income share agreement

The CFPB recently announced the settlement of a bankruptcy court adversary proceeding filed jointly with the Attorneys General of 11 states against Prehired, LLC (Prehired) and two affiliated companies (Prehired Affiliates) for alleged violations of the Truth in Lending Act (TILA), the Fair Debt Collection Practices Act (FDCPA), and the Consumer Financial Protection Act (CFPA) in connection with a vocational training program operated by Prehired and related Income Share Agreements (ISAs) offered by Prehired to students to finance the cost of the program. … Continue Reading

The New Jersey Attorney General (NJAG) and the Federal Trade Commission (FTC) recently announced settlements in concurrent actions against Sollers College, a for-profit college, its parent company, Sollers, Inc., and, in the case of the NJAG action, its owner, Siba Padhi  (collectively, “Sollers”), resolving allegations that Sollers lured consumers to enroll by inflating its job placement rates and falsely representing that its relationships with prominent employers would create jobs for its graduates. … Continue Reading

The Consumer Financial Protection Bureau, the California Department of Financial Protection and Innovation (CA DFPI), and ten state Attorneys General have filed a lawsuit against Prehired, LLC (Prehired) and two related companies, Prehired Recruiting, LLC and Prehired Accelerator, LLC, alleging that the companies violated the Consumer Financial Protection Act (CFPA), the Truth in Lending Act (TILA), and the Fair Debt Collection Practices Act (FDCPA) in connection with offering and collecting on income share agreements (ISAs).  … Continue Reading

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

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

(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’ 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

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 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