September 8, 2021
The Consumer Financial Protection Bureau moved against a nonprofit organization that provides income-share agreements, saying it misrepresented the nature of ISAs, didn’t comply with federal law regulating private student loans, and imposed illegal fees or penalties for early repayment.
A consent order announced Tuesday requires the provider, Virginia-based Better Future Forward, to stop saying that its ISAs are not loans. It must also provide lending disclosures required under federal law and make changes to its ISA contracts.
Better Future Forward believes the “CFPB’s oversight role is critical” against an uncertain policy framework for ISAs, the organization’s CEO said in a statement. The federal agency didn’t hit the nonprofit with financial penalties, saying it showed good faith and cooperation beyond what the law requires.