II 

116TH CONGRESS 

1ST SESSION S. 2114 

To provide the legal framework and income tax treatment necessary for 

the growth of innovative private financing options, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 15, 2019 

Mr. YOUNG (for himself, Mr. WARNER, Mr. RUBIO, and Mr. COONS) introduced the following bill; which was read twice and referred to the Committee on Finance 

A BILL 

To provide the legal framework and income tax treatment 

necessary for the growth of innovative private financing 

options, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘ISA Student Protection Act of 2019’’. 

6 (b) TABLE OF CONTENTS.—The table of contents for 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definitions. 

TITLE I—TAX TREATMENT OF A QUALIFIED ISA 


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Sec. 101. Tax treatment of proceeds and payments of future income. 

Sec. 102. Terms and conditions of Qualified ISAs. 

Sec. 103. Rulemaking; model disclosure forms. 

Sec. 104. Truth in Lending Act. 

Sec. 105. Consent to continuing release of taxpayer information under Qualified 

ISAs and income-share agreements. 

TITLE II—TREATMENT OF A QUALIFIED ISA UNDER STATE LAW 

Sec. 201. Lawfulness of contracts; preemption of State law. 

Sec. 202. Preemption of State law with respect to usury. 

Sec. 203. Preemption of pre-existing State laws with respect to ability-to-repay 

and licensing laws. 

TITLE III—FEDERAL INDIVIDUAL ASSISTANCE TREATMENT OF A 

QUALIFIED ISA 

Sec. 301. Proceeds not treated as income in calculation of financial need under 

the Higher Education Act of 1965. 

TITLE IV—TREATMENT UNDER SECURITIES LAWS 

Sec. 401. Qualified ISAs not treated as securities. 

Sec. 402. Businesses making Qualified ISAs excluded from investment company 

treatment. 

TITLE V—TREATMENT UNDER FEDERAL CONSUMER FINANCE 

LAWS 

Sec. 501. Qualified ISA anti-discrimination protections. 

Sec. 502. Prohibition on requiring preauthorized electronic fund transfers. 

Sec. 503. Treatment under the Fair Credit Reporting Act. 

Sec. 504. Application of the Fair Debt Collection Practices Act. 

Sec. 505. Application of the Military Lending Act. 

Sec. 506. Application of the Servicemembers Civil Relief Act. 

Sec. 507. Rulemaking. 

TITLE VI—TREATMENT UNDER OTHER LAWS 

Sec. 601. Insurance and wagering. 

Sec. 602. Payments not considered prepayments. 

TITLE VII—REPORTING REQUIREMENT FOR THE BUREAU OF 

CONSUMER FINANCIAL PROTECTION 

Sec. 701. Report. 

1 SEC. 2. DEFINITIONS. 

2 For purposes of this Act: 

3 (1) COMPARABLE LOAN.—The term ‘‘com4 parable loan’’ means, with respect to a Qualified 

5 ISA, a loan that— 


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1 (A) has an original principal amount such 

2 that, after any origination fees on the loan are 

3 paid, the amount of loan financing received by 

4 the individual is equal to the total amount of 

5 funding provided under the Qualified ISA to or 

6 on behalf of the individual subject to the Quali7 fied ISA; 

8 (B) has the same disbursement or funding 

9 date, payment start date, and number of re10 quired monthly payments; and 

11 (C) is fully amortized over such term with 

12 monthly payments of principal and interest. 

13 (2) INCOME-SHARE AGREEMENT.—The term 

14 ‘‘income-share agreement’’ means an agreement— 

15 (A) between an individual and an ISA 

16 funder; 

17 (B) under which— 

18 (i) the ISA funder credits towards the 

19 tuition or other obligations of, or pays 

20 amounts to, or on behalf of, such indi21 vidual for costs associated with a postsec22 ondary training program, or any other pro23 gram designed to increase the individual’s 

24 human capital, employability, or earning 

25 potential (and not limited to programs eliVerDate Sep 11 2014 22:48 Jul 17, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2114.IS S2114

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1 gible to participate as programs under title 

2 IV of the Higher Education Act of 1965 

3 (20 U.S.C. 1070 et seq.)); and 

4 (ii) such individual pays to such ISA 

5 funder (or the ISA funder’s successor in 

6 interest) income-share payments for a de7 fined term; and 

8 (C) is not a loan. 

9 (3) INCOME-SHARE FUNDING.—The term ‘‘in10 come-share funding’’ means— 

11 (A) costs associated with a postsecondary 

12 training program, or any other program de13 signed to increase the individual’s human cap14 ital, employability, or earning potential (and not 

15 limited to programs eligible to participate as 

16 programs under title IV of the Higher Edu17 cation Act of 1965 (20 U.S.C. 1070 et seq.)); 

18 and 

19 (B) an allowance for books, supplies, 

20 transportation, and miscellaneous personal ex21 penses, including a reasonable allowance for— 

22 (i) the documented rental or purchase 

23 of a personal computer; or 

24 (ii) the refinancing of debt used for 

25 the costs described in this subparagraph. 


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1 (4) INCOME-SHARE PAYMENT.—The term ‘‘in2 come-share payment’’ means an amount equal to a 

3 specified percentage of the future income of an indi4 vidual. 

5 (5) ISA FUNDER.—With respect to a Qualified 

6 ISA, the term ‘‘ISA funder’’ means the party to the 

7 Qualified ISA who— 

8 (A) credits towards the tuition or other ob9 ligations of, or pays amounts to, or on behalf 

10 of, an individual solely for the purposes speci11 fied in paragraph (3)(A)(i); and 

12 (B) has the right to receive a specified per13 centage of the individual’s future income. 

14 (6) QUALIFIED ISA.—The term ‘‘Qualified ISA’’ 

15 means an agreement between an individual and an 

16 ISA funder that— 

17 (A) is not a loan, but is an income-share 

18 agreement under which— 

19 (i) the ISA funder credits towards the 

20 tuition or other obligations of, or pays 

21 amounts to, or on behalf of, such indi22 vidual for income-share funding; and 

23 (ii) such individual pays to such ISA 

24 funder (or the ISA funder’s successor in 

25 interest); and 


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1 (B) meets the requirements of subsections 

2 (a) and (b) of section 102. 

3 (7) STATE.—The term ‘‘State’’ means the sev4 eral States of the United States, the Commonwealth 

5 of Puerto Rico, the District of Columbia, Guam, 

6 American Samoa, the Virgin Islands, the govern7 ment of the Northern Mariana Islands, and the 

8 Trust Territory of the Pacific Islands. 

9 (8) STATE LAW.—The term ‘‘State law’’ 

10 means— 

11 (A) any law, decision, rule, regulation, or 

12 other action having the effect of a law of any 

13 State or any political subdivision of a State, or 

14 any agency or instrumentality of a State or po15 litical subdivision of a State; and 

16 (B) any law of the United States applica17 ble only to the District of Columbia. 

18 TITLE I—TAX TREATMENT OF A 

19 QUALIFIED ISA 

20 SEC. 101. TAX TREATMENT OF PROCEEDS AND PAYMENTS 

21 OF FUTURE INCOME. 

22 For purposes of the Internal Revenue Code of 1986: 

23 (1) FUNDING EXCLUDED FROM GROSS IN24 COME.—In the case of an individual, gross income 

25 shall not include the amount of any income-share 


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1 funding that is credited toward the tuition or other 

2 obligations of, or paid to or on behalf of, such indi3 vidual under a Qualified ISA. 

4 (2) DIFFERENCE IN REPAYMENT NOT IN5 CLUDED AS GROSS INCOME.—In the case of a Quali6 fied ISA under which the income-share funding ex7 ceeds the total income-share payments (in any pe8 riod over the life of the contract), the individual’s 

9 gross income shall not include the amount of such 

10 excess. 

11 (3) TREATMENT OF PAYMENTS OF FUTURE IN12 COME.—The amount of any income-share payments 

13 under a Qualified ISA shall be treated— 

14 (A) first, with respect to so much of such 

15 amount as does not exceed the income-share 

16 funding under such Qualified ISA, as a recov17 ery of investment (with a corresponding reduc18 tion in basis) in the contract; and 

19 (B) second, as income on the contract 

20 which is includible in gross income. 

21 SEC. 102. TERMS AND CONDITIONS OF QUALIFIED ISAS. 

22 (a) TERMS AND CONDITIONS.—Each Qualified ISA 

23 shall comply with the following: 

24 (1) SPECIFIED PERCENTAGE OF INCOME.— 


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1 (A) IN GENERAL.—The Qualified ISA 

2 specifies the percentage of future income re3 quired to be paid. 

4 (B) MAXIMUM PERCENTAGE.—The max5 imum percentage of income an individual would 

6 be required to pay under the Qualified ISA 

7 shall not exceed 20 percent, and the product of 

8 such percentage and the number of monthly 

9 payments required under the Qualified ISA di10 vided by 12 shall not exceed 2.25 (which figure 

11 is the product of 7.5 percent and the number 

12 of years in the longest allowable contract under 

13 paragraph (4)(A)). 

14 (2) DEFINITION OF INCOME.—The Qualified 

15 ISA specifies the definition of income to be used for 

16 purposes of calculating an individual’s obligation to 

17 pay under the Qualified ISA, which— 

18 (A) shall not in any case include the in19 come of the individual’s children; 

20 (B) shall not include— 

21 (i) any amount paid to the individual 

22 under title II or XVI of the Social Security 

23 Act (42 U.S.C. 401 et seq., 1381 et seq.) 

24 or under a State program funded title IV 


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1 under of such Act (42 U.S.C. 601 et seq.); 

2 or 

3 (ii) any amount received by the indi4 vidual under the Child Nutrition Act of 

5 1966 (42 U.S.C. 1771 et seq.); 

6 (C) shall include revenue sources primarily 

7 incurred from an individual’s employment; and 

8 (D) may include another revenue source 

9 besides employment if an individual has volun10 tarily chosen to not seek employment and is 

11 still receiving significant revenue from another 

12 source. 

13 (3) AFFORDABILITY FOR LOW AFTER-SCHOOL

14 INCOME.— 

15 (A) IN GENERAL.—The Qualified ISA pro16 vides that when an individual subject to the 

17 Qualified ISA has an income that is equal to or 

18 below the threshold amount described in sub19 paragraph (B), the percentage of income obliga20 tion for the individual is zero. 

21 (B) THRESHOLD AMOUNT.—The threshold 

22 amount under this subparagraph is an amount 

23 equal to (or at the option of the ISA funder, 

24 greater than)— 


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1 (i) 200 percent of the poverty line for 

2 a single person (as defined in section 673 

3 of the Community Services Block Grant 

4 Act (42 U.S.C. 9902)); or 

5 (ii) in the case of a Qualified ISA en6 tered into before January 1, 2020, 150 

7 percent of such poverty line for a single 

8 person. 

9 (C) ALLOWANCE OF FEES OR NOMINAL

10 PAYMENTS.—Subparagraph (A) shall not be in11 terpreted to preclude the charging of fees or 

12 nominal payments (as described in paragraph 

13 (8)) during this period. 

14 (4) SPECIFIED DURATION; EXTENSION OF PE15 RIOD.— 

16 (A) DURATION.—The Qualified ISA speci17 fies the maximum period of time during which 

18 the individual will be obligated to make a speci19 fied number of monthly payments of a percent20 age of the individual’s future income (excluding 

21 periods when just a nominal payment (as de22 scribed under paragraph (8)) is required), 

23 which may not (except as provided in subpara24 graph (B)) exceed 360 months. 


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1 (B) EXTENSION OF PERIOD.—The Quali2 fied ISA may provide for the extension of such 

3 period by the number of months during which 

4 the individual’s percentage of income obligation 

5 (excluding nominal payments and fees) was 

6 zero. 

7 (5) EARLY TERMINATION.—The Qualified ISA 

8 specifies the terms and conditions under which the 

9 individual subject to the agreement may terminate 

10 the agreement. 

11 (6) APPROPRIATE RISK SHARING.—The pay12 ments required under the Qualified ISA for an indi13 vidual with income during the payment term that is 

14 less than or equal to 225 percent of the poverty line 

15 for a single person (as defined in section 673 of the 

16 Community Services Block Grant Act (42 U.S.C. 

17 9902)) shall not exceed the payments on a com18 parable loan that bears interest at a rate less than 

19 or equal to the annual percentage rate of interest 

20 limitation under section 987(b) of title 10, United 

21 States Code. 

22 (7) AGGREGATE LIMITATION ON OBLIGATION.— 

23 The Qualified ISA provides that the total percentage 

24 of future income of the individual that the individual 

25 agrees to pay, under the current Qualified ISA and 


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1 any other Qualified ISAs previously entered into by 

2 the individual, shall not exceed 20 percent. 

3 (8) NOMINAL PAYMENTS.—The Qualified ISA 

4 specifies any nominal monthly payment that is re5 quired during periods when the individual subject to 

6 the Qualified ISA has no percentage of income obli7 gation, except that— 

8 (A) such nominal monthly payment shall 

9 not exceed twenty-five dollars per month (ad10 justed each year to reflect changes in the Con11 sumer Price Index for All Urban Consumers 

12 published by the Bureau of Labor Statistics of 

13 the Department of Labor for the most recent 

14 12-month period for which the data are avail15 able); and 

16 (B) the total number of nominal payments 

17 that may be required shall not exceed the max18 imum number of allowable payments described 

19 in paragraph (4)(A). 

20 (9) PROTECTIONS.— 

21 (A) IN GENERAL.—The Qualified ISA 

22 specifies, at a minimum, individual rights with 

23 respect to each of the following: 

24 (i) Default or delinquency. 

25 (ii) Overpayment or underpayment. 


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1 (iii) Disability. 

2 (iv) Death. 

3 (v) Service as a member of the armed 

4 services (including the National Guard and 

5 Reserves). 

6 (B) PRIOR ISAS.—If a Qualified ISA exe7 cuted prior to the date of enactment of this Act 

8 does not meet the requirements in subpara9 graph (A), the ISA funder shall come into com10 pliance with such subparagraph by issuing, not 

11 later than 180 days after the date of enactment 

12 of this Act, an addendum to the Qualified ISA 

13 that contains the information described in such 

14 subparagraph. 

15 (b) REQUIRED DISCLOSURES.— 

16 (1) IN GENERAL.—An ISA funder of a Quali17 fied ISA shall provide, to any individual intending to 

18 commit under a Qualified ISA to pay future income 

19 and before the individual enters into the agreement 

20 under the Qualified ISA, a written document that 

21 clearly and simply discloses— 

22 (A) that the Qualified ISA is not credit or 

23 a loan, and that the amount the individual will 

24 be required to pay under the Qualified ISA— 


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1 (i) may be more or less than the 

2 amount provided to the individual pursu3 ant to the Qualified ISA; and 

4 (ii) will vary in proportion to the indi5 vidual’s future income; 

6 (B) that the obligations of the individual 

7 under the Qualified ISA are dischargeable 

8 under bankruptcy law; 

9 (C) a description of the terms in which the 

10 obligations of the individual under the Qualified 

11 ISA shall be extinguished in advance of full du12 ration of the agreed-to term; 

13 (D) the duration of the individual’s obliga14 tions under the Qualified ISA (absent such ex15 tinguishment), including any circumstances 

16 under which the duration of the Qualified ISA 

17 would be extended or extinguished; 

18 (E) the percentage of income the individual 

19 is committing to pay under the Qualified ISA, 

20 including whether the percentage of income is 

21 fixed or variable under the Qualified ISA, and 

22 the minimum amount of annual income that 

23 triggers the individual’s obligation under the 

24 Qualified ISA to make payments for such year; 


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1 (F) the definition of income to be used for 

2 purposes of calculating the individual’s obliga3 tion under the Qualified ISA; 

4 (G)(i) a comparison of— 

5 (I) the amounts and number of pay6 ments an individual would be required to 

7 pay under the Qualified ISA at a range of 

8 annual income levels, which income levels 

9 shall correspond to the levels the individual 

10 might reasonably be expected to make 

11 given the intended use of the funds pro12 vided under the Qualified ISA, as deter13 mined in accordance with guidance issued 

14 by the Director of the Bureau of Consumer 

15 Financial Protection; to 

16 (II) the amounts and number of pay17 ments required to be paid under one or 

18 more comparable loans, including, at a 

19 minimum— 

20 (aa) a loan at a fixed or variable 

21 interest rate and with a number of 

22 payments determined by the Director 

23 of the Bureau of Consumer Financial 

24 Protection to be an approximation of 

25 the fixed or variable interest rate 


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1 available to student loan borrowers in 

2 the private marketplace; and 

3 (bb) a comparable Federal Direct 

4 PLUS loan under part D of title IV 

5 of the Higher Education Act of 1965 

6 (20 U.S.C. 1087a et seq.), if the indi7 vidual would be eligible for such a 

8 loan; and 

9 (ii) a prominent notice accompanying the 

10 comparison that clearly and conspicuously ad11 vises that loan payments may be required re12 gardless of the income of an individual; 

13 (H) income verification documentation, in14 cluding personal tax records submitted to the 

15 Internal Revenue Service, that the individual 

16 may be required to provide under the Qualified 

17 ISA; 

18 (I) intent to conduct annual reconciliation 

19 relating to obligations owed by the individual 

20 under the Qualified ISA; and 

21 (J) any nominal payments, as described in 

22 subsection (a)(8), required under the Qualified 

23 ISA. 

24 (2) NO OTHER MATERIAL TERMS.—The Quali25 fied ISA disclosures required by paragraph (1) shall 


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1 be provided in a clear and conspicuous manner, and 

2 shall not be disclosed together with any other mate3 rial terms or conditions that may be applicable to 

4 the Qualified ISA. 

5 (c) NON-INTERFERENCE.—A Qualified ISA rep6 resents an obligation by the individual to pay the specific 

7 percentage of future income, but shall not be construed 

8 to give the contract holder any rights over an individual’s 

9 actions other than as provided in this Act. 

10 (d) EFFECT OF FAILURE TO PROVIDE DOCUMENTA11 TION.— 

12 (1) IN GENERAL.—Absent income documenta13 tion from an individual under a Qualified ISA, the 

14 ISA funder of such Qualified ISA (or the funder’s 

15 successor in interest) may assume a certain monthly 

16 income level for the individual, up to the greater 

17 of— 

18 (A) the level that would create an obliga19 tion that is approximately equal to the amount 

20 required to return the initial Qualified ISA 

21 amount to the ISA funder over the remaining 

22 required payments; or 

23 (B) the average monthly income for the in24 dividual from the previous 6 months of employ25 ment. 


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1 (2) TREATMENT UNDER STATE LAW.—Any obli2 gation resulting from an assumed income level under 

3 paragraph (1) shall not be considered to be imposing 

4 an unlawful fee under a State law unless such State 

5 law expressly states that it is intended to apply to 

6 Qualified ISAs. 

7 (3) VERIFICATION OF INCOME.—If an indi8 vidual supplies an ISA funder (or the funder’s suc9 cessor in interest) with the individual’s income 

10 verification information within 180 days of the ISA 

11 funder (or the funder’s successor in interest) assum12 ing an income level for such individual under para13 graph (1), the individual shall be entitled to have 

14 any payments that were made in excess of the indi15 vidual’s actual obligation under the contract either 

16 refunded to the individual or credited to future obli17 gations under the Qualified ISA. 

18 SEC. 103. RULEMAKING; MODEL DISCLOSURE FORMS. 

19 (a) NO BUREAU GENERAL RULEMAKING AUTHOR20 ITY.—Except as provided under subsection (b) and section 

21 102(b)(1)(G), the Director of the Bureau of Consumer Fi22 nancial Protection may not issue regulations under this 

23 title or pursuant to any other authority granted to the 

24 Bureau of Consumer Financial Protection under the 


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1 Dodd-Frank Wall Street Reform and Consumer Protec2 tion Act (Public Law 111–203). 

3 (b) MODEL DISCLOSURE FORMS.— 

4 (1) IN GENERAL.—Not later than 180 days 

5 after the date of the enactment of this Act, the Di6 rector of the Bureau of Consumer Financial Protec7 tion, after engaging in appropriate consumer testing 

8 of such forms, shall promulgate a model disclosure 

9 form for the disclosures required under section 

10 102(b). 

11 (2) SAFE HARBOR.—Any person who uses the 

12 model disclosure form promulgated pursuant to 

13 paragraph (1) and includes accurate information re14 quired under section 102(b) shall be deemed to be 

15 in compliance with the disclosure requirements 

16 under section 102(b) and shall not be subject to any 

17 State law (including regulations) to the extent that 

18 such law imposes any additional or differing disclo19 sure requirements. 

20 SEC. 104. TRUTH IN LENDING ACT. 

21 Any Qualified ISA shall not be considered credit and 

22 ISA funders (and their successors in interest) shall not 

23 be considered creditors, as those terms are defined in sec24 tion 103 of the Truth in Lending Act (15 U.S.C. 1602). 


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1 SEC. 105. CONSENT TO CONTINUING RELEASE OF TAX2 PAYER INFORMATION UNDER QUALIFIED 

3 ISAS AND INCOME-SHARE AGREEMENTS. 

4 By not later than 180 days after the date of enact5 ment of this Act, the Secretary of the Treasury shall mod6 ify Treasury Regulations and guidance to provide for con7 tinuing consent to disclosure of an individual’s return in8 formation to an ISA funder (or the funder’s successor in 

9 interest) under a Qualified ISA or income-share agree10 ment, but only for periods relevant to, and only to the 

11 extent the Secretary determines is necessary and appro12 priate in carrying out the terms of, such Qualified ISA 

13 or income-share agreement. 

14 TITLE II—TREATMENT OF A 

15 QUALIFIED ISA UNDER STATE 

16 LAW 

17 SEC. 201. LAWFULNESS OF CONTRACTS; PREEMPTION OF 

18 STATE LAW. 

19 (a) IN GENERAL.—A Qualified ISA shall be a valid, 

20 binding, and enforceable contract notwithstanding any 

21 State law limiting or otherwise regulating assignments of 

22 future wages or other income. 

23 (b) GOOD FAITH RELIANCE.—An ISA funder may 

24 rely in good faith on a statement from the individual obli25 gated by a Qualified ISA with respect to such individual’s 

26 aggregate obligation on the Qualified ISA. 


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1 SEC. 202. PREEMPTION OF STATE LAW WITH RESPECT TO 

2 USURY. 

3 A Qualified ISA shall not be subject to State law with 

4 respect to usury, credit, loans, or credit or installment 

5 sales, unless such State law expressly states that it is in6 tended to apply to Qualified ISAs. 

7 SEC. 203. PREEMPTION OF PRE-EXISTING STATE LAWS 

8 WITH RESPECT TO ABILITY-TO-REPAY AND 

9 LICENSING LAWS. 

10 A Qualified ISA shall not be subject to a State law 

11 with respect to ‘‘ability-to-repay’’ requirements, and nei12 ther an ISA funder issuing a Qualified ISA, its successor 

13 in interest, nor any entity servicing any Qualified ISA on 

14 behalf of an ISA funder or its successor interest, shall be 

15 subject to any State law with respect to ISA licensing or 

16 registration, unless such State law was issued after the 

17 date of the enactment of this Act and such State law ex18 pressly states that it is intended to apply to Qualified 

19 ISAs. 


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1 TITLE III—FEDERAL INDIVIDUAL 

2 ASSISTANCE TREATMENT OF 

3 A QUALIFIED ISA 

4 SEC. 301. PROCEEDS NOT TREATED AS INCOME IN CAL5 CULATION OF FINANCIAL NEED UNDER THE 

6 HIGHER EDUCATION ACT OF 1965. 

7 No portion of any amounts received by an individual 

8 for entering into a Qualified ISA or an income-share 

9 agreement shall be included as income or assets in the 

10 computation of expected family contribution for any pro11 gram funded in whole or in part under the Higher Edu12 cation Act of 1965 (20 U.S.C. 1001 et seq.). 

13 TITLE IV—TREATMENT UNDER 

14 SECURITIES LAWS 

15 SEC. 401. QUALIFIED ISAS NOT TREATED AS SECURITIES. 

16 A Qualified ISA and an income-share agreement shall 

17 not be treated as a security for purposes of the securities 

18 laws (as defined in section 3(a) of the Securities Exchange 

19 Act of 1934 (15 U.S.C. 78c(a))), any similar State law, 

20 or any State law that directly or indirectly prohibits, lim21 its, or imposes conditions, based on the merits of an offer22 ing or issuer of securities, upon the offer or sale of any 

23 security. Nothing in the preceding sentence may be con24 strued to prevent an instrument that is collateralized by, 

25 or serviced by the cash flows of, a Qualified ISA from 


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1 being treated as a security for purposes of any law de2 scribed in that sentence. 

3 SEC. 402. BUSINESSES MAKING QUALIFIED ISAS EXCLUDED 

4 FROM INVESTMENT COMPANY TREATMENT. 

5 Section 3(c) of the Investment Company Act of 1940 

6 (15 U.S.C. 80a–3(c)) is amended— 

7 (1) in paragraph (4), by inserting ‘‘Qualified 

8 ISAs or income-share agreements (as those terms 

9 are defined in section 2 of the ISA Student Protec10 tion Act of 2019),’’ after ‘‘industrial banking,’’; and 

11 (2) in paragraph (5)— 

12 (A) by inserting ‘‘, including purchasing or 

13 otherwise acquiring Qualified ISAs or income14 share agreements (as those terms are defined in 

15 section 2 of the ISA Student Protection Act of 

16 2019)’’ after ‘‘services’’ the first place it ap17 pears; and 

18 (B) by inserting ‘‘, including making 

19 Qualified ISAs or income-share agreements (as 

20 so defined)’’ after ‘‘services’’ the second place it 

21 appears. 


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1 TITLE V—TREATMENT UNDER 

2 FEDERAL CONSUMER FI3 NANCE LAWS 

4 SEC. 501. QUALIFIED ISA ANTI-DISCRIMINATION PROTEC5 TIONS. 

6 The Equal Credit Opportunity Act (15 U.S.C. 1691 

7 et seq.) is amended— 

8 (1) in section 701(b) (15 U.S.C. 1691(b))— 

9 (A) in the matter preceding paragraph (1), 

10 by inserting ‘‘or an ISA funder or its successor 

11 in interest’’ after ‘‘creditor’’; 

12 (B) in paragraph (4), by striking ‘‘or’’ at 

13 the end; 

14 (C) in paragraph (5), by striking the pe15 riod at the end and inserting ‘‘; or’’; and 

16 (D) by adding at the end the following: 

17 ‘‘(6) to set the terms of a Qualified ISA or an 

18 income-share agreement (as those terms are defined 

19 in section 2 of the ISA Student Protection Act of 

20 2019), based on the earnings reasonably anticipated 

21 by the creditor with respect to any program of 

22 study, certificate program, degree program, or insti23 tutions of higher education where a Qualified ISA is 

24 offered.’’; and 

25 (2) in section 702 (15 U.S.C. 1691a)— 


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•S 2114 IS

1 (A) in subsection (d), by inserting ‘‘, or the 

2 right granted under a Qualified ISA or an in3 come-share agreement (as those terms are de4 fined in section 2 of the ISA Student Protection 

5 Act of 2019)’’ before the period at the end; and 

6 (B) in subsection (e)— 

7 (i) by striking ‘‘or any assignee’’ and 

8 inserting ‘‘any assignee’’; and 

9 (ii) by inserting ‘‘or any person who 

10 regularly extends, renews, or continues 

11 funding under a qualified ISA or an in12 come-share agreement (as those terms are 

13 defined in section 2 of the ISA Student 

14 Protection Act of 2019)’’ before the period 

15 at the end. 

16 SEC. 502. PROHIBITION ON REQUIRING PREAUTHORIZED 

17 ELECTRONIC FUND TRANSFERS. 

18 Section 913(1) of the Electronic Fund Transfer Act 

19 (15 U.S.C. 1693k(1)) is amended by inserting ‘‘or the en20 tering into a Qualified ISA or an income-share agreement 

21 (as those terms are defined in section 2 of the ISA Stu22 dent Protection Act of 2019) with a consumer’’ after ‘‘a 

23 consumer’’. 


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•S 2114 IS

1 SEC. 503. TREATMENT UNDER THE FAIR CREDIT REPORT2 ING ACT. 

3 (a) IN GENERAL.—Section 605 of the Fair Credit 

4 Reporting Act (15 U.S.C. 1681c) is amended by adding 

5 at the end the following: 

6 ‘‘(i) QUALIFIED ISA INFORMATION.—With respect to 

7 a Qualified ISA or an income-share agreement (as those 

8 terms are defined in section 2 of the ISA Student Protec9 tion Act of 2019), a consumer report made by a consumer 

10 reporting agency— 

11 ‘‘(1) may include a description of the contract 

12 terms of the Qualified ISA or income-share agree13 ment, as applicable, and, subject to subsection (a), 

14 information with respect to amounts that are owed 

15 under the Qualified ISA; and 

16 ‘‘(2) may not include any speculation about fu17 ture amounts that may be owed under the Qualified 

18 ISA or income-share agreement, as applicable.’’. 

19 (b) REGULATIONS.—The Director of the Bureau of 

20 Consumer Financial Protection shall promulgate regula21 tions with respect to the manner in which ISA funders 

22 may furnish, and consumer reporting agencies may report, 

23 information regarding Qualified ISAs and income-share 

24 agreements. 


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•S 2114 IS

1 SEC. 504. APPLICATION OF THE FAIR DEBT COLLECTION 

2 PRACTICES ACT. 

3 (a) IN GENERAL.—Section 803 of the Fair Debt Col4 lection Practices Act (15 U.S.C. 1692a) is amended— 

5 (1) in paragraph (5), by inserting ‘‘, including 

6 a Qualified ISA and an income-share agreement, as 

7 those terms are defined in section 2 of the ISA Stu8 dent Protection Act of 2019’’ before the period at 

9 the end; and 

10 (2) in paragraph (6), in the first sentence, by 

11 inserting ‘‘, including an ISA funder, as defined in 

12 section 2 of the ISA Student Protection Act of 

13 2019,’’ after ‘‘means any person’’. 

14 (b) RULE OF CONSTRUCTION.—Nothing in this sec15 tion, or the amendments made by this section, may be con16 strued for purposes of any other Federal law as consid17 ering— 

18 (1) Qualified ISAs or income-share agreements 

19 as debts; or 

20 (2) ISA funders as debt collectors. 

21 SEC. 505. APPLICATION OF THE MILITARY LENDING ACT. 

22 Section 987 of title 10, United States Code, is 

23 amended— 

24 (1) by redesignating subsection (i) as subsection 

25 (j); and 


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•S 2114 IS

1 (2) by inserting after subsection (h) the fol2 lowing new subsection: 

3 ‘‘(i) TREATMENT OF QUALIFIED ISAS AND INCOME4 SHARE AGREEMENTS.—The Secretary of Defense shall 

5 issue regulations to apply this section to Qualified ISAs 

6 and income-share agreements (as those terms are defined 

7 in section 2 of the ISA Student Protection Act of 2019), 

8 and a Qualified ISA and an income-share agreement shall 

9 be deemed to meet the annual percentage rate of interest 

10 limitation under subsection (b) if the Qualified ISA or in11 come-share agreement, as applicable, would meet the re12 quirements of section 102(a)(6) of such Act (related to 

13 appropriate risk sharing) but with reference to the rate 

14 specified in subsection (b).’’. 

15 SEC. 506. APPLICATION OF THE SERVICEMEMBERS CIVIL 

16 RELIEF ACT. 

17 Section 207 of the Servicemembers Civil Relief Act 

18 (50 U.S.C. 3937) is amended by adding at the end the 

19 following: 

20 ‘‘(f) TREATMENT OF QUALIFIED ISAS AND INCOME21 SHARE AGREEMENTS.—The Secretary of Defense shall 

22 issue regulations to apply this section to Qualified ISAs 

23 and income-share agreements (as those terms are defined 

24 in section 2 of the ISA Student Protection Act of 2019), 

25 specifically by stating that a Qualified ISA and an incomeVerDate Sep 11 2014 22:48 Jul 17, 2019 Jkt 089200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S2114.IS S2114

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1 share agreement shall be considered to have met the re2 quirements of this section if the Qualified ISA or income3 share agreement, as applicable, would meet the require4 ments of section 102(a)(6) of such Act (relating to appro5 priate risk sharing) but with reference to the rate specified 

6 in subsection (a)(1).’’. 

7 SEC. 507. RULEMAKING. 

8 Not later than 180 days after the date of enactment 

9 of this Act— 

10 (1) the Director of the Bureau of Consumer Fi11 nancial Protection, in consultation with such other 

12 agency heads as the Director considers appropriate, 

13 shall issue regulations to carry out the amendments 

14 made by sections 501, 502, and 503; and 

15 (2) the Secretary of Defense shall issue regula16 tions to carry out the amendments made by sections 

17 505 and 506. 

18 TITLE VI—TREATMENT UNDER 

19 OTHER LAWS 

20 SEC. 601. INSURANCE AND WAGERING. 

21 A Qualified ISA and an income-share agreement shall 

22 not be treated as a contract for insurance or a betting 

23 or wagering contract under any Federal or State law. 


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1 SEC. 602. PAYMENTS NOT CONSIDERED PREPAYMENTS. 

2 With respect to a Qualified ISA or an income-share 

3 agreement, any requirement that an individual pay an 

4 amount greater than the income-share funding in order 

5 to extinguish the Qualified ISA obligation or income-share 

6 agreement, as applicable, earlier than the end of the term 

7 shall not be subject to any Federal or State law with re8 spect to prepayment penalties. 

9 TITLE VII—REPORTING RE10 QUIREMENT FOR THE BU11 REAU OF CONSUMER FINAN12 CIAL PROTECTION 

13 SEC. 701. REPORT. 

14 Not less than frequently than once every 5 years, the 

15 Director of the Bureau of Consumer Financial Protection 

16 shall submit to Congress a report that includes— 

17 (1) information on the prevalence and utiliza18 tion of Qualified ISAs and income-share agreements; 

19 and 

20 (2) any other information pertaining to Quali21 fied ISAs and income-share agreements that the Di22 rector determines is appropriate. 

Æ 


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