S136-118

1. Short title; table of contents This Act may be cited as the ISA Student Protection Act of 2023. The table of contents for this Act is as follows:

2. Definitions In this Act: The term adverse action— means a denial or revocation of rights under an income share agreement, a change in the terms of an existing income share agreement, or a refusal to grant an income share agreement in substantially the amount or on substantially the terms requested; and does not include a refusal to extend additional disbursements or amounts financed under an income share agreement under an existing income share agreement arrangement if— the applicant is delinquent or otherwise in default; or such additional amounts would exceed a previously established limit on the amount financed. The term amount financed means, with respect to an income share agreement, the amounts credited or advanced by the ISA provider to the ISA recipient or on behalf of the ISA recipient. The term annual percentage rate means the annual percentage rate described in section 1026.22(a) of title 12, Code of Federal Regulations. The term applicant means, with respect to an income share agreement, any individual who applies to an ISA provider directly or indirectly for an extension, renewal, or continuation of an income share agreement and includes applications for an additional amount exceeding a previously established limit on the amount financed. The term Bureau means the Bureau of Consumer Financial Protection. The term comparable loan means, with respect to an income share agreement, a loan that— has an amount financed, as described in section 1026.18(b) of title 12, Code of Federal Regulations, that is equal to the total amount financed, as defined in paragraph (2), for the income share agreement; has— the same disbursements or financing dates, payment start date, and frequency of payments as the income share agreement; and an expected number of payments equal to the ISA maximum number of payments; and is fully amortized over the ISA duration, with substantially equal periodic payments of principal and interest. The term consumer means a natural person using an income share agreement for personal, family, or household purposes. The term consumer protection regulation means a regulation that the Bureau is authorized to prescribe under Federal consumer financial law, as defined in section 1002 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5481). The term covered educational institution— means— an educational institution that would be an institution of higher education, if such determination was made without regard to the institution's accreditation status; and an institution-affiliated organization, as defined in section 151 of the Higher Education Act of 1965 (20 U.S.C. 1019); and includes an agent, officer, or employee of the institution of higher education or institution-affiliated organization. The term date of the ISA means the date that is the later of— the date on which the income share agreement is signed by the ISA recipient and the ISA provider; or the date on which the income share agreement is accepted by the ISA recipient and the ISA provider. The term Director means the Director of the Bureau. The term disbursement, when used with respect to an income share agreement, means the advance of ISA financing to an ISA recipient or the advancing of ISA financing to a third party on the ISA recipient’s behalf. The term educational ISA or educational income share agreement— means an income share agreement that— is not made, insured, or guaranteed under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) or another federally subsidized educational finance program; pays amounts to, or on behalf of, the ISA recipient 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 not limited to programs eligible to participate under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.)); any personal expenses (such as books, supplies, transportation, and living costs) incurred by the individual while enrolled in a program described in subclause (I); any other costs or expenses included in the definition of a qualified higher education expense, as defined in section 529(e)(3)(A) of the Internal Revenue Code of 1986; and the refinancing of loans or income share agreements used for the purposes described in subclauses (I) through (III), and without regard as to whether the income share agreement is provided by the educational institution that the ISA recipient attends; and does not include a loan, open-end credit, or any loan or income share agreement that is secured by real property or a dwelling. The term education loan means— a loan made, insured, or guaranteed under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) or any other loan made, insured, or guaranteed by the Federal Government; or a private education loan, as such term is defined in section 140(a) of the Truth in Lending Act (15 U.S.C. 1650(a)). The term income means the ISA Recipient’s income, as established in the income share agreement under section 302(d)(8), subject to section 104. The term income share agreement means a financial product whereby— the ISA provider credits or advances financing to the ISA recipient or to a third party on behalf of the ISA recipient; or if the ISA provider is a merchant financing the sale of goods or services to the ISA recipient via the financial product, the ISA provider credits the amount financed toward the purchase of such goods or services; the ISA recipient is obligated to make periodic ISA payments (if any become due) to the ISA provider in the future calculated based upon and determined by the ISA recipient’s future income; the ISA recipient’s obligation to make payments (if any become due) to the ISA provider is conditional on the ISA recipient’s income exceeding the income threshold set in the income share agreement; there is an ISA duration after which the obligation is complete regardless of how much has been paid (as long as the ISA recipient has paid any prior amounts due); the ISA provider and the ISA recipient enter into an agreement that, as of the date of the ISA, includes each element described in clauses (i) through (iv); and the agreement states that it is an income share agreement and subject to this Act. If a provider offers a financial product that meets the requirements of clauses (i) through (v) but does not include the statement described in clause (vi), then the financial product is not an income share agreement and shall be considered credit. The term income threshold means a fixed dollar amount that is the minimum income per payment period that an ISA recipient is required to earn before the ISA recipient is required to make a payment on an income share agreement for such payment period. The term institution of higher education has the meaning given the term in section 102 of the Higher Education Act of 1965 (20 U.S.C. 1002). The term ISA duration means the maximum length of time during which the income of an ISA recipient can be subject to an ISA payment (absent periods of payment relief pause at the request of the ISA recipient). The term ISA financing means the disbursement of funds by an ISA provider under an income share agreement. The term ISA maximum number of payments means the maximum number of ISA payments (during ISA payment periods in which the ISA recipient’s income is greater than the income threshold) that an ISA recipient could be required to make. The term ISA payment— means the amount of an ISA recipient’s periodic payment obligation, based on the terms of the income share agreement, during any payment period for which the ISA recipient's income is greater than the income threshold; and is calculated using the ISA payment calculation method, based on the ISA recipient’s income for the specified period. The term ISA payment calculation method means the ISA percentage, or the schedule of fixed dollar amounts based on the ISA recipient’s income for a payment period, that is used to calculate an ISA recipient’s ISA payment under the income share agreement. The ISA payment window means the period during which the ISA recipient is required to make ISA payments in periods where the ISA recipient's income is greater than the income threshold for the income share agreement. The term ISA percentage means a percentage of income (or schedule of percentages of income based on the ISA recipient's income in a given ISA payment period) used to calculate an ISA recipient’s ISA payment pursuant to an income share agreement. The term ISA provider means a person that provides financing to an ISA recipient pursuant to an income share agreement or, in the case of a person who is a merchant financing the sale of goods or services to the ISA recipient, the merchant. The term ISA recipient means a consumer that receives financing from an ISA provider pursuant to an income share agreement. The term loan means a financial product that— is credit, as defined in section 1026.2(a) of title 12, Code of Federal Regulations; is not an income share agreement; and involves the advance of a sum of money to a borrower under an obligation to repay the principal with a corresponding right to defer payment of the principal balance with or without interest. The term loan comparison means the comparison table required under section 302(d)(9). The term payment relief pause means a period of time that— is requested by the ISA recipient during which any payment obligation the ISA recipient would have is suspended; and does not count toward an ISA recipient’s ISA payment window or ISA maximum number of payments. The term person means a natural person or an organization, including a corporation, partnership, proprietorship, association, cooperative, estate, trust, or government unit. The term poverty line has the meaning given the term in section 673 of the Community Services Block Grant Act (42 U.S.C. 9902). The term Secretary means the Secretary of Education. The term State means the several States of the United States, the Commonwealth of Puerto Rico, the District of Columbia, Guam, American Samoa, the Virgin Islands, the Northern Mariana Islands, the Federated States of Micronesia, the Republic of the Marshall Islands, and the Republic of Palau. The term State law means— any law, decision, rule, regulation, or other action having the effect of a law of any State or any political subdivision of a State, or any agency or instrumentality of a State or political subdivision of a State; and any law of the United States applicable only to the District of Columbia.

3. Effective date This Act, and the amendments made by this Act, shall take effect on the date that is 180 days after the date of enactment of this Act.

101. Prohibition on acceleration; treatment of early completion mechanisms An ISA provider shall not include any mechanism in an income share agreement that accelerates an amount against an ISA recipient in the event of a default under the income share agreement. Any agreement with an acceleration mechanism described in paragraph (1) shall, for purposes of all Federal law, be treated as credit under Federal law and shall not be treated as an income share agreement. Notwithstanding subsection (a)— an income share agreement may contain an early completion provision that allows the ISA recipient to terminate the income share agreement prior to any trigger terminating further obligations under the income share agreement (such as a total cap on payments due to the ISA provider or other rights to partially or fully terminate further obligations under the income share agreement) if the early completion provision is optional to the ISA recipient and within the ISA recipient’s control; and such early completion mechanism shall not be treated as a form of acceleration prohibited under subsection (a), an early completion penalty, or a prepayment penalty.

103. Discharge protections for ISA recipients In any case where an ISA recipient would be deemed totally and permanently disabled for purposes of benefits administered by the Department of Veterans Affairs or the Social Security Administration (determined without regard to whether the recipient receives such benefits), all further obligations of the ISA recipient under the income share agreement shall terminate, except those accruing before the date such a determination would apply. Upon the death of an ISA recipient, all further obligations of the ISA recipient under the income share agreement shall terminate, except those obligations accruing before the ISA recipient’s date of death.

104. Limitation on amounts treated as income under educational ISAs For purposes of calculating the obligation of an ISA recipient to make ISA payments under an educational ISA, the income of the ISA recipient shall not include— the income of any child or dependent of the ISA recipient; any item of income which is not included in the gross income of the ISA recipient; any amount received from an individual retirement plan (as defined in section 7701 of the Internal Revenue Code of 1986), a pension, or an annuity; or any social security benefit (as defined in section 86 of such Code). In the event that an ISA recipient fails to provide income documentation as reasonably required by the income share agreement, an ISA provider may assign an amount of income to the participant and compute the monthly payment amount for the participant by any of the following methods, to the extent disclosed in the income share agreement: Assigning an income amount obtained from a reasonably reliable third party or a consumer reporting agency, as defined in section 603(f) of the Fair Credit Reporting Act (15 U.S.C. 1681a(f)). If the participant previously provided income documentation or has had an income assigned in the preceding 1-year period, assuming that such income has increased by up to 10 percent, but such increase may not be applied more than once per 1-year period. Contacting the employer of the participant, or any person or entity reasonably believed to be the employer of the participant, to obtain, verify, or update the income information of the participant. Contacting the State revenue department or the Internal Revenue Service to obtain the most recent information available about the income of the participant. For educational ISA providers, in any case where the ISA provider has no prior history of income information from the participant, assigning a reasonable qualified income based on— the median income for individuals working in the profession for which the educational program of the participant was intended to prepare the participant, as determined by information published by the Bureau of Labor Statistics or other reasonably reliable publicly available data sources; or the median income of participants who attended the same or a reasonably comparable covered educational program or course of study, as determined by information published by the Bureau of Labor Statistics or other reasonably reliable publicly available data sources. If an ISA provider assigns an income to the income share agreement of a participant, the ISA provider— shall notify the participant in the monthly billing statement, and in each billing statement thereafter while the assigned income remains applicable to the income share agreement of the participant, that income has been assigned and of the rights of the participant under this section; in any tax year for which the ISA provider has made an assumption about an individual’s income using any of the methods described in paragraph (1) and if the participant has authorized ongoing access to the participant’s return information under section 403, shall request such information in each year of the payment term; if the participant does provide income information as reasonably required by the income share agreement within 1 year of the date on which the ISA provider notified the participant that assigned income shall be applied to the income share agreement or if the ISA provider receives updated income information through return information authorized under section 403, then, within 15 days after the date on which the ISA provider receives such information, shall— update each prior instance in which assigned income was applied using such new income information; and reconcile any difference in amounts owed by the participant based on those updates to prior income; and if the participant provides income information more than 1 year after the ISA provider first assigned income to the income share agreement of the participant, may, but shall not be obligated to, update each prior instance in which assigned income was applied using the income information provided by the participant. An ISA provider that assigns income to an income share agreement shall retain all applicable records relating to the method and data sources used to make such estimation for 3 years after the end of that income share agreement.

201. Tax treatment Subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following: For purposes of this title, an educational ISA shall not be treated as indebtedness. In the case of an individual— Gross income shall not include so much of the amount received under an educational ISA as does not exceed amounts paid or credited to such individual under such qualified educational ISA for costs and expenses described in section 2(13)(A)(ii)(II) of the ISA Student Protection Act of 2023. In any case in which the amount provided to the individual under the educational ISA exceeds the total payments made by the individual under the educational ISA, gross income shall not include the amount of such excess. For purposes of section 221, the amount described in subparagraph (B) with respect to any educational ISA shall be treated as interest paid by the taxpayer during the taxable year on a qualified education loan. The amount described in this subparagraph with respect to any educational ISA is, for any taxable year, the excess of— amounts paid by the taxpayer to another person under the terms of a qualified educational ISA during such taxable year, over the excess of— the aggregate amount received under such qualified educational ISA during such taxable year and all preceding taxable years, over the aggregate amounts paid by the taxpayer to another person under the terms of such qualified educational ISA during all preceding taxable years. For purposes of section 127(c)(1)(B), amounts paid by an employer in satisfaction of obligations of an employee under a qualified educational ISA shall be treated in the same manner as a payment of principal or interest on a qualified education loan. Gross income shall not include so much of any amount received as a payment from a recipient under an educational ISA funded by the taxpayer as does not exceed the excess of— the aggregate amount of financing provided by the taxpayer under such educational ISA, over the aggregate amount of such payments taken into account under this subsection by the taxpayer for all preceding taxable years. For purposes of this section— The term educational ISA has the meaning given such term under section 2 of the ISA Student Protection Act of 2023. The term qualified educational ISA means an educational ISA that is extended for expenses at an institution of higher education that participates in a student financial assistance program under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.). The table of parts for subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: XIIRules relating to qualified educational income sharing agreements Sec. 293. Rules related to qualified educational ISAs. 293.Rules related to qualified educational ISAs (a)In generalFor purposes of this title, an educational ISA shall not be treated as indebtedness. (b)Treatment of ISA recipient (1)Income exclusionIn the case of an individual— (A)In generalGross income shall not include so much of the amount received under an educational ISA as does not exceed amounts paid or credited to such individual under such qualified educational ISA for costs and expenses described in section 2(13)(A)(ii)(II) of the ISA Student Protection Act of 2023. (B)Difference in paymentsIn any case in which the amount provided to the individual under the educational ISA exceeds the total payments made by the individual under the educational ISA, gross income shall not include the amount of such excess. (2)Certain amounts treated as interest on qualified education loans (A)In generalFor purposes of section 221, the amount described in subparagraph (B) with respect to any educational ISA shall be treated as interest paid by the taxpayer during the taxable year on a qualified education loan. (B)Amount describedThe amount described in this subparagraph with respect to any educational ISA is, for any taxable year, the excess of— (i)amounts paid by the taxpayer to another person under the terms of a qualified educational ISA during such taxable year, over (ii)the excess of— (I)the aggregate amount received under such qualified educational ISA during such taxable year and all preceding taxable years, over (II)the aggregate amounts paid by the taxpayer to another person under the terms of such qualified educational ISA during all preceding taxable years. (3)Amounts treated as educational assistanceFor purposes of section 127(c)(1)(B), amounts paid by an employer in satisfaction of obligations of an employee under a qualified educational ISA shall be treated in the same manner as a payment of principal or interest on a qualified education loan. (c)Treatment of ISA funderGross income shall not include so much of any amount received as a payment from a recipient under an educational ISA funded by the taxpayer as does not exceed the excess of— (1)the aggregate amount of financing provided by the taxpayer under such educational ISA, over (2)the aggregate amount of such payments taken into account under this subsection by the taxpayer for all preceding taxable years. (d)DefinitionsFor purposes of this section— (1)Educational ISAThe term educational ISA has the meaning given such term under section 2 of the ISA Student Protection Act of 2023. (2)Qualified educational ISAThe term qualified educational ISA means an educational ISA that is extended for expenses at an institution of higher education that participates in a student financial assistance program under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.).. PART XII—Rules relating to qualified educational income sharing agreements.

293. Rules related to qualified educational ISAs For purposes of this title, an educational ISA shall not be treated as indebtedness. In the case of an individual— Gross income shall not include so much of the amount received under an educational ISA as does not exceed amounts paid or credited to such individual under such qualified educational ISA for costs and expenses described in section 2(13)(A)(ii)(II) of the ISA Student Protection Act of 2023. In any case in which the amount provided to the individual under the educational ISA exceeds the total payments made by the individual under the educational ISA, gross income shall not include the amount of such excess. For purposes of section 221, the amount described in subparagraph (B) with respect to any educational ISA shall be treated as interest paid by the taxpayer during the taxable year on a qualified education loan. The amount described in this subparagraph with respect to any educational ISA is, for any taxable year, the excess of— amounts paid by the taxpayer to another person under the terms of a qualified educational ISA during such taxable year, over the excess of— the aggregate amount received under such qualified educational ISA during such taxable year and all preceding taxable years, over the aggregate amounts paid by the taxpayer to another person under the terms of such qualified educational ISA during all preceding taxable years. For purposes of section 127(c)(1)(B), amounts paid by an employer in satisfaction of obligations of an employee under a qualified educational ISA shall be treated in the same manner as a payment of principal or interest on a qualified education loan. Gross income shall not include so much of any amount received as a payment from a recipient under an educational ISA funded by the taxpayer as does not exceed the excess of— the aggregate amount of financing provided by the taxpayer under such educational ISA, over the aggregate amount of such payments taken into account under this subsection by the taxpayer for all preceding taxable years. For purposes of this section— The term educational ISA has the meaning given such term under section 2 of the ISA Student Protection Act of 2023. The term qualified educational ISA means an educational ISA that is extended for expenses at an institution of higher education that participates in a student financial assistance program under title IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.).

301. Disclosures The following disclosures shall be provided to ISA recipients: An ISA provider (regardless of whether the ISA provided is an educational ISA) shall provide, to any individual that applies for or signs an income share agreement, a written document that clearly and simply discloses the information required by this Act. The provisions of this title shall not apply to— income share agreements primarily for business, commercial, or agricultural purposes; government or governmental agencies or instrumentalities; organizations; or transactions for which the Bureau, by rule, determines that coverage under the provisions of this title are not necessary to carry out the purposes of this title. Not later than 270 days after the date of enactment of this Act, the Bureau shall prescribe regulations to carry out the purposes of this title, which may contain such additional requirements, classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for all or any class of transactions, as in the judgment of the Bureau are necessary or proper to effectuate the purposes of this title, to prevent circumvention or evasion thereof, or to facilitate compliance therewith. Not later than 270 days after the date of enactment of this Act, the Bureau shall publish a model integrated disclosure for educational ISAs and a model integrated disclosure for income share agreements generally in order to facilitate compliance with the disclosure requirements of this Act and aid ISA recipients in understanding the transaction by utilizing readily understandable language to simplify the technical nature of the disclosures. In devising the disclosure forms required under subparagraph (A), the Bureau shall consider the use by ISA providers of data processing or similar automated equipment. Nothing in this title may be construed to require an ISA provider to use any model form or clause published by the Bureau under this section. An ISA provider shall be deemed to be in compliance with the disclosure provisions of this title with respect to other than numerical disclosures if the ISA provider— uses any appropriate model form or clause as published by the Bureau under this section; or uses any such model form or clause and changes the form or clause by— deleting any information that is not required under this title; or rearranging the format, if in making such deletion or rearranging the format, the ISA provider does not affect the substance, clarity, or meaningful sequence of the disclosure. Model disclosure forms and clauses under this section shall be adopted by the Bureau after notice duly given in the Federal Register and an opportunity for public comment in accordance with section 553 of title 5, United States Code. Any regulation of the Bureau, or any amendment or interpretation thereof, requiring any disclosure which differs from the disclosures previously required by this title or any regulation of the Bureau promulgated under this title shall have an effective date of that October 1 which follows by not less than 6 months the date of promulgation, except that the Bureau may at its discretion take interim action by regulation, amendment, or interpretation to lengthen the period of time permitted for ISA providers to adjust their forms to accommodate new requirements or shorten the length of time for ISA providers to make such adjustments when the ISA provider makes a specific finding that such action is necessary to comply with the findings of a court or to prevent unfair or deceptive disclosure practices. Notwithstanding subparagraph (A), any ISA provider may comply with any such newly promulgated disclosure requirements prior to the effective date of the requirements. Notwithstanding any power granted to any Federal agency under this Act, the deference that a court affords to the Bureau with respect to a determination made by the Bureau relating to the meaning or interpretation of any provision of this Act, shall be applied as if the Bureau were the only agency authorized to apply, enforce, interpret, or administer the provisions of this Act.

304. Advertising of income share agreements The restrictions on advertising of income share agreements shall be consistent with the restrictions placed on advertisements related to extensions of consumer credit as set forth in chapter 3 of the Truth in Lending Act (15 U.S.C. 1661 et seq.). The Truth in Lending Act (15 U.S.C. 1601 et seq.) is amended— in section 103(f) (15 U.S.C. 1602(f))— by striking means the and inserting means— the in paragraph (1), as so designated, by striking the period at the end and inserting ; and; and by adding at the end the following: for purposes of chapter 3, shall include an income share agreement, as defined in section 2 of the ISA Student Protection Act of 2023. in section 142 (15 U.S.C. 1662)— in the matter preceding paragraph (1), by striking state and inserting state—; in paragraph (1), by striking the period at the end and inserting a semicolon; in paragraph (2), by striking the period at the end and inserting ; and; and by adding at the end the following: with respect to an income share agreement (as defined in section 2 of the ISA Student Protection Act of 2023), that a specific ISA payment calculation method, ISA duration, ISA maximum number of payments, or income threshold (as those terms are defined in such section 2) can be arranged unless the ISA provider (as defined in such section 2) usually and customarily arranges income share agreements pursuant to the terms so advertised. in section 144 (15 U.S.C. 1664), by adding at the end the following: In this subsection, the terms income share agreement, income threshold, ISA duration, ISA maximum number of payments, and ISA payment calculation method have the meanings given those terms in section 2 of the ISA Student Protection Act of 2023. This subsection shall apply to any advertisement to aid, promote, or assist directly or indirectly any income share agreement subject to the provisions of this chapter. If any advertisement to which this section applies states the ISA payment calculation method, ISA duration, ISA maximum number of payments, income threshold, or amounts of payments under an income share agreement, the advertisement shall include the following: The ISA payment calculation method. The ISA duration. The ISA maximum number of payments. The income threshold. means— (1)the; (2)for purposes of chapter 3, shall include an income share agreement, as defined in section 2 of the ISA Student Protection Act of 2023.; (3)with respect to an income share agreement (as defined in section 2 of the ISA Student Protection Act of 2023), that a specific ISA payment calculation method, ISA duration, ISA maximum number of payments, or income threshold (as those terms are defined in such section 2) can be arranged unless the ISA provider (as defined in such section 2) usually and customarily arranges income share agreements pursuant to the terms so advertised.; and (f)Income share agreements (1)DefinitionsIn this subsection, the terms income share agreement, income threshold, ISA duration, ISA maximum number of payments, and ISA payment calculation method have the meanings given those terms in section 2 of the ISA Student Protection Act of 2023. (2)ApplicationThis subsection shall apply to any advertisement to aid, promote, or assist directly or indirectly any income share agreement subject to the provisions of this chapter. (3)Disclosure of key termsIf any advertisement to which this section applies states the ISA payment calculation method, ISA duration, ISA maximum number of payments, income threshold, or amounts of payments under an income share agreement, the advertisement shall include the following: (A)The ISA payment calculation method. (B)The ISA duration. (C)The ISA maximum number of payments. (D)The income threshold..

401. Treatment under securities laws An income share agreement shall not be treated as a security for purposes of the securities laws (as defined in section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78c(a))), any similar State law, or any State law that directly or indirectly prohibits, limits, or imposes conditions, based on the merits of an offering or issuer of securities, upon the offer or sale of any security. Nothing in paragraph (1) may be construed to prevent an instrument that is collateralized by, or serviced by the cash flows of, an income share agreement from being treated as a security for purposes of any law described in that paragraph. Section 3(c) of the Investment Company Act of 1940 (15 U.S.C. 80a–3(c)) is amended— in paragraph (4), by inserting income share agreements (as that term is defined in section 2 of the ISA Student Protection Act of 2023), after industrial banking,; and in paragraph (5)— in subparagraph (A), by inserting , including purchasing or otherwise acquiring income share agreements (as that term is defined in section 2 of the ISA Student Protection Act of 2023) after services; and in subparagraph (B), by inserting , including making income share agreements (as defined in subparagraph (A)) after services.

402. Treatment under bankruptcy laws Section 523(a)(8) of title 11, United States Code, is amended, in the matter preceding subparagraph (A), by striking for— and inserting for, other than funds provided as part of an educational ISA (as defined in section 2 of the ISA Student Protection Act of 2023)—.

403. Consent to continuing release of taxpayer information under educational ISAs and income share agreements By not later than 180 days after the date of enactment of this Act, the Secretary of the Treasury shall modify Treasury regulations and guidance to provide for continuing consent to disclosure of an individual’s return information to an ISA provider (or the provider's successor in interest) under an educational ISA or other income share agreement, but only for periods relevant to, and only to the extent the Secretary determines is necessary and appropriate in carrying out the terms of, such educational ISA or income share agreement.

404. Interplay with the Higher Education Act of 1965 Section 480 of the Higher Education Act of 1965 (20 U.S.C. 1087vv), as amended by section 702 of the FAFSA Simplification Act (title VII of division FF of Public Law 116–260; 134 Stat. 3191), is amended— in subsection (e)— in paragraph (2), by striking and after the semicolon; in paragraph (3), by striking the period and inserting ; and; and by adding at the end the following: any amount provided to the applicant, or on whose behalf funds are disbursed, under an income share agreement, as defined in section 2 of the ISA Student Protection Act of 2023. in subsection (f)(1), by inserting amounts provided to an individual, or on whose behalf the funds are disbursed, under an income share agreement, as defined in section 2 of the ISA Student Protection Act of 2023, after income producing property,. The amendments made by paragraph (1) shall take effect as if included in section 702 of the FAFSA Simplification Act (title VII of division FF of Public Law 116–260; 134 Stat. 3191) and in accordance with section 701(b) of such Act. Section 487(d)(1)(D) of the Higher Education Act of 1965 (20 U.S.C. 1094(d)(1)(D)) is amended— in clause (ii), by striking and after the semicolon; in clause (iii), by inserting and after the semicolon; and by adding at the end the following: in the case of educational income share agreements (as such term is defined in section 2 of the ISA Student Protection Act of 2023) made by a proprietary institution of higher education, only the amount of ISA payments (as defined in such section) received during the applicable institutional fiscal year, to the extent the amount of such payments on the educational income share agreement does not exceed the income share amount financed under such educational income share agreement; Section 151 of the Higher Education Act of 1965 (20 U.S.C. 1019) is amended— by redesignating paragraphs (3), (4), (5), and (6) through (9) as paragraphs (4), (5), (6), and (9) through (12), respectively; by inserting after paragraph (2) the following: The term educational ISA has the meaning given the term in section 2 of the ISA Student Protection Act of 2023. in paragraph (6), as redesignated by paragraph (1)— in subparagraph (A)(ii), by inserting or educational ISAs after loans; in subparagraph (B), by striking and after the semicolon; in subparagraph (C), by striking the period at the end and inserting ; and; and by adding at the end of the following: notwithstanding subparagraphs (A) and (B), does not include any ISA provider with respect to any educational ISA secured, made, or extended by such ISA provider. by inserting after paragraph (6), as redesignated by subparagraph (A), the following: The term ISA provider has the meaning given the term in section 2 of the ISA Student Protection Act of 2023. The term ISA recipient has the meaning given the term in section 2 of the ISA Student Protection Act of 2023. in paragraph (11)(A), as redesignated by paragraph (1)— in the matter preceding clause (i), by inserting or ISA provider after lender; in clause (i), by inserting or an ISA provider provides or otherwise issues educational ISAs after loans; and in clause (ii), by inserting or the educational ISAs of the ISA provider after lender. Section 152 of the Higher Education Act of 1965 (20 U.S.C. 1019a) is amended— in the section heading, by striking and lenders and inserting lenders, and ISA providers; in subsection (a)— in paragraph (1)— in subparagraph (A)— in clause (i)— in the matter preceding subclause (I), by inserting or educational ISAs after loans; in subclause (II)— by striking section 151(3)(A) and inserting section 151(4)(A); and by striking and at the end; by redesignating subclause (III) as subclause (IV); and by inserting after subclause (II) the following: the information required to be disclosed pursuant to section 153(a)(2)(A)(i), for an educational ISA that is offered pursuant to a preferred lender arrangement of the institution or organization to students of the institution or families of such students; and in clause (ii)— in the matter preceding subclause (I)— by striking subparagraph (C) and inserting subparagraph (D); and by inserting or educational ISAs after loans; in subclause (I), by striking and after the semicolon; and by adding at the end the following: in the case of a covered institution, the information described in section 153(c) for each type of educational ISA offered pursuant to a preferred lender arrangement of the institution to students of the institution or the families of such students; and in the case of an institution-affiliated organization of a covered institution, the information in section 303(b)(1) of the ISA Student Protection Act of 2023, for each type of educational ISA offered pursuant to a preferred lender arrangement of the organization to students of such institution or the families of such students. by redesignating subparagraph (C) as subparagraph (D); and by inserting after subparagraph (B) the following: A covered institution, or an institution-affiliated organization of such covered institution, that provides information regarding an educational ISA from an ISA provider to a prospective ISA recipient shall— provide the prospective ISA recipient with the information described in section 303(b)(1) of the ISA Student Protection Act of 2023 for such educational ISA; inform the perspective ISA recipient that— the prospective ISA recipient may qualify for loans or other assistance under title IV; and the terms and conditions of the loans made, insured, or guaranteed under title IV may be more favorable than the provisions of educational ISAs; and ensure that information regarding educational ISAs is presented in such a manner as to be distinct from information regarding loans that are made, insured, or guaranteed under title IV. by striking paragraph (2) and inserting the following: A covered institution, or an institution-affiliated organization of such covered institution, that enters into a preferred lender arrangement with a lender regarding private education loans or an ISA provider regarding educational ISAs shall not agree to the lender’s or ISA provider’s use of the name, emblem, mascot, or logo of such institution or organization, or other words, pictures, or symbols readily identified with such institution or organization, in the marketing of private education loans or educational ISAs to students attending such institution in any way that implies that the loan or educational ISA is offered or made by such institution or organization instead of the lender or ISA provider. by adding at the end the following: A covered institution, or an institution-affiliated organization of such covered institution, that enters into a preferred lender arrangement with an ISA provider regarding educational ISAs shall ensure that the name of the ISA provider is displayed in all information and documentation related to such educational ISAs. by adding at the end the following: For each of an ISA provider’s educational ISAs, the ISA provider shall comply with the disclosure requirements of sections 302 and 303 of the ISA Student Protection Act of 2023. Section 153 of the Higher Education Act of 1965 (20 U.S.C. 1019b) is amended— in subsection (a)— in paragraph (1)— in subparagraph (A), by striking section 151(3)(A) and inserting section 151(4)(A); and by adding at the end the following: By not later than 180 days after the date of enactment of the ISA Student Protection Act of 2023, the Secretary, in coordination with the Bureau of Consumer Financial Protection, shall determine the minimum information that ISA providers, covered institutions, and institution-affiliated organizations of such covered institutions participating in preferred lender arrangements shall make available regarding educational ISAs. In carrying out clause (i), the Secretary shall— consult with students, the families of such students, representatives of covered institutions (including financial aid administrators, admission officers, and business officers), representatives of institution-affiliated organizations, secondary school guidance counselors, and ISA providers; include, in the minimum information under clause (i) that is required to be made available, the information required to be disclosed under section 303 of the ISA Student Protection Act of 2023; and consider the merits of requiring each covered institution, and each institution-affiliated organization of such covered institution, with a preferred lender arrangement to provide prospective ISA recipients and the families of such ISA recipients the following information for each type of educational ISA offered pursuant to such preferred lender arrangement: The ISA payment calculation method, the income threshold, the ISA maximum number of payments (or a range of the ISA maximum number of payments), the ISA payment window (or a range of the ISA payment windows), and the terms and conditions of the educational ISA for the next award year. In this subclause, the terms income threshold, ISA maximum number of payments, ISA payment calculation method, and ISA payment window have the meanings given the terms in section 2 of the ISA Student Protection Act of 2023. An itemization of the fees or range of fees required to obtain the educational ISA. Any fees or other penalties based on the ISA recipient’s defaults or late payments. The annual or aggregate maximum financed amounts. The average financed amounts provided by the ISA provider to students who— graduated from such institution in the preceding year with certificates, undergraduate degrees, graduate degrees, and professional degrees, as applicable; and obtained educational ISAs of such type from the ISA provider for the preceding year. The consequences for the ISA recipient for defaulting on an educational ISA. Contact information for the ISA provider. Other information suggested by the persons and entities with whom the Secretary has consulted under subclause (I). in paragraph (2)— in subparagraph (A)— in clause (i), by striking section 151(3)(A) and inserting section 151(4)(A), or to prospective ISA recipients and the families of such ISA recipients regarding educational ISAs,; and in clause (ii), by striking the model disclosure form and inserting a model disclosure form; in subparagraph (B)— in the matter preceding clause (i)— by striking a model disclosure form and inserting model disclosure forms; and by striking and preferred lenders and inserting preferred lenders, and ISA providers; in clause (i), by inserting ISA providers, after servicers,; and in clause (ii)— by striking format to the form and inserting the following: format to— with respect to education loans, the form by striking section 151(3)(A) and inserting section 151(4)(A); and by adding at the end the following: with respect to educational ISAs, the form developed by the Bureau of Consumer Financial Protection under section 301(4) of the ISA Student Protection Act of 2023 in order to permit students and the families of students to easily compare educational ISAs; and in subparagraph (C), by striking such model disclosure form and inserting the model disclosure forms described in subparagraph (B); in subsection (b), by striking section 151(3)(A) each place the term appears and inserting section 151(4)(A); by redesignating subsection (c) as subsection (d); by inserting after subsection (b) the following: Each ISA provider that has a preferred lender arrangement with respect to educational ISAs with a covered institution, or an institution-affiliated organization of such covered institution, shall annually, by a date determined by the Secretary, provide to such covered institution or such institution-affiliated organization, and to the Secretary, the information the Secretary requires pursuant to subsection (a)(2)(A)(i) for the educational ISAs that the ISA provider plans to offer pursuant to such preferred lender arrangement to students attending such covered institution, or to the families of such students, for the next award year. in subsection (d), as redesignated by paragraph (3)— in paragraph (1)— in subparagraph (A)— in clause (i), by striking section 151(3)(A) and inserting section 151(4)(A) or educational ISA; and by adding at the end the following: in the case of a covered institution, the information described in subsection (c), for each type of educational ISA offered pursuant to a preferred lender arrangement of the institution to students of the institution or the families of such students; and in the case of an institution-affiliated organization of a covered institution, the information described in section 303(b)(1) of the ISA Student Protection Act of 2023, for each type of educational ISA offered pursuant to a preferred lender arrangement of the organization to students of such institution or the families of such students. in subparagraph (B)— by inserting or ISA provider after lender; and by inserting or an educational ISA after loan; and in paragraph (2)(A)— in the matter preceding clause (i), by inserting or ISA provider after each lender; in clause (i), by striking clauses (i) and (ii) and inserting clauses (i) through (iii), as applicable; and in clause (ii)— by inserting or ISA provider after the lender; and by inserting or educational ISA after loan. Section 155 of the Higher Education Act of 1965 (20 U.S.C. 1019d) is amended— by striking the section heading and inserting the following: Self-certification forms for private education loans or educational ISAs.; in subsection (a)— in the matter preceding paragraph (1)— by striking the self-certification form and inserting a self-certification form; by inserting and, in consultation with the Director of the Bureau of Consumer Financial Protection, a self-certification form for educational ISAs that shall be used to satisfy the requirements of section 303(f) of the ISA Student Protection Act of 2023 after Act; and by striking Such form and inserting Each form; and in paragraph (3)— in subparagraph (A), by inserting or educational ISA, as applicable after loan; and in subparagraph (C), by inserting or educational ISA, as applicable after loan; and in subsection (b), by striking the form and inserting a form. Section 154 of the Higher Education Act of 1965 (20 U.S.C. 1019c) is amended— in subsection (a)— by inserting for education loans after the model disclosure form; and by striking section 151(3)(A) and inserting section 151(4)(A); and in subsection (b)(2), by inserting for education loans after model disclosure form. (4)any amount provided to the applicant, or on whose behalf funds are disbursed, under an income share agreement, as defined in section 2 of the ISA Student Protection Act of 2023.; and (iv)in the case of educational income share agreements (as such term is defined in section 2 of the ISA Student Protection Act of 2023) made by a proprietary institution of higher education, only the amount of ISA payments (as defined in such section) received during the applicable institutional fiscal year, to the extent the amount of such payments on the educational income share agreement does not exceed the income share amount financed under such educational income share agreement;. (3)Educational ISAThe term educational ISA has the meaning given the term in section 2 of the ISA Student Protection Act of 2023.; (D)notwithstanding subparagraphs (A) and (B), does not include any ISA provider with respect to any educational ISA secured, made, or extended by such ISA provider.; (7)ISA providerThe term ISA provider has the meaning given the term in section 2 of the ISA Student Protection Act of 2023. (8)ISA recipientThe term ISA recipient has the meaning given the term in section 2 of the ISA Student Protection Act of 2023.; and (III)the information required to be disclosed pursuant to section 153(a)(2)(A)(i), for an educational ISA that is offered pursuant to a preferred lender arrangement of the institution or organization to students of the institution or families of such students; and; and (III)in the case of a covered institution, the information described in section 153(c) for each type of educational ISA offered pursuant to a preferred lender arrangement of the institution to students of the institution or the families of such students; and (IV)in the case of an institution-affiliated organization of a covered institution, the information in section 303(b)(1) of the ISA Student Protection Act of 2023, for each type of educational ISA offered pursuant to a preferred lender arrangement of the organization to students of such institution or the families of such students.; (C)Educational ISA disclosuresA covered institution, or an institution-affiliated organization of such covered institution, that provides information regarding an educational ISA from an ISA provider to a prospective ISA recipient shall— (i)provide the prospective ISA recipient with the information described in section 303(b)(1) of the ISA Student Protection Act of 2023 for such educational ISA; (ii)inform the perspective ISA recipient that— (I)the prospective ISA recipient may qualify for loans or other assistance under title IV; and (II)the terms and conditions of the loans made, insured, or guaranteed under title IV may be more favorable than the provisions of educational ISAs; and (iii)ensure that information regarding educational ISAs is presented in such a manner as to be distinct from information regarding loans that are made, insured, or guaranteed under title IV.; (2)Use of institution nameA covered institution, or an institution-affiliated organization of such covered institution, that enters into a preferred lender arrangement with a lender regarding private education loans or an ISA provider regarding educational ISAs shall not agree to the lender’s or ISA provider’s use of the name, emblem, mascot, or logo of such institution or organization, or other words, pictures, or symbols readily identified with such institution or organization, in the marketing of private education loans or educational ISAs to students attending such institution in any way that implies that the loan or educational ISA is offered or made by such institution or organization instead of the lender or ISA provider.; and (4)Use of ISA provider nameA covered institution, or an institution-affiliated organization of such covered institution, that enters into a preferred lender arrangement with an ISA provider regarding educational ISAs shall ensure that the name of the ISA provider is displayed in all information and documentation related to such educational ISAs.; and (c)ISA provider responsibilitiesFor each of an ISA provider’s educational ISAs, the ISA provider shall comply with the disclosure requirements of sections 302 and 303 of the ISA Student Protection Act of 2023.. (C)Additional information for educational ISAs (i)In generalBy not later than 180 days after the date of enactment of the ISA Student Protection Act of 2023, the Secretary, in coordination with the Bureau of Consumer Financial Protection, shall determine the minimum information that ISA providers, covered institutions, and institution-affiliated organizations of such covered institutions participating in preferred lender arrangements shall make available regarding educational ISAs. (ii)Consultation and content of minimum disclosuresIn carrying out clause (i), the Secretary shall— (I)consult with students, the families of such students, representatives of covered institutions (including financial aid administrators, admission officers, and business officers), representatives of institution-affiliated organizations, secondary school guidance counselors, and ISA providers; (II)include, in the minimum information under clause (i) that is required to be made available, the information required to be disclosed under section 303 of the ISA Student Protection Act of 2023; and (III)consider the merits of requiring each covered institution, and each institution-affiliated organization of such covered institution, with a preferred lender arrangement to provide prospective ISA recipients and the families of such ISA recipients the following information for each type of educational ISA offered pursuant to such preferred lender arrangement: (aa) (AA)The ISA payment calculation method, the income threshold, the ISA maximum number of payments (or a range of the ISA maximum number of payments), the ISA payment window (or a range of the ISA payment windows), and the terms and conditions of the educational ISA for the next award year. (BB)In this subclause, the terms income threshold, ISA maximum number of payments, ISA payment calculation method, and ISA payment window have the meanings given the terms in section 2 of the ISA Student Protection Act of 2023. (bb)An itemization of the fees or range of fees required to obtain the educational ISA. (cc)Any fees or other penalties based on the ISA recipient’s defaults or late payments. (dd)The annual or aggregate maximum financed amounts. (ee)The average financed amounts provided by the ISA provider to students who— (AA)graduated from such institution in the preceding year with certificates, undergraduate degrees, graduate degrees, and professional degrees, as applicable; and (BB)obtained educational ISAs of such type from the ISA provider for the preceding year. (ff)The consequences for the ISA recipient for defaulting on an educational ISA. (gg)Contact information for the ISA provider. (hh)Other information suggested by the persons and entities with whom the Secretary has consulted under subclause (I).; format to— (aa) with respect to education loans, the form; (bb)with respect to educational ISAs, the form developed by the Bureau of Consumer Financial Protection under section 301(4) of the ISA Student Protection Act of 2023 in order to permit students and the families of students to easily compare educational ISAs; and; and (c)Duties of ISA providersEach ISA provider that has a preferred lender arrangement with respect to educational ISAs with a covered institution, or an institution-affiliated organization of such covered institution, shall annually, by a date determined by the Secretary, provide to such covered institution or such institution-affiliated organization, and to the Secretary, the information the Secretary requires pursuant to subsection (a)(2)(A)(i) for the educational ISAs that the ISA provider plans to offer pursuant to such preferred lender arrangement to students attending such covered institution, or to the families of such students, for the next award year.; and (iii) (I)in the case of a covered institution, the information described in subsection (c), for each type of educational ISA offered pursuant to a preferred lender arrangement of the institution to students of the institution or the families of such students; and (II)in the case of an institution-affiliated organization of a covered institution, the information described in section 303(b)(1) of the ISA Student Protection Act of 2023, for each type of educational ISA offered pursuant to a preferred lender arrangement of the organization to students of such institution or the families of such students.; and

501. Equal access to income share agreements It shall be unlawful for any ISA provider to discriminate against any applicant, with respect to any aspect of an income share agreement— on the basis of race, color, religion, national origin, sex or marital status, or age (provided the applicant has the capacity to contract); because all or part of the applicant’s income derives from any public assistance program (except for those excluded from the definition of income established by the income share agreement); or because the applicant has in good faith exercised any right under this Act. It shall not constitute discrimination for purpose of subsection (a) for an ISA provider— to make an inquiry of the applicant’s age or of whether the applicant’s income derives from any public assistance program, if such inquiry is for the purpose of determining the amount and probable continuance of income levels, credit history, or other pertinent element of creditworthiness as provided in regulations of the Bureau; to use any empirically derived credit system that considers age if that system is demonstrably and statistically sound in accordance with regulations of the Bureau, except that in the operation of such a system, the age of an elderly applicant may not be assigned a negative factor or value; to make an inquiry of, or to consider the age of, an elderly applicant when the age of that applicant is to be used by the creditor in the extension of credit in favor of the applicant; or to use any empirically derived system that considers the expected future income of an applicant to determine whether to approve an application or to establish the financial and other terms of an income share agreement, if that empirically derived system is demonstrably and statistically sound and reasonably designed such that approved applicants are all reasonably expected to pay substantially similar effective annual percentage rates as other similarly situated applicants, except that in accordance with any regulations of the Bureau in the operation of such a system to project an applicant’s expected future income, an ISA provider— may not consider an applicant’s status as a member or potential member of any of the classes described in subsection (a); may consider an applicant’s current employment status, current debt and other financial obligations, or current and past income (as of the date of application); or in the case of educational ISAs, may consider the historical income of consumers who have made comparable progress toward the completion of the educational program in which the applicant is or is expected to be enrolled or toward a reasonably comparable educational program. It shall not be a violation of subsection (a) for an ISA provider to refuse to extend an income share agreement— that is offered pursuant to— any financial assistance program expressly authorized by law for an economically disadvantaged class of persons; any financial assistance program administered by a nonprofit organization for its members or an economically disadvantaged class of persons; or any special purpose financial assistance program that— is carried out by a for-profit organization to meet special social needs; and meets standards prescribed in regulations by the Bureau; or if the refusal is required by, or made pursuant to, a program described in paragraph (1). Not later than 30 days (or such longer reasonable time as specified in regulations of the Bureau for any class of income share agreement transaction) after the date on which an ISA provider receives a completed application for an income share agreement, the ISA provider shall notify the applicant of— the action taken by the ISA provider with respect to the application; in the case of an adverse action, a clear and accurate disclosure of the applicant's right to a written statement of reasons in accordance with paragraph (2) within 60 days after receiving the notice under this paragraph; and the identity of the person or office from which the statement of reasons described in paragraph (2) may be obtained. Each applicant against which an adverse action is taken shall be entitled to a written statement from the applicable ISA provider regarding the specific reasons for that adverse action, if the request is made by the applicant not later than 60 days after receiving the notice of an adverse action under paragraph (1). An ISA provider shall provide an applicant with the statement of reasons under subparagraph (A) by the date that is not more than 30 days after the date of the consumer's request. Notwithstanding subparagraph (A), the statement described in this paragraph may be provided orally if the oral notification advises the applicable applicant of the right of the applicant to have the statement of reasons confirmed in writing, upon written request by the applicant. If a third party requests that an ISA provider make a specific extension of an income share agreement directly or indirectly to an applicant, the statement under this paragraph may be made directly by the ISA provider, or indirectly through the third party, if the identity of the ISA provider is disclosed. The requirements of this paragraph may be satisfied by a verbal statement or notification in the case of an ISA provider that acted on not more than 150 applications during the calendar year preceding the calendar year in which the applicable adverse action is taken, as determined under regulations of the Bureau. The Bureau shall prescribe regulations to carry out the purposes of this section. The regulations prescribed under subparagraph (A) may contain such classifications, differentiation, or other provisions, and may provide for such adjustments for any class of transactions, as in the judgment of the Bureau are necessary or proper to effectuate the purposes of this section, to prevent circumvention or evasion of this section, or to facilitate or substantiate compliance with this section. In prescribing regulations under paragraph (1), the Bureau shall be guided by the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) and part 1002 of title 12, Code of Federal Regulations, or any successor regulations. Subject to subparagraph (B), the regulations prescribed under paragraph (1) may exempt from the provisions of this section any class of transactions that is not primarily for personal, family, or household purposes, or any business or commercial income share agreement or investment contract made available by a financial institution, except that a particular type of income share agreement within such a class may be exempted only if the Bureau makes an express finding that applying this section, or of any provision of this section, to the income share agreement would not contribute substantially to effectuating the purposes of this section. An exemption granted under subparagraph (A) shall be— for not longer than 5 years; and extended only if the Bureau makes a subsequent determination, in the manner described by that subparagraph, that the exemption remains appropriate. Pursuant to the regulations prescribed under paragraph (1), an entity making business or commercial income share agreements shall maintain such records or other data relating to those agreements as may be necessary to evidence compliance with this section or enforce any action pursuant to the authority of this section, except that in no event shall those records or data be maintained for a period of less than 1 year. Notwithstanding any power granted to any Federal agency under this section, the deference that a court affords to a Federal agency with respect to a determination made by that agency relating to the meaning or interpretation of any provision of this section that is subject to the jurisdiction of the agency shall be applied as if that agency were the only agency authorized to apply, enforce, interpret, or administer the provisions of this section. The administrative enforcement of this section shall be consistent with section 704 of the Equal Credit Opportunity Act (15 U.S.C. 1691c) and the regulations implementing such section 704. The incentives for self-testing and self-correction under section 704A of the Equal Credit Opportunity Act (15 U.S.C. 1691c–1), and the regulations implementing such section 704A, shall apply to ISA providers offering income share agreements. Section 705 of the Equal Credit Opportunity Act (15 U.S.C. 1691d), and the regulations implementing such section 705, shall apply to ISA providers offering income share agreements in the same manner in which those provisions apply to creditors offering loan products. Section 706 of the Equal Credit Opportunity Act (15 U.S.C. 1691e), and the regulations implementing such section 706, shall apply to ISA providers offering income share agreements. Each year, the Bureau and the Attorney General shall, respectively, submit to Congress reports concerning the administration of the functions of the Bureau and the Attorney General, respectively, under this section, including such recommendations as the Bureau and the Attorney General, respectively, determine necessary or appropriate. Each report of the Bureau submitted under paragraph (1) shall include the assessment of the Bureau of the extent to which compliance with the requirements of this title is being achieved and a summary of the enforcement actions taken by each of the agencies assigned administrative responsibilities under subsection (f).

502. Prohibition on requiring preauthorized electronic fund transfers under the Electronic Fund Transfer Act Section 913(1) of the Electronic Fund Transfer Act (15 U.S.C. 1693k(1)) is amended by inserting , or the entering into an educational ISA or an income share agreement (as those terms are defined in section 2 of the ISA Student Protection Act of 2023) with a consumer after a consumer.

503. Treatment under the Fair Credit Reporting Act Section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c) is amended by adding at the end the following: With respect to an income share agreement (as that term is defined in section 2 of the ISA Student Protection Act of 2023), a consumer report made by a consumer reporting agency— may include a description of the contract terms of the income share agreement and, subject to subsection (a), information with respect to amounts that are owed under the income share agreement; and may not include any speculation about future amounts that may be owed under the income share agreement, including the reporting of any payment caps or early termination amounts. The Bureau shall promulgate regulations with respect to the manner in which ISA providers may furnish, and consumer reporting agencies may report, information regarding income share agreements. (i)Income share agreement informationWith respect to an income share agreement (as that term is defined in section 2 of the ISA Student Protection Act of 2023), a consumer report made by a consumer reporting agency— (1)may include a description of the contract terms of the income share agreement and, subject to subsection (a), information with respect to amounts that are owed under the income share agreement; and (2)may not include any speculation about future amounts that may be owed under the income share agreement, including the reporting of any payment caps or early termination amounts..

504. Treatment under the Fair Debt Collection Practices Act Section 803 of the Fair Debt Collection Practices Act (15 U.S.C. 1692a) is amended— in paragraph (5), by inserting , including such an obligation or alleged obligation arising out of an income share agreement, as that term is defined in section 2 of the ISA Student Protection Act of 2023 before the period at the end; and in paragraph (6), in the first sentence, by inserting , including an ISA provider (as defined in section 2 of the ISA Student Protection Act of 2023), after means any person. Nothing in this section, or the amendments made by this section, may be construed for purposes of any other Federal law as considering— income share agreements as debts, once the ISA recipient owes any amounts to the ISA provider under the income share agreement; or ISA providers as lenders, once the ISA recipient owes any amounts to the ISA provider under the applicable income share agreement.

505. Treatment of educational income share agreements for purposes of Military Lending Act Section 987 of title 10, United States Code, is amended— by redesignating subsection (i) as subsection (j); and by inserting after subsection (h) the following new subsection: The Secretary of Defense shall prescribe regulations to apply this section to educational ISAs (as that term is defined in section 2 of the ISA Student Protection Act of 2023), and an educational ISA shall be deemed to meet the annual percentage rate of interest limitation under subsection (b) of this section if the educational ISA, as applicable, would meet the requirements of section 102(b) of such Act (related to appropriate risk sharing) but with reference to the rate specified in subsection (b) of this section. (i)Treatment of educational income share agreementsThe Secretary of Defense shall prescribe regulations to apply this section to educational ISAs (as that term is defined in section 2 of the ISA Student Protection Act of 2023), and an educational ISA shall be deemed to meet the annual percentage rate of interest limitation under subsection (b) of this section if the educational ISA, as applicable, would meet the requirements of section 102(b) of such Act (related to appropriate risk sharing) but with reference to the rate specified in subsection (b) of this section..

506. Treatment under the Servicemembers Civil Relief Act Section 207 of the Servicemembers Civil Relief Act (50 U.S.C. 3937) is amended— in subsection (d)— by redesignating paragraphs (1) and (2) as paragraphs (2) and (3), respectively; and by inserting before paragraph (2), as redesignated by subparagraph (A), the following new paragraph: The term educational income share agreement has the meaning given the term educational ISA in section 2 of the ISA Student Protection Act of 2023. by redesignating subsections (d) and (e) as subsections (e) and (f), respectively; and by inserting before subsection (e), as redesignated by paragraph (2), the following new subsection (d): An educational income share agreement shall be considered to be in compliance with the requirements of subsection (a) if such agreement is compliant with the requirements of section 102(b) of the ISA Student Protection Act of 2023. In carrying out paragraph (1) of this subsection, the interest rate referred to in section 102(b) of such Act shall be deemed to be the rate of interest specified in subsection (a) of this section. (1)Educational income share agreementThe term educational income share agreement has the meaning given the term educational ISA in section 2 of the ISA Student Protection Act of 2023.; (d)Educational income share agreements (1)In generalAn educational income share agreement shall be considered to be in compliance with the requirements of subsection (a) if such agreement is compliant with the requirements of section 102(b) of the ISA Student Protection Act of 2023. (2)Interest rateIn carrying out paragraph (1) of this subsection, the interest rate referred to in section 102(b) of such Act shall be deemed to be the rate of interest specified in subsection (a) of this section..

507. Preservation of consumers’ claims and defenses Beginning on January 1, 2024, for purposes of applying part 433 of title 16, Code of Federal Regulations (commonly known as the Holder in Due Course Rule or the Holder Rule), the term consumer credit contract, as defined in section 433.1 of such title, shall include income share agreements that— involve the advancing of funds to, or on behalf of, a consumer in return for the consumer’s agreement to an income share agreement; and are related, in whole or substantial part, to a purchase of goods or services from a seller who— refers the consumer to the provider of the income share agreement; or is affiliated with the provider of the income share agreement by common control, contract, or business arrangement. In applying section 433.2 of title 16, Code of Federal Regulations, to a consumer credit contract that is an income share agreement described in subsection (a)— in lieu of the disclosure required under section 433.2(a) of title 16, Code of Federal Regulations, the contract shall contain the following disclosure in at least 10 point, bold face type: NOTICE ANY HOLDER OF THIS INCOME SHARE AGREEMENT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE ISA RECIPIENT COULD ASSERT AGAINST THE SELLER OF THE GOODS OR SERVICES OBTAINED UNDER THE INCOME SHARE AGREEMENT OR WITH THE PROCEEDS OF THE INCOME SHARE AGREEMENT. ANY RECOVERY BY THE ISA RECIPIENT UNDER SUCH A CLAIM OR DEFENSE SHALL NOT EXCEED AMOUNTS PAID BY THE ISA RECIPIENT UNDER THE INCOME SHARE AGREEMENT. in lieu of the disclosure required under section 433.2(b) of title 16, Code of Federal Regulations, the contract shall contain the following disclosure in at least 10 point, bold face type: NOTICE ANY HOLDER OF THIS INCOME SHARE AGREEMENT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE ISA RECIPIENT COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED UNDER THE INCOME SHARE AGREEMENT OR WITH THE PROCEEDS OF THE INCOME SHARE AGREEMENT. ANY RECOVERY UNDER SUCH A CLAIM OR DEFENSE BY THE ISA RECIPIENT SHALL NOT EXCEED AMOUNTS PAID BY THE ISA RECIPIENT UNDER THE INCOME SHARE AGREEMENT. NOTICE ANY HOLDER OF THIS INCOME SHARE AGREEMENT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE ISA RECIPIENT COULD ASSERT AGAINST THE SELLER OF THE GOODS OR SERVICES OBTAINED UNDER THE INCOME SHARE AGREEMENT OR WITH THE PROCEEDS OF THE INCOME SHARE AGREEMENT. ANY RECOVERY BY THE ISA RECIPIENT UNDER SUCH A CLAIM OR DEFENSE SHALL NOT EXCEED AMOUNTS PAID BY THE ISA RECIPIENT UNDER THE INCOME SHARE AGREEMENT.; and NOTICE ANY HOLDER OF THIS INCOME SHARE AGREEMENT IS SUBJECT TO ALL CLAIMS AND DEFENSES WHICH THE ISA RECIPIENT COULD ASSERT AGAINST THE SELLER OF GOODS OR SERVICES OBTAINED UNDER THE INCOME SHARE AGREEMENT OR WITH THE PROCEEDS OF THE INCOME SHARE AGREEMENT. ANY RECOVERY UNDER SUCH A CLAIM OR DEFENSE BY THE ISA RECIPIENT SHALL NOT EXCEED AMOUNTS PAID BY THE ISA RECIPIENT UNDER THE INCOME SHARE AGREEMENT..

601. Treatment under other laws An income share agreement shall not be treated as a contract for insurance, or as a betting or wagering contract, under any Federal or State law, except in the case of a State law that expressly states the law is intended to apply to income share agreements as defined in this Act. Any right that an ISA recipient may have to pay an amount greater than the amount financed under an income share agreement in order to extinguish the income share agreement earlier than the ISA duration or ISA maximum number of payments shall not be subject to any Federal or State law with respect to prepayment penalties, as long as— the prepayment complies with the limitations on income share agreements required under this Act and the amendments made by this Act; and in the case of a State law, the State law does not expressly state that the law is intended to apply to income share agreements as defined in this Act. An income share agreement under this Act is not subject to the application of section 140(e) of the Truth in Lending Act (15 U.S.C. 1650(e)), to the extent it would be applicable to an income share agreement. An educational ISA shall be a valid, binding, and enforceable contract, notwithstanding any State law limiting or otherwise regulating assignments of future wages or other income, except in the case of a State law that expressly states the law is intended to apply to income share agreements as defined in this Act. An educational ISA shall not be subject to a State law with respect to usury, interest rates, fees, and charges for credit, loans, credit or installment sales, or a State law requiring that installment payments be substantially equal in amount, except in the case of a State law that expressly states the law is intended to apply to income share agreements as defined in this Act. An educational ISA shall not be subject to a State law with respect to ability-to-repay requirements, and neither an ISA provider issuing an educational ISA or its successor in interest, nor any entity servicing any educational ISA on behalf of an ISA provider or its successor in interest, shall be subject to any State law with respect to licensing or registration, except in the case of a State law that expressly states the law is intended to apply to income share agreements, as defined in this Act.

602. Relation to State law This Act, other than the provisions of titles I and III and section 501, may not be construed as annulling, altering, or affecting, or exempting any person subject to the provisions of this Act from complying with the statutes, regulations, orders, or interpretations in effect in any State, except to the extent that any such provision of law is inconsistent with the provisions of this Act, and then only to the extent of the inconsistency. For purposes of this subsection, a statute, regulation, order, or interpretation in effect in any State is not inconsistent with the provisions of this Act if the protection that such statute, regulation, order, or interpretation affords to ISA recipients or applicants is greater than the protection provided under this Act. A determination regarding whether a statute, regulation, order, or interpretation in effect in any State is inconsistent with the provisions of this Act may be made by the Bureau on its own motion or in response to a nonfrivolous petition initiated by any interested person. No provision of this Act, except as provided in titles I and III and section 501, shall be construed as modifying, limiting, or superseding the operation of any provision of an enumerated consumer law that relates to the application of a law in effect in any State with respect to such enumerated consumer law. The Bureau shall issue a notice of proposed rulemaking whenever a majority of the States has enacted a resolution in support of the establishment or modification of a consumer protection regulation by the Bureau. Before prescribing a final regulation based upon a notice issued under paragraph (1), the Bureau shall take into account whether— the proposed regulation would afford greater protection to consumers than any existing regulation; the intended benefits of the proposed regulation for consumers would outweigh any increased costs or inconveniences for consumers, and would not discriminate unfairly against any category or class of consumers; and a Federal banking agency has advised that the proposed regulation is likely to present an unacceptable safety and soundness risk to insured depository institutions. The Bureau— shall include a discussion of the considerations required in paragraph (2) in the Federal Register notice of a final regulation prescribed pursuant to this subsection; and whenever the Bureau determines not to prescribe a final regulation, shall publish an explanation of such determination in the Federal Register, and provide a copy of such explanation to each State that enacted a resolution in support of the proposed regulation, the Committee on Banking, Housing, and Urban Affairs of the Senate, and the Committee on Financial Services of the House of Representatives. No provision of this subsection shall be construed as limiting or restricting the authority of the Bureau to enhance consumer protection standards established pursuant to this Act in response to a motion of the Bureau or in response to a request by any other interested person. No provision of this subsection shall be construed as exempting the Bureau from complying with subchapter II of chapter 5 of title 5, United States Code.

701. Enforcement Subject to subtitle B of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5511 et seq.), compliance with the requirements imposed under this Act shall be enforced under— section 8 of the Federal Deposit Insurance Act (12 U.S.C. 1818) by the appropriate Federal banking agency, as defined in section 3(q) of that Act (12 U.S.C. 1813(q)), with respect to— national banks, Federal savings associations, and Federal branches and Federal agencies of foreign banks; member banks of the Federal Reserve System (other than national banks), branches and agencies of foreign banks (other than Federal branches, Federal agencies, and insured State branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25A of the Federal Reserve Act (12 U.S.C. 601 et seq.); and banks and State savings associations insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System), and insured State branches of foreign banks; the Federal Credit Union Act (12 U.S.C. 1751 et seq.), by the Director of the National Credit Union Administration, with respect to any Federal credit union; part A of subtitle VII of title 49, United States Code, by the Secretary of Transportation, with respect to any air carrier or foreign air carrier subject to that part; the Packers and Stockyards Act, 1921 (7 U.S.C. 191 et seq.) (except as provided in section 406 of that Act (7 U.S.C. 226)), by the Secretary of Agriculture, with respect to any activities subject to that Act; the Farm Credit Act of 1971 (12 U.S.C. 2001 et seq.), by the Farm Credit Administration with respect to any Federal land bank, Federal land bank association, Federal intermediate credit bank, or production credit association; subtitle E of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5561 et seq.), by the Bureau, with respect to any person subject to this Act; and sections 21B and 21C of the Securities Exchange Act of 1934 (15 U.S.C. 78u–2, 78u–3), in the case of a broker or dealer, other than a depository institution, by the Securities and Exchange Commission. For the purpose of the exercise by any agency referred to in subsection (a) of its powers under any Act referred to in that subsection, a violation of any requirement imposed under this Act shall be deemed to be a violation of a requirement imposed under that Act. In addition to its powers under any provision of law specifically referred to in subsection (a), each of the agencies referred to in that subsection may exercise, for the purpose of enforcing compliance with any requirement imposed under this Act, any other authority conferred on it by law. Except to the extent that enforcement of the requirements imposed under this Act is specifically committed to some other Government agency under any of paragraphs (1) through (5) of subsection (a), and subject to subtitle B of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5511 et seq.), the Bureau shall be authorized to enforce such requirements. All of the functions and powers of the Bureau under the Consumer Financial Protection Act of 2010 (12 U.S.C. 5301 et seq.) are available to the Bureau to enforce compliance by any person with the requirements under this Act, irrespective of whether that person is engaged in commerce or meets any other jurisdictional tests under the Consumer Financial Protection Act of 2010 (12 U.S.C. 5301 et seq.). The authority of the Bureau to issue regulations under this Act does not impair the authority of any other agency designated in this section to make rules respecting its own procedures in enforcing compliance with requirements imposed under this Act.

702. Reporting requirement for the Bureau of Consumer Financial Protection Not less than frequently than once every 5 years, the Director shall submit to Congress a report that includes— information on the prevalence and utilization of educational ISAs and income share agreements; and any other information pertaining to educational ISAs and income share agreements that the Director determines is appropriate.