US Lawmakers Seek Fintech Answers on Buy Now, Pay Later Arms Sales
(Bloomberg) — A group of 18 U.S. representatives is demanding that Credova Financial LLC answer questions about its interest-free financing options for weapons and ammunition purchases.
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In a letter Monday to Credova’s chief financial officer Dusty Wunderlich, the lawmakers said they express their “strong concern” and are seeking information about the offering and marketing of buy-now, pay-later financing for online purchases of firearms and related accessories.
The representatives want to know what security measures Credova has in place to stop potential customers who are prohibited from possessing weapons or who have a history of criminal activity from using the company’s services to purchase firearms. They also want to know whether Credova has information about whether customers who have purchased weapons using company financing are committing illegal acts of violence, including in recent high-profile massacres such as in Uvalde, Texas. Other questions among the 15 listed in the letter include questions about how many customers default on their payments and what kind of information Credova offers consumers.
Credova, a four-year-old startup based in Bozeman, Montana, is part of a growing group of companies offering a financing alternative to credit cards. The BNPL concept allows buyers to pay for a purchase in a few monthly installments without accruing interest, and is particularly popular among young people to spontaneously buy discretionary items such as clothes and cosmetics. Bloomberg highlighted in May how Credova is different from most other BNPL companies because it embraces arms sales, along with other sporting goods. Most of the largest companies in the BNPL industry, including Affirm Holdings Inc., Afterpay Ltd., Klarna Bank and Zip, do not finance arms. Wunderlich has described Credova’s mission as making it easier to finance weapons purchases.
Read more about how Credova makes it easy to finance firearms
The lawmakers noted that the Task Force on Financial Technology of the House Financial Services Committee is already examining the risks and benefits associated with BNPL products in general.
BNPL’s popularity has raised concerns that consumers are taking on debt too easily, but the rise of the arms trade also has implications for public health. Mass shootings in Uvalde and Highland Park, Illinois, have drawn attention to how easy it is to legally buy guns in the US, although neither incident has been linked to BNPL funding.
The letter noted that Credova’s retail partners are online gun dealers whose websites “prominently highlight the convenience and benefits associated with Credova BNPL, including ‘Approval in Seconds,’ ‘No Impact on Your Credit Score,’ ‘$0 Down,’ and ‘3 Months Interest Free.'” They also markets Credova’s services using dangerous terminology, such as “shoot now, pay later” or “get protected now, pay later” to finance a “dream gun”.
Among the lawmakers who signed the letter are Democrats who have been vocal advocates for gun safety, including Stephen Lynch of Massachusetts, Carolyn Maloney of New York, John Larson of Connecticut and Al Green of Texas and Alma Adams of North Carolina. They asked for written answers from the company by September 26.
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