Rep. Maxwell Frost, D-Florida, has called on the Consumer Financial Protection Bureau (CFPB) to investigate the burgeoning "rent now, pay later" (RNPL) industry, expressing concern that consumers may not fully understand the associated fees and costs.
In a letter to CFPB Acting Director Russell Vought, Frost urged the bureau to examine RNPL companies for potential violations of federal consumer financial protection laws. He also asked for clarity on the bureau's current efforts to protect renters and whether landlords are directing tenants toward these financing products.
RNPL services enable renters to divide their monthly rent into smaller installments spread over the month. While companies like Flex and Livble market these services as tools to help manage cash flow, some plans have been associated with substantial fees and finance charges. A February report indicated that some users were paying as much as $50 per month to split their rent payments. Frost suggested in his letter that many of these products resemble "repackaged payday loans."
Frost, who has personal experience with buy now, pay later services, stated that his own use of such products to pay rent and furnish an apartment led to significant debt, which he was only recently able to repay due to his congressional salary. He believes this experience is common among young Americans and emphasized the importance of consumers knowing their rights.
These RNPL offerings differ from platforms like Bilt, which allows members to pay rent via its credit card and rewards program, or Affirm, which has conducted trials for splitting rent payments. The primary function of RNPL companies is to finance large rent obligations across multiple payments.
Frost highlighted the need for greater consumer disclosure as these products gain popularity. A report from Protect Borrowers and Toward Justice argued that certain RNPL companies should be subject to the Truth in Lending Act requirements based on their product structures, a finding the industry contested.
During the Trump administration, the CFPB's activities have been significantly reduced. Under Vought's leadership, the bureau has seen a rollback of regulations and guidance, a cessation of enforcement actions, and a rescission of previous agency initiatives. Calls from members of Congress for bureau investigations have frequently gone unanswered. The CFPB had not immediately responded to a request for comment on Frost's letter.
Vought's term as CFPB director is set to conclude this summer. President Trump has nominated Brian Johnson, a former executive at Capital One and a previous high-ranking CFPB official during the Trump administration, to be the bureau's next permanent director.
Frost indicated that if the CFPB does not take action, he intends to leverage information gathered from his letter and other sources to propose legislation next year, should Democrats regain control of Congress. "I’m not holding my breath for the Trump administration to do the right thing, but this is the first step of many we can take to make sure these products are used correctly and Americans are protected," he said.