The buy now, pay later (BNPL) industry — an increasingly important driver of retail sales — could face new rules as D.C. scrutiny builds, Axios' Lucinda Shen and Hope King write.

Driving the news: The Consumer Financial Protection Bureau is peering into the data collection policies of Affirm, Afterpay, Klarna, PayPal and Zip — a few of the most notable players in the BNPL industry.

The review is "a first step toward having a full picture of the BNPL market," Laura Udis, the CFPB's small-dollar, marketplace and installment lending program manager, tells Axios.

Why it matters: The CFPB is concerned these platforms may encourage overspending and dodge existing regulations around credit and lending. It also plans to examine data collection practices.

• Billions of investor dollars are potentially at stake: Just last year, Square (now Block) paid about $29 billion to buy Afterpay.

How it works: Consumers can qualify and get approved for BNPL purchases much faster than for a new credit card, and they can take home the product before fully paying it off — typically through installments with little to no interest or fees.

• Like credit card companies, BNPL platforms charge stores a percentage or flat fee for each sale.

State of play: Major retailers like Walmart, Target, Amazon, Nike and Nordstrom, as well as a growing number of smaller businesses, offer BNPL as a way to break up purchases into multiple installments.

• The payment option has helped drive $97 billion in e-commerce sales in 2020, according to research from payments giant Worldpay — and it’s growing fast. The same study estimates BNPL will grow from 2.1% of 2020 global e-commerce transactions to 4.2% by 2024. 

At this stage, the CFPB is requesting data (due March 1) to better understand the benefits and downsides of this fast-growing model, for which public data is scant since many of the providers are privately owned.

The big question: How the agency acts on this information — though that could take months or even years to materialize.

• "It is certainly possible that we could as a result of the data collection take enforcement action… we might issue advisories or guidelines, but that’s really premature and sort of putting the cart before the horse," says Udis.

What they’re saying: BNPL companies say they are prepared to work with regulators.

• “We believe proportionate regulation is a good thing,” a representative for Klarna wrote in an emailed statement.

The bottom line: The CFPB's move comes at a time when the agency has shown that it has more teeth than it did under President Trump — and it's signaling that BNPL is not flying under the radar.

Go deeper.

WeWork founder and former CEO Adam Neumann’s latest venture involves scooping up apartment buildings across the country in a bid to shake up the rental-housing industry. (WSJ)

California determined that PG&E power lines are at fault for igniting last year’s Dixie Fire, which burned nearly 1 million acres to become the second-largest wildfire in the state’s history. (LA Times)

Canada violated terms of its trade deal with the U.S. and will be forced to end tariffs on U.S. dairy products, a dispute resolution panel has ruled. (WSJ)

Sometimes companies fire workers. Other times workers fire companies — and that's what happened to a stunning degree in 2021, Axios' Neil Irwin writes.

Driving the news: Government data published yesterday showed that a record-high 4.5 million Americans quit their jobs in November.

• The flip side of that is that employers were not firing people. Only 1.37 million workers were laid off or otherwise discharged, well below levels in the strong pre-pandemic economy.

Why it matters: Right now, employers are loath to dismiss their workers, knowing how hard it will be to replace them. That tilts the job market toward labor.

Go deeper: A different way to capture who has the power in the job market is to look at the ratio of people who quit their job to those who were discharged involuntarily. Aaron Sojourner, a labor economist at the University of Minnesota, calls this the "labor leverage ratio."

• This ratio hit an extraordinary 3.31 in November, higher than it has been in the two decades of government data. Translation: More than three times as many workers quit their job as were fired.

The big picture: Even in previous strong job markets, this measure never reached anywhere close to these levels. It had only exceeded 2 for three months in early 2019. In the booming job market of December 2000, it was a mere 1.43.

• "I like building the measure around job separations, a high-stakes, cleanly-measured concept," Sojourner tells Axios. "When workers' outside options improve, quits rise. When employers' improve, discharges rise. When workers' improve faster than employers', the ratio rises."

The bottom line: The Great Resignation is real and ongoing — and the flip side is employers doing everything they can to hold on to their workers.

2021 was a record year for much of the financial markets — but bankruptcies were a notable exception.

• Bankruptcy filings for both individuals and companies were far lower than 2020’s activity, and remain below pre-pandemic levels, according to new data from Epiq Bankruptcy, a provider of data, technology and services.

Why it matters: The historic stimulus pumped into the economy in the wake of the pandemic has helped keep both consumers and companies afloat.

• That might be bad news for bankruptcy practitioners and distressed investors — but it represents a lifeline for people who lost jobs and companies that lost customers.

Of note: The Chapter 11 stats include a new category called Subchapter 5, which accommodates smaller businesses and went into effect in 2020. Despite that, 2021 volumes are well below those of the late teens.

State of play: For companies, "there is so much capital available in the market ... preventing what historically would have been more corporate filings," Chris Kruse, senior vice president at Epiq Bankruptcy.

What to watch: As the impact of stimulus payments wanes, individuals' bankruptcies may tick back up.

• "There is a growing belief that a large backlog of individual filings is growing ... they will hit at some point as the economy normalizes," Kruse says.

For today’s investors, the latest jackpot idea might be sandwiched between cat videos and political snark on social media.

• About 60% of Gen Z and millennial investors have made an investment as a result of social media, according to a new survey out today from M1 Financial.

State of play: Those most likely to act on social media tips are younger, short-term investors who are less financially stable, the survey shows.

• “It is almost impossible to scroll through social media or watch the news without hearing about someone hitting the jackpot through the latest meme stock or cryptocurrency,” Brian Barnes, M1 Finance CEO and founder, says in the release.

Reality check: Barnes notes that despite the ubiquity of get-rich-quick ideas that proliferate on social media, a sizable cohort of investors remains long-term focused.

The bottom line: Maybe it’s more surprising that 40% of Gen Z and millennial investors haven’t invested based on social media tips.