Buy now, pay later (BNPL) companies such as Affirm (NASDAQ:AFRM) are in the spotlight as regulators scrutinize payment installments. With uncertainty increasing, investors in AFRM stock and its BNPL peers are continuing to see downside pressure materialize.
Now, it should be noted that some investors have been looking favorably at AFRM stock in recent weeks. Even today, shares briefly popped into the green as the major indices suffered.
But for many, the regulatory fears weighing on BNPL providers are disconcerting. A key upcoming deadline set for March 1 could change the calculus for investors with respect to AFRM stock and its peers.
Let’s dive into what investors are watching with Affirm right now.
AFRM Stock Hit By Regulatory Concerns in BNPL Space
Interesting discussion among investors with respect to the Consumer Financial Protection Bureau’s (CFPB) March 1 deadline for BNPL companies to provide information related to their business practices is underway.
Like many regulatory bodies, the CFPB is out there to protect the little guy. A deep dive into how consumers’ information is secured, as well as how well BNPL players abide by consumer protection laws, is ongoing. Many industry experts expect to see some investigations opened up as a result of the information provided.
Now, Affirm is not the only company that’s on the radar of the CFPB. Its competitors such as PayPal (NASDAQ:PYPL) and Afterpay (OTCMKTS:AFTPY) have also been tapped for information. At this point, it appears regulators are simply trying to better understand what’s going on in this space.
That said, whenever regulators start digging, there’s the potential for litigation. Investors in AFRM stock should keep this deadline — and its results — in mind.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
