BNPL regulation is making headlines as the FinTech IPO index falls

The FinTech IPO Index lost 2.6% as earnings rose.

Buy now, pay later (BNPL) has arguably won – it dominated headlines as the Consumer Financial Protection Bureau (CFPB) unveiled new oversight of providers.

The CFPB is hesitant

As PYMNTS reported on Wednesday (May 22), the CFPB ruled that BNPL merchants are credit card providers and must provide certain key legal protections and rights provided by conventional credit cards. The agency said this includes, for example, a consumer’s right to dispute charges and request a refund from the lender.

An interpretive rule published Wednesday by the CFPB states that BNPL lenders must investigate consumer-initiated disputes, withhold payments pending investigation, refund funds to consumers’ accounts when products are returned or services are canceled, and provide periodic billing statements such as those traditionally provided by conventional companies. credit card accounts.

Affirm shares have lost 5.2% over the last five sessions. Sezzle shares fell 0.7%.

XP earnings results drag the index down

XP shares fell 15.8%. Last week, the company announced results that detailed customer assets totaled 1.1 trillion reais ($213.82 billion) in the first quarter of 2024, up 20% year-over-year and 2% sequentially. The number of active customers increased by 16% compared to last year and 1% compared to the fourth quarter of 2024, reaching a total of 4.6 million in the most recent period. The total number of advisors was 17,700, an increase of 16% year-on-year.

In the most recent quarter, the average daily volume of retail transactions was 2.2 million, down 9% from a year ago. Total active cards were 1.2 million in the first quarter, up 49% year over year.

Robinhood’s latest news on brokerage-linked rates sent shares up 7.5%.

As PYMNTS reported here, Robinhood has introduced new lower margin rates that it says are the lowest among leading brokerages. Rates vary based on a customer’s total margin balance and range from 5.7% to 6.75%, the online brokerage said this week. Six rates are offered in this tiered margin structure, ranging from 5.7% for margin balances of $50 million or more to 6.75% for margin balances of $50,000 or less.

Earlier this month, Flywire announced that it has expanded the availability of its third-party invoicing solution, which streamlines the payment process for third-party sponsors who pay a student’s tuition and fees. The company said institutions can reduce administrative burdens, facilitate billing reconciliation and increase their revenues by creating, issuing and tracking invoices to engage sponsors and encourage on-time payments.

Flywire shares rose 5.8%.

FinWise Bank said it has launched a new strategic lending program with Plannery, a financial wellness platform that hospital systems can offer their employees to help them become debt-free and stay in debt.

FinWise’s lending product enables hospital systems to offer employees ways to consolidate and lower interest rates on credit cards and personal loans. Companies say linking transactions to payroll helps reduce missed payments and late fees and speeds employees’ path to financial stability. Plannery and FinWise will offer this innovative product through business sponsorships such as hospitals and strategic partners. The product will be an unsecured, fixed-rate loan available nationwide.

FinWise shares lost 0.8%.

SoFi announced the securitization of a $350 million personal loan exclusively using funds and accounts managed by PGIM Fix Income, a Prudential Financial company. To date, SoFi said in the announcement, it has sold more than $15 billion and securitized more than $14.5 billion of personal loan collateral. SoFi shares lost 4.1%.