The agency stated it will redirect its enforcement and supervision resources toward what it described as "pressing threats to consumers, particularly servicemen and veterans."
The CFPB said the policy shift is intended to focus resources on "supporting hard-working American taxpayers, servicemen, veterans, and small businesses."
The buy now, pay later rule, published in the Federal Register on May 31, 2024, extended Truth in Lending Act requirements to buy now, pay later providers.
The regulation treated these short-term installment loans similarly to traditional credit cards, requiring providers to offer standard credit disclosures, investigate disputes, and provide refunds for returned merchandise.
Under the new policy, the bureau will keep its enforcement apparatus focused on other consumer protection priorities rather than pursuing violations of the buy now, pay later regulation's disclosure and dispute resolution requirements.
The agency did not specify which particular threats would receive priority attention or provide a timeline for potential rescission of the rule.
The buy now, pay later market has expanded significantly, with companies like Klarna, Affirm, and Afterpay facilitating billions of dollars in transactions.
The original rule was designed to address a gap in consumer protections, as these products had largely operated outside traditional lending regulations despite functioning as credit products.
The announcement signals a shift in the bureau's approach to financial technology regulation and raises questions about whether other recent fintech rules might face similar reconsideration.