U.S. lawmakers seek answers from fintech on buy now/pay later gun sales

A group of 18 U.S. representatives is demanding Credova Financial LLC answer questions about its no-interest financing options for the purchase of guns and ammunition.

In a letter Monday to Credova Chief Financial Officer Dusty Wunderlich, the lawmakers said they are expressing their "strong concern" and seeking information about the provision and marketing of buy now, pay later financing for online purchases of firearms and related accessories.

Bing Guan/Bloomberg

The representatives want to know what safeguards Credova has in place to stop potential customers who are prohibited from possessing guns or who have a record for criminal activity from using the company's services to buy firearms. They also want to know if Credova has information on whether customers who have purchased guns using the company's financing commit unlawful acts of violence, including in recent high-profile massacres such as in Uvalde, Texas. Other questions among the 15 listed in the letter include queries about how many customers default on their payments and what kind of disclosures Credova offers consumers.

Credova, a 4-year-old startup based in Bozeman, Montana, is part of a burgeoning 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 with young people to spontaneously purchase discretionary items such as clothes and cosmetics. Bloomberg highlighted in May how Credova is different from most other BNPL companies because it embraces gun sales, alongside other sporting goods. Most of the biggest companies in the BNPL business, including Affirm Holdings, Afterpay, Klarna Bank and Zip, don't finance guns. Wunderlich has described Credova's mission as making it easier to finance gun 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 about consumers taking on debt too easily, but its emergence in gun retailing also has public-health implications. Mass shootings in Uvalde and Highland Park, Illinois, have called attention to how easy it is to legally buy guns in the U.S., though neither incident has been linked to BNPL financing. 

The letter noted that Credova's retail partners are online gun merchants whose websites "prominently highlight the convenience and benefits associated with Credova BNPL, including 'approval in seconds,' 'no impact to your credit score,' '$0 down,' and '3 Months Interest Free.'" They also market 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 proponents of 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 requested written responses from the company by Sept. 26.