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Hello and welcome to another episode of the out Thoughts podcast. I'm Tracy Alloway.
And I'm Joe. Why isn't thal Joe?
I have a confession to make. Yeah, I do a lot of online shopping, like a lot more than is healthy.
Probably more than I realized from looking over your shoulder in the office and asking you what you're looking up, because I do do that and you never like it.
But I still do know because sometimes I am, in fact shopping online in the office. But a few years ago I noticed a phenomenon, a change when it came to online shopping. You know what that was, I can guess, yeah, all right, all of a sudden, whenever I was checking out, you would get an offer, a little button usually that would say do you want to take a buy now pay later option? And usually it's with a company like Klarna or a firm or something like that. They're everywhere now.
So, like I've certainly seen all these buttons, I've never used it. I don't really know why I haven't, because like, why shouldn't I spread out? Why shouldn't I?
Like for real?
Like my understanding is that the core of the business model works is that there's no like formal interest, right, so if you make one hundred dollars purchase, you get to spread it out, say in four payments of twenty five dollars, and so whether it's one hundred dollars right now or one hundred dollars and four months, it's the same from the end buyer, which, of course in theory because there's a.
Time value of money, is not intuitive.
But the idea is that the retailer implicitly pays the interest because it's a form of customer acquisition, and so the retailer is implicitly willing to take one hundred dollars or whatever over x period of time rather than all at once in exchange for essentially making it easier for
customers to buy. But from the customer person like you were me, who presumably have the money to make to buy what we're purchasing, I still don't get why we don't all use buy now, pay later, because why not spread out our purchases further out into the future.
You know how Rebel Wilson described it in a firm commercial.
I didn't. I don't. I haven't seen it.
Like eating a tub of ice cream, but spreading out the calories.
Over four weeks exactly, why don't.
It's still six hundred calories, right, that's the issue. But I think, okay, so this is obviously a nuanced subject. Yes, so clearly zero percent interest doesn't sound like a problem. But obviously if you fail to pay, you pay a penalty.
Then the penalties are building, right.
So there's that. But the other issue with some of these buy now, pay later items, and it's really interesting. I kind of think about this as a parallel to the private market and credit. So this idea that there's this like whole world of additional credit or leverage that we don't actually have very good data on, and that is growing, right. I think that is the key.
So here's how I see the issue, which is that if I could have a tub of ice cream and it spread out the calories over four months.
I would certainly do that.
That sounds pretty great because I burn a certain number of calories in the day, and so if I had four months to burn them that that would be far more efficient. But the flip side is, well, I would eat more ice cream, so I would eat four times. I would eat four times as many tubs of ice cream in that given day, knowing that I have this
four month calorie budget. And so then you still get the question of like, Okay, maybe there's not a formal interest, or maybe there's penalties, but I'm buying a lot more with today's buying power, and that may still yet prove to be unsustainable to the end consumer, even if it doesn't formally. Clock is what we measure as consumer debt.
Here's the added layer. Let's say you're trying to lose weight or trying to be healthy, and you have like a dietician. Imagine eating the ice cream, but him never knowing that you're eating the ice cream, right, Like, this is.
Well, I lied to my doctors all the time. I mean, I'm used to that. Okay, all right.
Rather than us debate this, we do in fact.
How much didn't you well, you know, like once a week, I like go through a three milligram Think I did actually quit?
And I'm saying that told me this morning you said you were not going to have any more zins for the restaurant, and I think I would take the opposite side of that bet. But now you've committed in public, public best, So we'll see how it goes. Okay, rather than us talk about this, we do, in fact have the perfect guest. We're going to be speaking with Julie Morgan.
She is a president of the Century Foundation, formerly at the Consumer Financial Protection Bureau of the CFPB, where she thought a lot about the buy now, pay later phenomenon. So we're going to get some of her thoughts right now. Julie, welcome to the show.
Thank you. I'm so excited to be here.
So how did this happen? Like, how did this business model actually come about? Because it felt very sudden to me, But on the other hand, I was outside of the US for a long time, so maybe it was quite gradual.
I'm really excited to answer this question for a number of reasons, including the way that you all introduced this, because you spent a lot of time talking about BUYEOW pay leader as this pay in for zero interest maybe like no fee or low feed model, and we did see that model arise during the pandemic and become a much more assalient part of the way consumers were paying for goods during the pandemic. And so if I could take you back to kind of those early years at
the CFPB. Where we're coming out of the pandemic, we're seeing this rise in buy now pay lead. You know, regulators and researchers started to investigate this to understand what it meant for consumers and what the risks were. And I think there were kind of two fundamental assumptions about buyeow pay leader at that time. One was just what we said, it's a pay in for no interest, low or no fee model. And then two people were using this in kind of the like what I think of
as a stereotypical gen Z kind of way. They were using it to finance a purchase that was slightly larger or more extravagant than what they would have bought, and it was usually on something like a purse or an item of clothing. What we've found over time is that both of those assumptions turned out to be wrong. Right, So number one, what we're seeing right now as buy now, pay later and calling by now pay lead is not in fact always that pay in for no interest product.
And in fact, many of the companies that we associate with buy now pay lead, like a firm or Klarna, are mostly not offering that product. So a firm says that product is only twenty percent of their business. The rest of their business is what I would think of as like a point of sale loans or short term installment loans with interest rates ranging from you know, ten to thirty percent and terms that range from thirty days to six or eighteen months.
So it's buy now, pay later, but it's more like just a formal loan.
Yeah, I mean it's.
Payment and installment and there's a schedule, but also there is a nominal interest rate that's visible.
To the consumer exactly, and I think it is by now, pay later, in the sense that any loan, including your mortgage, yes, buy now, pay later. Right. So they've kind of kept this marketing that I think was really appealing to consumers and that sort of soothed regulators that these products were fairly low risk, and then started shifting that into these products that look very different.
Okay, whether we're talking about the new products or the sort of the traditional BNPL the way Tracy and I described it in the beginning. Currently, what kind of collection of data like when that happened? So we know, like credit card data gets collected. There's public statistics about just the sheer volume of credit cards what do we have right now in terms of where this gets slotted and how it's collected as data.
Yeah, we don't have a ton. So we have a couple of different ways of looking at buy now, Pay later. Most of it is through government sources, So the Federal Reserve and the CFPB have the ability to pull data from the companies, and if you look at the CFPB's reports on buy now, Pay Later, that is what they're doing. They're pulling transaction level data through market monitoring orders.
That's not but when you say market monitoring orders, just to be clear, the companies are compelled to regularly update the CFPB with some level of data.
They're compelled to provide data. The regularly piece is not part of it. So this tends to be a one off, right. We don't have a consistent stream of data coming from the companies, and so that gives us like a small window into what's happening in the buyout pay latter space,
but it's really not enough. And then we have survey data, and that's where you see lending Tree and Axios and others asking consumers, and I think it's important to understand that they are you're just kind of getting what the consumer thinks they have, and it's it really inhibits our ability to get at are you using paying for are you paying interest? And all those things?
How does buy now Pay later fit into private credit scores like FICO?
Right?
Because I imagine you know, if you're applying to a bank, they're going to look at your FICO score if you want something like a mortgage. And even though buying now Pay later seems to be for mostly smaller items at the moment, so maybe you owe like a couple hundred or something via a firm, maybe you also owe a few thousand via Klarna, right, And I imagine if you're a bank using Fyco scores, you would want to know that information.
Yeah, so we don't know this information right now. Fico announced recently that they plan to start using buy now, Pay Later as part of their scoring model, and we've seen the companies be extraordinarily resistant to that. So Clarnet and others are saying that they're not going to turn over data until they get certain assurances from Fyco about
how that data is going to be used. So what we have right now is kind of snapshots in time to understand how people are stacking, you know, buy Nowpay Later on top of credit card debt and on top of other products. And the research that we have there, which is somewhat limited, does suggest that people are stacking this, you know. It tells us that about sixty percent of the people who are using buy now Pay Later have a SubTime credit score. It tells us that they are
mostly using it on top of credit card debt. And it's also suggesting that before people take on buy now pay Leader, there's a slight uptick in their use of their credit cards. So there's a suggestion that it's really like you're maxing out one form of debt and then taking on another.
I just looked up the Q two New York Fed Household Debt Report.
I think it just came out a few days ago. I must've it's Q two anyway.
It says there's one point two to one trillion in total credit card balances outstanding. Do we have something that we have a guess for what is the number of BNPL loans of any form currently outstanding, so that we can benchmark that against credit cards.
We have numbers that are reported by the companies. We don't have data that is reported by a government. So just like that, I think that the best we have is that the transaction volume is around one hundred and sixteen billion, and that's up from about thirteen point eight billion in twenty twenty, so this is growing pretty rapidly.
So it's it's a non zero. I mean, it's not like clear like still like a fraction of credit cards, but this is beyond the rounding air, that's right, Okay.
Do we have any sense of how usage patterns have changed? So for instance, you know, during the pandemic, did we see an uptick in buy now, pay later use as people were struggling because they didn't have jobs or had short term cash flow issues? Has it come down since then?
We're seeing an uptick in people's use of bineopi lator, and we're seeing shifting patterns of what they're using it to purchase. So I think I said earlier that there was this assumption that people were using this to purchase clothing or other kind of luxury goods. And you know, even back in twenty twenty two when the CFPB put out its first report here, we saw that that wasn't true. People were using bunopaylator for things like groceries and education costs.
The surveys that have come out recently showed that that's growing. So there was I think in an Axio survey and a lending Tree survey, they showed somewhere between fourteen and twenty five percent of bineopay lator users are using it
to purchase groceries. They're showing that a bigger percentage of people are using binopulator for medical and dental costs than for the things people might assume stereotypically it's used for, like dining out or ordering in, or even like purchasing concert tickets and things like that.
Is it bad?
I mean, like, you know, it seems like people are using buy o pay later for dental or they're using it for groceries or whatever, and like, you know, the idea that people are obviously stressed and have to spread out or borrow money to make those purchases is obviously I guess there's an inherent angst about that because these
are human essentials. But is it really per se bad or is it just like no, this is like yet another tool that people have to sort of you know, smooth consumption and so forth.
I think it's bad that we're seeing an uptick in the use of credit products to pay for essentials. That's not to say that buy now, pay later is particularly the enemy there, but you know, this is part of the reason I've been interested in consumer credit overall is that, you know, we see these broader changes go on in
the policy space. In particular, recently, we've seen Donald Trump and Republicans in Congress push through a bill that cuts Medicaid, cuts food assistance, you know, makes education more expensive, and the availability of consumer credit products that are kind of waiting in the wings there blents our ability to really
understand what those changes mean. So, you know, we know that the Medicaid cuts will result in people having more expensive health care, but we need to be looking at the fact that that's going to result in buy now, pay later loans, It's going to be an opportunity for medical credit cards from places like Synchrony with per credit,
and so it's relevant to our overall economic situation. It's relevant to the kind of like what I think is like a silent financial crisis that's happening for the vast majority of families in the United States, but it's not tracked. You know, we've been talking about buy now, Pay later really not being tracked, but the overall sort of like consumer credit conditions for families are really not tracked and
talked about in that way. We see economists going on TV talking about consumption and CPI and GDP, where families are kind of sitting around the kitchen table talking about Klarna and a firm and Sally May and Abvian.
When you were at the CFPB, how are you thinking about buy now, Pay Later from a sort of regulatory perspective.
Yeah, so we were looking at the risks of the products, and then we were kind of trying to look you know, we've had this phenomenon with consumer credit products across the board, not just specific to buy now, Pay Later, but it was really evident at CFPB that you have these sort of like new entrants into a market whose products are framed very differently than a traditional consumer credit product, and
it's often part of the marketing pitch. It's like we're not alone, we're not equity, We're this totally different thing, and it preys on consumers hesitants to use debt. And then also you know this idea that we might float above any regulatory scheme, so for buying out, pay lead and for these other products like earned wage access or
income share agreements. You know, we were looking at like what is this under the law, and with buying now pay later, particularly the products like where Klarna or a firm is offering basically like a digital or physical card where you can make repeated purchases where you have a you know, an overall lit It starts to sound like a credit card, right, And so you know, cfhobe's initial approach on regulation here was to really just say, like, you've got to follow some of the fundamental basics that
apply to the product that you are, right, And so that was really meant to help people with some of the real kind of basic consumer protections around managing disputes and getting accurate billing statements. The other thing CFPP was doing was on the enforcement and supervision side, so really taking a look at these companies the same way we do any other financial institution and making sure they're following
the law. And I think it's important to talk about that piece because we've seen the Trump administration pull back on the proposed regulations, but we've also seen them pull back on enforcement. They specifically said they would deprioritize by now, pay later in enforcement, and so there are these other
real basics that we're seeing fall apart. You know, if you look at what consumers are complaining about right now, they're saying, I had auto pay on my you know, my Clarina or my after pay and I tried to take it off and the company continues to charge me. These are like really basic questions of whether the companies are falling consumer financial laws and you know cfpps just off the job.
So you mentioned that in the research, prior to someone beginning to use BNPL, increase in their credit card usage, right, why does someone flip over? Like why doesn't so some of these purchases. What is insufficient about the existing credit card system? Is it that they're hitting their credit limits or what is the situation such that then BNPL becomes more attractive.
Yeah, I think we need to take a deeper look at credit utilization because I do think there are people who are flipping over and they're using their available credit balance and then they're shifting to bind a pay leader. But I think there are a lot of other people who are just trying to juggle their essentials, you know, their groceries, and their kids back to school clothes, and they're doing it through whatever feels like the most convenient
payment method. So the buy now pay lead companies have made a real effort at being that convenient payment method, both through kind of point of sale but also through their apps. So they're pushing their users towards an app that both makes it more convenience to make the payment but also pushes you advertisements for different products. And so I think we see people brought in there. But you mentioned earlier why you don't use buye now Pay later,
And I do think it's important to great question. We could do a half hour on your personal finances, but I think it's important to know that even while there's a big percentage of people using this to cover basics, there is kind of a split in buy now pay lead where if you talk to consultants who look at this really closely, they're seeing people like you or I
who can I'm making an assumption about your finances get paid. Well, okay, you know about like you or I who can make a purchase, but it's a painful purchase, you know, maybe it's like a new television or something that you just don't want to pay upfront, so there are people using it in that way too interesting.
You mentioned ease of use, and I think this is really key. What are the conversations like with retailers, So like, what's the pitch that buy now, pay later platforms are going to make to I don't know, a Walmart or whoever to kind of plug directly into their websites.
Yeah, so the pitch is basically basket size is and then overall transaction volume. Right, So they're showing that they're getting the retailers about ten percent more in terms of the basket size, so the amount of things that people are purchasing, and then some of the companies are reporting up to eighty percent more in terms of the actual transaction.
So that's pretty significant for retailers, and I think it is what is propelling retailers to cut deals with Klarna or after pay and to pay the costs which are higher than interchange on a credit card. So in many cases, you know, we're looking at costs that are somewhere between one to eight percent of the transaction, plus like a flat fee that might be like thirty cents per transaction.
So it's pretty significant. I think the other part of the pitch is and this is this is one of the pieces that was really kind of consuming a lot of our attention at CFB is the ability to use people's data to drive those purchases. So I think if you're a merchant looking at those big fees, if you're a Walmart or Amazon or Whoe or you're not just saying like, let me put this in Klarna or a firm's hands to hope that people use it more, but let me use the data I have on hand to
try to drive more purchases. And like a company that has a lot of information about what I like to buy and a lot of information about how much money I have to do it has like a pretty potent set of data to help drive those purchases. So I think that's part of the appeal for emergents as well.
Do we have a way of essentially measuring from the consumer's perspective a sort of like for like interest rate that they payment because as you described, like in some cases they're clear right, in some cases they're more embedded because it's free for four months, but then there's like
a penalty. In some instances, it's this thing that looks like a credit card, but maybe structurally there's a different way of getting from point A to point B, Like can we measure like, okay, if this were a credit card payment with a fifteen percent rate, this is the apples to apples compared you're paying eighteen percent or twelve percent?
Like, are we able to are you able to do that?
Me personally, I'm not able to do that. But you know at the CFPV we did do that on certain products. We didn't do that for buying now pay later in many cases because the products we were studying had almost no cost, right, they were no interest in, no fee. Maybe they had a late fee that might kick in, but remember where they're requiring auto payments, which most of the companies are, those late fees are less likely to
be incurred. But I think the sort of relevant thing is to understand how much people are paying overall in access, fees and interest for the goods and services that they need. And that's incredibly difficult to do because these companies are sort of layering these different products. So you have a credit card with a set interest rate, but you might be incurring debt on a number of different products across multiple band pail providers. That each have different terms and
different costs, so it's really difficult. It's difficult for us to understand from a research perspective, it's even more difficult for a consumer, I think, to make those choices in those trade offs.
Just going back to the data aspect of those for a second, you said that some of the platforms are reluctant to report to FYCO and are asking for certain assurances. What exactly do they want here?
I mean, I've looked into this question. They haven't been super clear I think about what they want. They've sort of made some general statements that they want to make sure that you reporting this data won't be used negatively to affect people. I mean, this is really just my speculation.
But what I think is really interesting about this is the companies are playing on this kind of broader skepticism about credit reporting and FYCO overall, because I think, you know people's experience and certainly what we saw in the research at CFPP is that credit reporting has predominantly been used to ding people and to coerce them into making payments they might not want to make. So like medical
debt is a great example of that. Cfb's research showed it really had no value for the fundamental purpose of credit reporting, which is evaluating people's ability to repay, and it was mostly being used to course. So when Klarna says, you know, we want to make sure this isn't used to ding people, that feels very noble. But I think at the end of the day we should be kind of skeptical of why they don't want to report.
Explain this further about medical debt and would you say it has no value? But also it's been used to course, what are the conditions with medical debt and FYCO.
Yeah, So we looked at medical debt and credit reporting really closely at CFPB, and what we saw was that it didn't have predictive value. So medical debt was not predictive of whether you would repay other types of debt. And part of the reason is that a lot of medical debt that is reported on people's credit reports is
inaccurate in one way or another. You know, it might be that the debt collector is going after you for a debt that is larger than what you think you pay because you think your insurance company ought to have paid. It might be that you actually already paid the debt and that information hasn't gotten to the debt collector, so it's really kind of this junk data that's sitting on people's credit reports.
And then explain the coercion element, like how does it so medical debt isn't a good predictor of someone's ability to pay a future loan, so it's not great for that. And yet what it's still like people because it affects their credit card scorers, feel this extra pressure to pay it. Like explain sort of like the effect on the patient in this case.
Yeah, exactly. So the constituency that wants medical debt on your credit reports is primarily third party debt collectors. And why do they want that there? They want it there so that they can call you and say, you know, this is going to be this debt or it's going to hurt your credit. And I think at CFB we tried to spend a lot of time thinking this through from the consumer perspective and what that feels like.
So actually I was not familiar with that at all. But just to go further, is this, like I hadn't really thought about the sort of behind the scenes fight of what does and doesn't go into a fight though but obviously that's very intuitive. Is this like a common thing across a range of either formal debt products or quasi debt products, where they're all like sort of jocking either to be in or out of the calculation basket.
I mean, I think it is. The medical debt is a thing because see if he be made it a thing. I don't think we have enough research on what is or isn't on your credit report and why. But when regulators start to pick those fights, yeah, you start to get this jocking for what's on there. I think student debt is another good example where there are legitimate quessions of what ought to and not not be on there.
And some of it is about the predictive value, but a lot of it is about putting debt on people's credit reports that we know is inaccurate.
It is true that every few years we see like these efforts from private companies I guess, to try to augment credit scores with new technology. So I remember very clearly being at a startup's offices in San Francisco in like I guess it would have been twenty fifteen or something, and they were walking me through the data that they
could use to make short term loans. And one of the things they were talking about was like just the basic cursor movement on the screen, like how fast you click the button to get money, whether or not you know, if it's a sliding bar that goes from like one thousand dollars to ten thousand dollars, Like whether or not you hesitate to go to ten thousand and then go
back and then go back to ten thousand again. It seemed very dystopian to me, And I'm curious what those efforts are like right now given the new emphasis on AI and maybe you know, even more data that is now available to private companies to look at to try to judge whether people are credit worthy or not.
Yeah, if you listen to the earnings calls where CEOs are talking to investors about their underwriting models for a variety of different products, whether it's kind of traditional credit cards or things like bnpl ai comes up a lot. You know, everybody sort of wants to say that they've got this proprietary am that's exactly it.
Yeah, they were saying the same thing ten years ago. Yeah.
Yeah, And I think there's a lot of things to unpack there and to be concerned about so I think we should You know, we know that AI models often bake in racial biases, so we know that there's some concern there about these models, you know. But I also think to your point there, we're dragging in a lot of extraneous data about people into the way we look at their credit worthiness, some of which should be relevant,
some of which really should not. And what I think is most important to think about there is that those models are completely opaque, and company is often when they're faced with regulatory scrutiny say kind of like the AI did it right, as though the people at the companies are not responsible for the outcomes of the technology. So you know, under the Biden administration, the approach there had
really been to say you're responsible. It sounds so basic, but the laws are the laws, whether it's about consumer protection or about you know, basic discrimination among credit applicants, the laws are the laws, and you're responsible for the outcomes of those models. And I think that shift is or that kind of approach is really really important here to drive some accountability, because otherwise it does kind of get out of hands.
So I mentioned in the intro that the parallel that I reach for when thinking about buy Now, Pay Later is sort of private credit. So this idea that you know, it's a more opaque market and people are worried about its size, and they're worried about transparency and hidden leverage and all of that. But on the other hand, you know, it is an extra credit bigot that companies can tap in times of emergency, and we certainly saw that over
the past five years or so. Net net. When you look at buy now, Pay Later, would you say the effects are good, more good or more bad? This is a tough one.
It is a really tough one because I don't I said this earlier. I don't want to single out buy Now Pay Later as the bad guy here. I think, first of all, there are a lot of bad guys.
There are a lot of good guys too. But you know, I think the thing to really focus on is, like we're in what the Trump administration is describing as like a relatively good economy, and we're sitting here talking about like turning on this pigot for these kind of like new and interesting types of debt to help people handle
really basic expenses. That seems like a problem we should not be in an emergency situation and yet we are, and so I'm concerned that that availability of these credit products is obscuring, like the kind of growing emergency around people's cost of living, which often you know in the news is about their grocery prices, the eggs, their sneakers for back to school, and those are really important, but it's also their healthcare, the cost of college, being able
to retire. So families are feeling really squeezed, and you know, to me, the most important thing there is like where I think we're seeing the Trump administration sort of test out this theory that they can keep the high level metrics of whether the economy is on track, steady or growing while letting somewhere around sixty percent of people have these private financial crises. We're going to see that play out over the next couple of years. And so that's
that's the way I think about these. It's not really like is the individual one good, but it's like, do you know what we're doing overall? And is anyone doing the math? All right?
Julian Morgan, thank you so much for coming on all thoughts really appreciated.
Thank you, thanks for having me.
Joe. I'm glad we finally did that episode We've been talking about doing one on BNPL for a while. BNPL. It always reminds me of like it sounds like BNP Paribo's like Italian subsidiary or something. But there are a bunch of things to pick out there. I mean, number one, it's clearly a nuanced issue, yeah right, and like clearly, as you laid out in the intro, it can have
a smoothing effect. The second thing that always seems to come up is this idea that like, well, it's not that big now, right, Like it's not big enough to have an effect right now. But as Julie mentioned, we are seeing, you know, volumes slowly pick up, and I guess slowly, not that slowly, Yeah, yeah, right, And I guess like I kind of wonder what happens like as more and more of this activity actually stretches into services forus goods, like that seems to be quite a big shift.
Well, I'd say, like, I think Julie's last point is very relevant, which is like, you know, when we think about household borrowing, and again probably you and I because we're sort of children of or you know, grew up during the financial crisis, you know, we sort of think about like.
We weren't children, No, we're children, But.
You know what I'm saying, Yeah, you know, I think you and I often think about credit from the effects of defaults and so forth, and that could be an effect,
and that's not something to be dismissed. But the other idea is like how much of like sort of like aggregate economic conditions consumption is sort of debt financed and in a way that we can't like fully measure, right, because we comfort we can measure credit card dead and so we have some sense of credit card dead is the size of incomes or whatever, But if there's this other rapidly growing source and it's pretty crucial for like sort of keeping the headline figures of consumption or GDP,
you know, like my conclusion or like my sense it's like, yeah, it's not that huge yet, but it's definitely not nothing, and it's definitely not you know, it's bigger than.
A rounding air, right, And it certainly says something to Julia's point about like the state of the average American consumer who probably is struggling to pay something like dental fees.
Yeah, yeah, no, and like the fact in like, you know, I think there's I thought it was interesting too that like maybe both of us are least just me had a certain.
Maybe already outdated view of what BNPL is.
Oh yeah, because like the idea of like I'm going to polize that they have like actual apps, yees.
So the idea that like, oh, I'm going to buy a television that's a thousand dollars and make it like four two hundred and fifty dollars purchases, like that sounds great. Should I should be doing this? But if that's just sort of like on business model, but that there's like this growing business model that looks more like installment loans where there is a formal interest rate, but it also sort of looks like the same thing and you also
get a card, et cetera. But it's just like a slightly different structure, and formerly it isn't called debt or isn't categorized or is it reported as debt than then I think obviously we need to continue to get a better handle on you know.
How big this is. Yeah.
Absolutely, Also Klarna says it's a bank now, which is kind of confusing.
Yeah, it's like the hottest thing everyone wants everyone for bank charters these days.
Oh yeah, that would be interesting to look at because we went after the financial crisis, speaking of two thousand and eight, we went years and years in brand.
Everyone, so every like every random brokerage or fine, we got a bank charter. We acquired a company that has a bank charter.
Time is a flat circle show? Yeah, all right, shall we leave it there.
Let's leave it there.
This has been another episode of the Odd Thoughts podcast. I'm Tracy Alloway. You can follow me at Tracy Alloway.
And I'm Jill Wisenthal. You can follow me at the Stalwart.
Follow our guest Julie Morgan, She's at Jay Margetta, follow our producers and Rodriguez at Carmen armand Dashel Bennett at dashbod and Kale Brooks and Kale Brooks. For more Odd Lots content, go to Bloomberg dot com slash odd Lots. We have a daily newsletter and all of our episodes, and you can chat about all of these topics twenty four to seven in our discord Discord dot gg slash odlocks.
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