On September 9, 2022, the California Department of Financial Protection & Innovation (the “DFPI”) released a Notice of Proposed Rulemaking Action that proposes to adopt regulations implementing the Student Loan Servicing Act (section 28100, et seq.) and the Student Loans: Borrower Rights Law (Civil Code section 1788.100, et seq.). … Continue Reading
income share agreement
This week’s podcast: What will 2022 hold for fintechs in the consumer financial services industry—a discussion with special guest Todd Baker, Senior Fellow at the Richman Center for Business, Law & Public Policy at Columbia University
Rising interest rates and inflation are two key factors that are expected to create a more challenging business environment in 2022. Based on his work at the intersection of technology and financial services, Todd shares his perspective on how this new environment is likely to impact providers of various types of consumer financial services, particularly non-bank fintech companies. We… Continue Reading
CFPB Alleges Income Share Agreements are Extensions of Credit in Results-Oriented Enforcement Action against ISA Originator
By Heather S. Klein, John L. Culhane, Jr. & Ballard CFS Group on
(Ballard Spahr will hold a webinar on 9/21 at 3pm ET, “The Path Forward for Income Share Agreements.” Register online here.)
The CFPB issued a consent order against an income share agreement (ISA) provider, Better Future Forward (BFF), in which it concluded that BFF’s ISAs are extensions of credit under the Consumer Financial Protection Act and Truth in Lending Act and are “private education loans” under TILA. … Continue Reading
Illinois enacts law to fund income share agreements; distinguishes them from loans
By John L. Culhane, Jr. on
Posted in Regulatory and Enforcement, Student Loans
Illinois’ Democratic legislature recently passed, and its progressive Democratic Governor, J.B. Pritzker, recently signed into law, the Student Investment Account Act, which establishes a Student Investment Account to be maintained by the state’s Treasurer. Pursuant to the Act, the Treasurer can allocate up to 5% of the state’s Investment Portfolio to that Account, an amount that would appear to be approximately $1.5 billion based on the state’s 2018 annual report. … Continue Reading
Bipartisan bill introduced to create legal framework for income share agreements
By John L. Culhane, Jr. on
Posted in Regulatory and Enforcement, Student Loans
A bipartisan group of U.S. Senators have introduced the “ISA Student Protection Act of 2019” that would create a legal framework for income share agreements (ISA) offered to students.
The bill would define an ISA as an agreement between an individual and ISA funder under which the funder “credits towards the tuition or other obligations of, or pays amounts to, or on behalf of, such individual for costs associated with a postsecondary training program, or any other program designed to increase the individual’s human capital, employability, or earning potential…and such individual pays to such ISA funder (or the ISA funder’s successor in interest) income-share payments for a defined term; and is not a loan.” … Continue Reading
Democratic lawmakers seek information from Dept. of Education about income share agreements
By John L. Culhane, Jr. on
Democratic Senator Elizabeth Warren, together with Democratic Representatives Ayanna Pressley and Katie Porter, have sent a letter to the Department of Education expressing concern about reports that the Department “is exploring an experiment with Income Share Agreements (ISAs) in federal higher education programs.” The letter states that the lawmakers are “seeking to learn more about the Department’s plans in order to evaluate whether these plans are in the best interest of students and within the Department’s authority under the law.”… Continue Reading