08:37 AM EDT, 05/22/2024 (MT Newswires) -- (Updates with additional details.)

Buy Now, Pay Later lenders are credit card providers and must provide key legal protections and rights to consumers that apply to conventional credit cards, according to an interpretive rule issued Wednesday by the Consumer Financial Protection Bureau.

The regulator found that Buy Now, Pay Later is a "close substitute for conventional credit cards." while buying goods and services.

"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," CFPB Director Rohit Chopra said.

Buy Now, Pay Later lenders must look into disputes that clients initiate and generate periodic billing statements like regular credit card accounts, according to the CFPB.