Lawmakers Seek to Ban Buy-Now, Pay-Later Loans for Semiautomatic Weapons
(Bloomberg) -- Nineteen Democratic lawmakers proposed a ban on buy-now, pay-later loans to finance semiautomatic weapons that would include levying hefty fines on companies that enable the transactions and dealers that accept them.
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The Assault Weapon Financing Accountability Act, which will be introduced Thursday by Connecticut Representative John Larson and co-sponsored by 18 other US House members, would prohibit loans payable in four or fewer installments, not including down payments, to purchase semiautomatic weapons, according to a copy of the bill reviewed by Bloomberg News. Violators would be subject to a $100,000 penalty.
Regulators have stepped up their scrutiny of BNPL companies amid concerns the industry markets toward younger consumers and people who may be at higher risk of getting stuck in a cycle of debt. Such installment loans for weapons drew heightened scrutiny after the Uvalde, Texas, school shooter was found to have purchased a gun manufactured by Daniel Defense, which offers financing plans through Credova Financial LLC. The company told Bloomberg that it didn’t finance the gunman’s purchase of firearms.
Read more: Gun Sellers Push Quick Buy Now, Pay Later Financing
Last year, lawmakers, including Larson, sent questions to Credova expressing “strong concern” over its financing and marketing of online firearm purchases.
Still, Credova has filled a void in the gun financing space as most other BNPL companies like Affirm Holdings Inc., Klarna Bank and Afterpay won’t touch firearms. Gun dealers using Credova financing have advertised to potential buyers with slogans such as “shoot now pay later” and “get protected now, pay later.” Some of Credova’s offers were costly. In one instance, a $415 Glock G44 cost a borrower more than $1,100 after a lease was paid off. That financing wasn’t structured as a “pay-in-four loan,” which Credova introduced last summer.
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