A Democratic member of Congress from Florida is calling on the federal government to investigate the rapidly growing “rent now, pay later” industry, citing concerns that consumers may not fully understand the fees and cost structures associated with these services. Rep. Maxwell Frost, D-Florida, sent a letter to Consumer Financial Protection Bureau Acting Director Russell Vought urging the bureau to investigate rent-now-pay-later companies and hold them accountable for potential violations of federal consumer financial protection laws.
The letter, obtained by the Associated Press, also asks the bureau to explain what it is doing to protect renters and whether landlords are steering tenants toward rent-financing products. “Rent now, pay later” companies allow renters to split monthly rent into smaller payments over the course of a month, such as four weekly payments of $250 for a $1,000 monthly rent bill.
Frost, first elected to Congress in 2022 at age 25, said he frequently used buy-now-pay-later services to furnish his first apartment in Washington, which put him heavily into debt. He said it was only because of his congressional salary that he was recently able to pay those debts off. “Americans should know they have rights when using these buy now, pay later products,” Frost said. “This is why the CFPB was created in the first place.”
Companies such as Flex and Livble say breaking rent into multiple payments can help renters manage cash flow, but some payment plans come with fees and finance charges. In February, the AP reported that users of these services were paying as much as $50 a month to split their rent. Other companies, including Affirm, are running limited experiments with splitting rent into multiple payments.
Frost’s letter warns that “while many of these companies market their loans as ‘innovative’ products that can help struggling cash-strapped renters, many of these products more closely resemble repackaged payday loans.” A February report by Protect Borrowers and Toward Justice argued that some RNPL companies should comply with Truth in Lending Act requirements based on how they structure their products, though the industry strongly disagreed with those findings.
The CFPB has sharply curtailed its work under the second Trump administration. Under Vought, the bureau has rolled back regulations and guidance, dropped enforcement actions, and moved to rescind previous agency activity. Vought’s tenure at the CFPB will end this summer. President Trump has nominated Brian Johnson, an executive formerly with Capital One, as the next permanent director. Frost said that if the bureau does not act, he hopes to propose legislation next year if Democrats take 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, as reported by Local 10 News.
