WASHINGTON – A Consumer Financial Protection Bureau order against a provider of income-share agreements signals regulatory tightening for all ISAs, but could also give the education finance sector legal clarity, observers said.
ISAs offer tuition money in exchange for some of a student’s future income. While many see the product as a progressive alternative to traditional student loans, consumer advocates say some have avoided regulatory scrutiny by claiming ISAs are not credit.
The CFPB agreed with consumer groups, saying in a consent order that Better Future Forward, a Virginia-based nonprofit, misled consumers by attesting that its products were not loans. The agency required that the nonprofit comply with consumer protection laws such as the Truth in Lending Act.
Some worry the CFPB’s approach could be stifling before ISAs have a chance to mature, especially if the bureau asserts more authority over the sector. But several ISA proponents say the guidelines outlined in the Better Future Forward lend more regulatory certainty.
Read Also
- Ezequiel Lavezzi, ex-star of the PSG, the victim of a blackmail over sextape May 13, 2020
- Elizabeth II : the reason for which the Queen hid in a bush May 23, 2020
- Rdc, Conte replies to Meloni: “Crazy that politicians with privileged salaries ask to eliminate him” Sep 6, 2021
- Paris: “Seed bombs” to germinate the future professional of young dropouts Nov 22, 2022
- Kim Kardashian : who were her first two husbands ? May 29, 2020
- Margot Robbie recently discovered the definition of sexual harassment Nov 23, 2022
- ″ I love you, future wife! ”: Adrián Uribe got engaged to Thuany Martins in a spectacular evening Sep 27, 2020
“There’s a little more downside risk now, but there’s also more upside potential as well,” said Ethan Pollack, a program director at the nonprofit Jobs for the Future.
“With the CFPB declaring jurisdiction over ISAs, at least with regard to [the Truth in Lending Act], certainly, there’s a question of how they’re going to use that power, and I think that there is some cause for concern, ”Pollack said. “But also, if they use that power wisely and in a way that is aligned with consumer interests, then I think you could achieve a lot greater regulatory clarity.”
Income-share agreements offer college students tuition funds in exchange for some of their future income. While many see the product as a progressive alternative to traditional student loans, consumer advocates say some providers have avoided regulatory scrutiny by claiming ISAs are not credit.
Bloomberg News
Others have doubts that the CFPB’s involvement will benefit the industry.