’s rebuke of their alternate proposal, disagreeing with their assessment.

“The mayor’s office has offered no new ideas – only criticisms of our work. This is not anyone’s idea of actual collaboration,” Lee said.

“It is time for Mayor Johnson to accept the reality that his budget is not going to pass as is,” Waguespack said. “We will take the necessary steps required to move this process forward on our own.”

The city paid the accounting firm Ernst and Young $3 million to outline efficiencies that could help Chicago close its billion-dollar gap in its $16 billion 2026 budget. Among the options in the report: consolidating city purchasing and fleet management, streamlining city departments and better managing health care costs.

Alders have urged Johnson to adopt more recommendations from the report, but his finance team responded in their memo Thursday, saying, “It is important to note that the City’s Financial and Strategic Reform Options report presents a set of options for consideration—not mandates.”

The mayor’s administration noted that it has made changes to its own initial proposal, including the full restoration of the Chicago Public Library’s circulation budget, additional money for the advanced pension payment, more funding for community programs and upping a program that helps low-income people with disabilities make their homes more accessible.

Finance

Financial literacy now required in 30 states, including Ohio, for high school graduation

Published

1 day ago

December 4, 2025

Press Room

Financial literacy now required in 30 states, including Ohio, for high school graduation

COLUMBUS, Ohio — Ohio is among 30 states that require a semester-long financial literacy class for high school graduation.

Students in financial literacy learn about saving, building credit, debt, budgeting and fraud.

As with many states, Ohio’s financial literacy requirement is new, taking effect for students who entered ninth grade on July 1, 2022.

Nationally, 73% of high school students will have received financial literacy education before they graduate, according to an August report by the National Endowment for Financial Education.

This is up from only 9% of high school students in 2017, the organization said.

But in recent years, state legislatures have increasingly passed laws requiring students to obtain financial literacy, recognizing the complex financial choices teens face as they graduate and enter adulthood, according to the Council for Economic Education.

From budgeting and managing debt, to banking and fraud prevention and understanding the economy, students need a baseline of knowledge to navigate their financial futures, the council stated in a 2024 report.

States of all political stripes are requiring financial literacy to graduate, according to the National Endowment for Financial Education, including Ohio’s neighbors: Michigan, Indiana, Kentucky, West Virginia and Pennsylvania.

In the state budget the General Assembly passed in June, lawmakers made a change to financial literacy, permitting students who work in public and private school-based branches of credit unions to earn credit toward their graduation requirement.

Read More: Budding entrepreneurs: High school finance lessons blossom for brothers into business success

Some credit unions have run school branches for years, as well as offer financial literacy education.

The push for financial education is already helping former high school students who used the foundational knowledge to launch businesses.

In Lake County, twins Derek and Dominik Zirkle relied on the financial literacy education they received at Madison High School, provided in part by Theory Federal Credit Union, to start D & D Meadery, a honey wine business that opened in 2024 and distributes to more than 300 retail locations.

The class provided the Zirkle twins, now 24, “the foundations to begin the journey,” Dominik Zirkle said. The twins began their business by using their savings, living leanly and reinvesting profits. They sought help from a Theory certified financial counselor who had previously visited their high school class.

Lake County-based Cardinal Credit Union has run school branches for years.

A Cardinal employee runs the branches, but students can volunteer as tellers to gain hands-on experience, performing activities such as making deposits, withdrawing money and paying loans.

Credit unions, including Cardinal, deposit small amounts of money into student accounts so students can practice moving funds, writing checks, and making mistakes in a safe environment.

This allows them to “afford to make minor mistakes,” said Michael DeSantis, Cardinal’s educational finance coordinator.