ISA Student Protection Act of 2022
Bill: S.4551 | Sponsor: Sen. Young, Todd (R-IN)
Policy area: Finance and Financial Sector

Summary:
ISA Student Protection Act of 2022
This bill sets forth consumer protections and other requirements for educational income share agreements (ISAs). In an educational ISA, a provider credits or advances funding for a recipient's postsecondary education or other training; in turn, the recipient agrees to pay the provider a percentage of the recipient's future earnings over a set period of time. (The Department of Education currently considers educational ISAs as private education loans for the purposes of preferred lender arrangement disclosures.)
Under the bill, the recipient is only obligated to pay back the provider if the recipient earns over a certain amount. The recipient's obligation to pay ends at the specified time even if the recipient does not pay back the full amount of the funding. Further, payments are limited to 20% of the recipient's income. Recipients earning under a certain threshold are exempt from payments.
If a recipient files for bankruptcy, ISAs are not subject to the same undue hardship standard typical of student loan discharges, therefore making these agreements easier to discharge. The bill also applies current consumer loan protections to these agreements. A provider must make certain disclosures to the recipient before entering into an ISA, including how payments are calculated, the length of the agreement, and how these agreements compare to student loan options.
The bill establishes the tax treatment of ISAs, including by exempting from taxable income the amounts received under an ISA.

To provide a consumer protection framework necessary to support the 
growth of accessible, affordable, and accountable financing options for 
            postsecondary education, and for other purposes.

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``ISA Student 
Protection Act of 2022''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
Sec. 3. Effective date.
 TITLE I--NEW CONSUMER PROTECTIONS SPECIFIC TO INCOME SHARE AGREEMENTS

Sec. 101. Prohibition on acceleration; treatment of early completion 
                            mechanisms.
Sec. 102. Consumer protections for educational income share agreements.
Sec. 103. Discharge protections for ISA recipients.
Sec. 104. Limitation on amounts treated as income under educational 
                            ISAs.
           TITLE II--TAX TREATMENT OF INCOME SHARE AGREEMENTS

Sec. 201. Tax treatment.
      TITLE III--DISCLOSURES APPLICABLE TO INCOME SHARE AGREEMENTS

Sec. 301. Disclosures.
Sec. 302. Required disclosures for income share agreements.
Sec. 303. Additional requirements for educational ISAs.
Sec. 304. Advertising of income share agreements.
         TITLE IV--OTHER CLARIFICATIONS TO SUPPORT ISA PROGRAMS

Sec. 401. Treatment under securities laws.
Sec. 402. Treatment under bankruptcy laws.
Sec. 403. Consent to continuing release of taxpayer information under 
                            educational ISAs and income share 
                            agreements.
Sec. 404. Interplay with the Higher Education Act of 1965.
    TITLE V--APPLYING EXISTING CONSUMER PROTECTIONS TO INCOME SHARE 
                               AGREEMENTS

Sec. 501. Equal access to income share agreements.
Sec. 502. Prohibition on requiring preauthorized electronic fund 
                            transfers under the Electronic Fund 
                            Transfer Act.
Sec. 503. Treatment under the Fair Credit Reporting Act.
Sec. 504. Treatment under the Fair Debt Collection Practices Act.
Sec. 505. Treatment of educational income share agreements for purposes 
                            of Military Lending Act.
Sec. 506. Treatment under the Servicemembers Civil Relief Act.
Sec. 507. Preservation of consumers' claims and defenses.
                    TITLE VI--RELATION TO OTHER LAWS

Sec. 601. Treatment under other laws.
Sec. 602. Relation to State law.
                  TITLE VII--ENFORCEMENT AND REPORTING

Sec. 701. Enforcement.
Sec. 702. Reporting requirement for the Bureau of Consumer Financial 
                            Protection.

SEC. 2. DEFINITIONS.

    In this Act:
            (1) Adverse action.--The term ``adverse action''--
                    (A) 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
                    (B) 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--
                            (i) the applicant is delinquent or 
                        otherwise in default; or
                            (ii) such additional amounts would exceed a 
                        previously established limit on the amount 
                        financed.
            (2) 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.
            (3) Annual percentage rate.--The term ``annual percentage 
        rate'' means the annual percentage rate described in section 
        1026.22(a) of title 12, Code of Federal Regulations.
            (4) Applicant.--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.
            (5) Bureau.--The term ``Bureau'' means the Bureau of 
        Consumer Financial Protection.
            (6) Comparable loan.--The term ``comparable loan'' means, 
        with respect to an income share agreement, a loan that--
                    (A) 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;
                    (B) has--
                            (i) the same disbursements or financing 
                        dates, payment start date, and frequency of 
                        payments as the income share agreement; and
                            (ii) an expected number of payments equal 
                        to the ISA maximum number of payments; and
                    (C) is fully amortized over the ISA duration, with 
                substantially equal periodic payments of principal and 
                interest.
            (7) Consumer.--The term ``consumer'' means a natural person 
        using an income share agreement for personal, family, or 
        household purposes.
            (8) Consumer protection regulation.--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).
            (9) Covered educational institution.--The term ``covered 
        educational institution''--
                    (A) means--
                            (i) 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
                            (ii) an institution-affiliated 
                        organization, as defined in section 151 of the 
                        Higher Education Act of 1965 (20 U.S.C. 1019); 
                        and
                    (B) includes an agent, officer, or employee of the 
                institution of higher education or institution-
                affiliated organization.
            (10) Date of the isa.--The term ``date of the ISA'' means 
        the date that is the later of--
                    (A) the date on which the income share agreement is 
                signed by the ISA recipient and the ISA provider; or
                    (B) the date on which the income share agreement is 
                accepted by the ISA recipient and the ISA provider.
            (11) Director.--The term ``Director'' means the Director of 
        the Bureau.
            (12) Disbursement.--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.
            (13) Educational isa; educational income share agreement.--
        The term ``educational ISA'' or ``educational income share 
        agreement''--
                    (A) means an income share agreement that--
                            (i) 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;
                            (ii) pays amounts to, or on behalf of, the 
                        ISA recipient for--
                                    (I) 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.));
                                    (II) any personal expenses (such as 
                                books, supplies, transportation, and 
                                living costs) incurred by the 
                                individual while enrolled in a program 
                                described in subclause (I);
                                    (III) 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
                                    (IV) 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
                    (B) does not include a loan, open-end credit, or 
                any loan or income share agreement that is secured by 
                real property or a dwelling.
            (14) Education loan.--The term ``education loan'' means--
                    (A) 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
                    (B) 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)).
            (15) Income.--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.
            (16) Income share agreement.--
                    (A) In general.--The term ``income share 
                agreement'' means a financial product whereby--
                            (i)(I) the ISA provider credits or advances 
                        financing to the ISA recipient or to a third 
                        party on behalf of the ISA recipient; or
                            (II) 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;
                            (ii) 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;
                            (iii) 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;
                            (iv) 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);
                            (v) 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
                            (vi) the agreement states that it is an 
                        income share agreement and subject to this Act.
                    (B) Special rule.--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.
            (17) Income threshold.--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.
            (18) Institution of higher education.--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).
            (19) ISA duration.--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).
            (20) ISA financing.--The term ``ISA financing'' means the 
        disbursement of funds by an ISA provider under an income share 
        agreement.
            (21) ISA maximum number of payments.--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.
            (22) ISA payment.--The term ``ISA payment''--
                    (A) 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
                    (B) is calculated using the ISA payment calculation 
                method, based on the ISA recipient's income for the 
                specified period.
            (23) ISA payment calculation method.--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.
            (24) ISA payment window.--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.
            (25) ISA percentage.--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.
            (26) ISA provider.--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.
            (27) ISA recipient.--The term ``ISA recipient'' means a 
        consumer that receives financing from an ISA provider pursuant 
        to an income share agreement.
            (28) Loan.--The term ``loan'' means a financial product 
        that--
                    (A) is credit, as defined in section 1026.2(a) of 
                title 12, Code of Federal Regulations;
                    (B) is not an income share agreement; and
                    (C) 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.
            (29) Loan comparison.--The term ``loan comparison'' means 
        the comparison table required under section 302(d)(9).
            (30) Payment relief pause.--The term ``payment relief 
        pause'' means a period of time that--
                    (A) is requested by the ISA recipient during which 
                any payment obligation the ISA recipient would have is 
                suspended; and
                    (B) does not count toward an ISA recipient's ISA 
                payment window or ISA maximum number of payments.
            (31) Person.--The term ``person'' means a natural person or 
        an organization, including a corporation, partnership, 
        proprietorship, association, cooperative, estate, trust, or 
        government unit.
            (32) Poverty line.--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).
            (33) Secretary.--The term ``Secretary'' means the Secretary 
        of Education.
            (34) State.--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.
            (35) State law.--The term ``State law'' means--
                    (A) 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
                    (B) any law of the United States applicable only to 
                the District of Columbia.

SEC. 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.

 TITLE I--NEW CONSUMER PROTECTIONS SPECIFIC TO INCOME SHARE AGREEMENTS

SEC. 101. PROHIBITION ON ACCELERATION; TREATMENT OF EARLY COMPLETION 
              MECHANISMS.

    (a) No Acceleration.--
            (1) In general.--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.
            (2) Effect of acceleration clause.--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.
    (b) No Impact on Early Completion Mechanisms.--Notwithstanding 
subsection (a)--
            (1) 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
            (2) 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.

SEC. 102. CONSUMER PROTECTIONS FOR EDUCATIONAL INCOME SHARE AGREEMENTS.

    (a) Monthly Payment Affordability for Educational ISAs.--
            (1) Maximum isa income obligation for educational isas.--An 
        ISA provider shall not enter into an educational ISA with an 
        ISA recipient if the ISA recipient would be committing more 
        than a total of 20 percent of the student's future income 
        toward the payment of such educational ISA and all other 
        educational ISAs of the ISA recipient.
            (2) Self-certification.--In calculating the portion of a 
        student's future income for purposes of this subsection, the 
        ISA provider may rely on a self-certification from the ISA 
        recipient regarding the ISA recipient's outstanding educational 
        ISAs, as of the date of the agreement.
            (3) Calculation methodology and requirements.--
                    (A) In general.--For the purposes of calculating 
                the portion of an ISA recipient's future income that 
                would be consumed by the educational ISA for which the 
                ISA recipient has applied and all other educational 
                ISAs of the ISA recipient as of the date of the 
                agreement, the ISA provider shall calculate the 
                aggregate future burden--
                            (i) in any case where the income threshold 
                        of the educational ISA is less than the maximum 
                        described in subparagraph (B), at hypothetical 
                        future income levels from such income threshold 
                        to the such maximum, in increments of $10,000; 
                        and
                            (ii) in any case where the income threshold 
                        of the educational ISA is equal to or greater 
                        than such maximum, at such income threshold.
                    (B) Maximum.--The maximum described in this 
                subparagraph shall be the greater of--
                            (i)(I) for fiscal year 2023, $70,000; or
                            (ii) for fiscal year 2024 and each 
                        subsequent fiscal year, the maximum for the 
                        preceding fiscal year--
                                    (I) increased by the percentage 
                                increase in the consumer price index; 
                                and
                                    (II) rounded to the nearest $1,000; 
                                and
                            (iii) in the case of an ISA recipient who 
                        has (as of the date of the agreement), or has 
                        applied for, an educational ISA that uses a 
                        schedule of income percentages or a schedule of 
                        fixed amounts as the ISA payment calculation 
                        method, the highest income level referenced by 
                        a schedule for any such educational ISA.
                    (C) Calculation.--
                            (i) In general.--The terms of an 
                        educational ISA for which the ISA recipient has 
                        applied cannot cause the student's aggregate 
                        future burden (defined as the total amounts 
                        expected to be due under all educational ISAs 
                        of the ISA recipient as of the date of the 
                        agreement, and all educational ISAs for which 
                        the ISA recipient is applying) to exceed the 
                        limit in paragraph (1) at any of the income 
                        increments described in subparagraph (A).
                            (ii) Calculation method.--For the purpose 
                        of calculating the percentage burden of an 
                        educational ISA at a given future income level, 
                        the ISA provider shall, as applicable, use--
                                    (I) the income percentage that 
                                would be applicable for the educational 
                                ISA at such income level; or
                                    (II) the fixed amount applicable 
                                for the educational ISA at such income 
                                level, divided by such income level.
            (4) Protections during periods of low earnings.--
                    (A) In general.--The educational ISA shall provide 
                that when an ISA recipient has an income that is equal 
                to or below the income threshold of the educational 
                ISA, the ISA payment obligation is zero dollars.
                    (B) Threshold amount.--The income threshold for an 
                educational ISA shall be an amount such that the 
                difference between the ISA recipient's income for the 
                payment period, minus the subtraction of any ISA 
                obligation, is not less than 200 percent of the poverty 
                line for a single person (as defined in section 673 of 
                the Community Services Block Grant Act (42 U.S.C. 
                9902)), prorated for the payment period.
            (5) Required payment relief pauses.--An educational ISA 
        shall offer not less than 3 months of voluntary payment relief 
        pauses (as long as the ISA recipient's current income at the 
        time of requesting the payment relief pause is equal to or less 
        than 400 percent of the Federal poverty line (as defined in 
        section 673 of the Community Services Block Grant Act (42 
        U.S.C. 9902)) for a single individual) for every 30 income-
        determined payments required under the educational ISA.
    (b) Ensuring Appropriate Risk Sharing for Educational ISAs.--The 
payments required under an educational ISA for an individual with 
income during the payment term that is less than or equal to 300 
percent of the poverty line for a single individual, prorated for the 
payment period, shall not exceed the payments on a comparable loan that 
bears interest at a rate less than or equal to one-half of the annual 
percentage rate of interest limitation under section 987(b) of title 
10, United States Code.
    (c) Limits on Duration of Educational ISA Obligation.--
            (1) ISA maximum number of payments.--The ISA maximum number 
        of payments shall not exceed 240 monthly payments.
            (2) ISA duration.--The ISA duration of an educational ISA 
        shall not exceed 360 months (except in the case of an extension 
        requested by the ISA recipient).
    (d) Non-Interference.--An educational ISA shall not be construed to 
give the contract holder any rights over an individual's actions other 
than as provided in this Act.

SEC. 103. DISCHARGE PROTECTIONS FOR ISA RECIPIENTS.

    (a) Permanent and Total Disability.--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.
    (b) Death.--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.

SEC. 104. LIMITATION ON AMOUNTS TREATED AS INCOME UNDER EDUCATIONAL 
              ISAS.

    (a) In General.--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--
            (1) the income of any child or dependent of the ISA 
        recipient;
            (2) any item of income which is not included in the gross 
        income of the ISA recipient;
            (3) 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
            (4) any social security benefit (as defined in section 86 
        of such Code).
    (b) Estimating Income.--
            (1) In general.--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:
                    (A) 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)).
                    (B) 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.
                    (C) Contacting the employer of the participant, or 
                any person or entity reasonably believed to the 
                employer of the participant, to obtain, verify, or 
                update the income information of the participant.
                    (D) Contacting the State revenue department or the 
                Internal Revenue Service to obtain the most recent 
                information available about the income of the 
                participant.
                    (E) 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--
                            (i) 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
                            (ii) 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.
            (2) Notification.--If an ISA provider assigns an income to 
        the income share agreement of a participant, the ISA provider--
                    (A) 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;
                    (B) 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 the prior paragraph 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;
                    (C) 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--
                            (i) update each prior instance in which 
                        assigned income was applied using such new 
                        income information; and
                            (ii) reconcile any difference in amounts 
                        owed by the participant based on those updates 
                        to prior income; and
                    (D) 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.
            (3) Records retention.--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.

           TITLE II--TAX TREATMENT OF INCOME SHARE AGREEMENTS

SEC. 201. TAX TREATMENT.

    (a) In General.--Subchapter B of chapter 1 of the Internal Revenue 
Code of 1986 is amended by adding at the end the following:

  ``PART XII--RULES RELATING TO QUALIFIED EDUCATIONAL INCOME SHARING 
                               AGREEMENTS

``Sec. 293. Rules related to qualified educational ISAs.

``SEC. 293. RULES RELATED TO QUALIFIED EDUCATIONAL ISAS.

    ``(a) In General.--For purposes of this title, an educational ISA 
shall not be treated as indebtedness.
    ``(b) Treatment of ISA Recipient.--
            ``(1) Income exclusion.--In the case of an individual--
                    ``(A) In general.--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 
                2022.
                    ``(B) Difference in payments.--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.
            ``(2) Certain amounts treated as interest on qualified 
        education loans.--
                    ``(A) In general.--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.
                    ``(B) Amount described.--The 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 assistance.--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.
    ``(c) Treatment of ISA Funder.--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--
            ``(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) Definitions.--For purposes of this section--
            ``(1) Educational isa.--The term `educational ISA' has the 
        meaning given such term under section 2 of the ISA Student 
        Protection Act of 2022.
            ``(2) Qualified educational isa.--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.).''.
    (b) Conforming Amendment.--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:

  ``PART XII--Rules Relating to Qualified Educational Income Sharing 
                             Agreements''.

      TITLE III--DISCLOSURES APPLICABLE TO INCOME SHARE AGREEMENTS

SEC. 301. DISCLOSURES.

    The following disclosures shall be provided to ISA recipients:
            (1) In general.--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.
            (2) Application.--The provisions of this title shall not 
        apply to--
                    (A) income share agreements primarily for business, 
                commercial, or agricultural purposes;
                    (B) government or governmental agencies or 
                instrumentalities;
                    (C) organizations; or
                    (D) 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.
            (3) Regulations.--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.
            (4) Model disclosure forms and clauses.--
                    (A) In general.--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.
                    (B) Consideration.--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.
                    (C) Rule of construction.--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.
                    (D) Compliance.--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--
                            (i) uses any appropriate model form or 
                        clause as published by the Bureau under this 
                        section; or
                            (ii) uses any such model form or clause and 
                        changes the form or clause by--
                                    (I) deleting any information that 
                                is not required under this title; or
                                    (II) 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.
            (5) Procedures applicable for adoption of model forms and 
        clauses.--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.
            (6) Effective dates of regulations containing new 
        disclosure requirements.--
                    (A) In general.--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.
                    (B) Compliance.--Notwithstanding subparagraph (A), 
                any ISA provider may comply with any such newly 
                promulgated disclosure requirements prior to the 
                effective date of the requirements.
            (7) Deference.--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.

SEC. 302. REQUIRED DISCLOSURES FOR INCOME SHARE AGREEMENTS.

    (a) Disclosures Requirements for All ISAs.--
            (1) In general.--The ISA provider shall make the 
        disclosures required by this section clearly and conspicuously 
        in writing, in a form that the ISA recipient may retain.
            (2) Electronic form.--The disclosures required by this 
        section may be provided to the ISA recipient in electronic form 
        in accordance with the Electronic Signatures in Global and 
        National Commerce Act (15 U.S.C. 7001 et seq.).
            (3) Other requirements.--The disclosures required by this 
        section shall--
                    (A) be grouped together;
                    (B) be segregated from anything that is not such a 
                disclosure; and
                    (C) only contain information directly related to 
                the disclosures required under this section.
    (b) Use of Estimates.--If any information necessary for an accurate 
disclosure is unknown to the ISA provider, the ISA provider shall make 
the disclosure based on the best information reasonably available at 
the time the disclosure is provided to the ISA recipient, and shall 
state clearly that the disclosure is an estimate.
    (c) Multiple ISA Providers, Multiple ISA Recipients.--
            (1) Multiple isa providers.--In any case where an income 
        share agreement transaction involves more than one ISA 
        provider, only one set of disclosures shall be given and the 
        ISA providers shall agree among themselves which ISA provider 
        shall comply with the requirements that this title imposes on 
        any or all of the ISA providers.
            (2) Multiple isa recipients.--In any case where an income 
        share agreement transaction has more than one ISA recipient, 
        the disclosures may be made to any ISA recipient whose income 
        will be used to calculate the ISA payments due to the ISA 
        provider.
    (d) Content of Disclosures.--An ISA provider of an income share 
agreement (regardless of whether the income share agreement is an 
educational ISA) shall provide, to any person that applies for or signs 
a consumer income share agreement, a written document that clearly and 
simply discloses the following information:
            (1) A statement that the income share agreement is not a 
        fixed payment installment loan, and that the amount the ISA 
        recipient will be required to pay under the income share 
        agreement may be more or less than the amount financed by the 
        ISA provider and will vary in proportion to the ISA recipient's 
        future income. An ISA provider may satisfy the requirements of 
        this paragraph by providing a table that compares periodic 
        payments under the ISA at different income levels showing that 
        payments vary with income, or that also compares such periodic 
        payments under the ISA at different income levels with a loan 
        product.
            (2) In the case of an educational ISA, the following 
        statement: ``This income share agreement is not a grant or 
        scholarship. If your income is above the income Threshold, you 
        will have to make payments under this income share 
        agreement.''.
            (3) The following statement: ``Payments due under this 
        income share agreement are determined by your income. Your 
        payments are calculated using the ISA payment calculation 
        method described in your ISA. The amount you pay may be more 
        than, equal to, or less than the amount financed.''.
            (4) In a series of boxes or other device designed to 
        feature the following information more prominently than 
        elsewhere in the income share agreement disclosures, the 
        following information:
                    (A) The term ``Amount Financed'' and the dollar 
                amount of the amount funded, followed by a description 
                that states, ``The amount of funds you will receive or 
                that will be credited on your behalf.''.
                    (B) The term ``ISA Payment Calculation Method'' and 
                the following:
                            (i) In the case of an ISA payment 
                        calculation method that is a percentage (or 
                        schedule of percentages), such percentage (or 
                        schedule of percentages) followed by a 
                        description that states, ``The percentage of 
                        your income used to calculate your ISA 
                        Payment.'' and, if the ISA payment calculation 
                        method is a schedule of percentages, an 
                        explanation of where the ISA recipient can 
                        learn more about how the ISA recipient's income 
                        percentage is determined.
                            (ii) In the case of an ISA payment 
                        calculation method that is a schedule of fixed 
                        dollar amounts calculated based on the ISA 
                        recipient's income for a payment period, the 
                        schedule of fixed amounts (or a reference to 
                        the location of the schedule in the ISA) 
                        followed by a description that states, ``The 
                        amount of your ISA payment will vary based on 
                        your income. See your ISA for more 
                        information.''.
                    (C) The term ``Maximum Number of Income-Determined 
                Payments'' and the ISA maximum number of payments, 
                followed by a description that states, ``The maximum 
                number of ISA Payments you will make when your income 
                is above the income threshold.''.
                    (D) The term ``Maximum Duration'' and the ISA 
                duration, followed by a description that states, ``The 
                maximum amount of time that you are required to make 
                income-determined payments, excluding any extensions 
                that you request.''.
                    (E) The term ``Income Threshold'' and the income 
                threshold for the income share agreement, followed by a 
                description that states, ``The minimum income you must 
                make in order to trigger a payment obligation under 
                this income share agreement. If your income is less 
                than or equal to this income threshold, you will not 
                owe any ISA Payments for that period.''.
            (5) A statement that during periods in which the ISA 
        recipient's income is not above the income threshold--
                    (A) the ISA recipient will not owe an ISA payment 
                for that period of time; and
                    (B) any such period of non-payment will not count 
                towards the ISA maximum number of payments but will 
                count toward the ISA duration.
            (6) A statement that the obligations of the ISA recipient 
        under the income share agreement would be dischargeable in a 
        case under title 11, United States Code, in the same manner as 
        a loan that is not described in section 523(a)(8) of title 11, 
        United States Code.
            (7) A description of the terms under which the obligations 
        of the ISA recipient under the income share agreement shall be 
        extinguished in advance of the full ISA duration.
            (8) The definition of income to be used for purposes of 
        calculating the ISA recipient's obligation under the income 
        share agreement, subject to section 104(a).
            (9) A comparison table that includes the following:
                    (A)(i) The amounts and number of ISA payments that 
                an ISA recipient would be required to pay under the 
                income share agreement at a range of annual income 
                levels stated as both a monthly and annual income 
                amount.
                    (ii) The income levels used in the disclosure under 
                this paragraph shall include, at a minimum, the 
                obligations for the ISA recipient--
                            (I) with no income;
                            (II) with income at the income threshold; 
                        and
                            (III) for various income scenarios, 
                        including, at a minimum, calculations at annual 
                        incomes of $40,000, $60,000, $80,000, $100,000, 
                        $125,000, $150,000, $175,000, and $200,000.
                    (iii) The comparison table under this paragraph 
                shall include the following statement: ``This table 
                assumes you have the same Income over the entire term 
                of your income share agreement. It does not take into 
                account changes in Income. Your Income will likely 
                change over time.''.
                    (B) The total of all ISA payments over the life of 
                the income share agreement that the ISA recipient will 
                have made in each of the income level scenarios 
                described in subparagraph (A).
                    (C) The amounts and number of payments, the total 
                of all payments, and the annual percentage rate 
                required to be paid under one or more comparable loans, 
                including, at a minimum--
                            (i) if elected by the Bureau, a loan at a 
                        fixed or variable rate and with a number of 
                        payments determined by the Bureau to be an 
                        approximation of the fixed or variable interest 
                        rate available to ISA recipients in the private 
                        marketplace;
                            (ii) for an educational ISA, a comparable 
                        loan made under part D of title IV of the 
                        Higher Education Act of 1965 (20 U.S.C. 1087a 
                        et seq.) (including subsidized and unsubsidized 
                        scenarios), if the individual would be eligible 
                        for such a loan; and
                            (iii) for an income share agreement that is 
                        not an educational ISA, a loan or loans that 
                        the ISA provider believes, in good faith, 
                        represents other alternative loan options 
                        available for the ISA recipient.
            (10) A statement of the intent of the ISA provider to 
        engage in an annual process of reconciliation to determine if 
        the ISA recipient's ISA payments for the preceding year are 
        more than, equal to, or less than the ISA payments owed under 
        the income share agreement, including--
                    (A) a description of the process in which the ISA 
                recipient must participate in order for the ISA 
                provider to verify the ISA recipient's income; and
                    (B) a description of any tax records or forms that 
                the ISA recipient must execute or that the ISA provider 
                intends to submit to the Internal Revenue Service.
            (11) A disclosure of the following items, to the extent 
        applicable:
                    (A) The amount that is or will be paid directly to 
                the ISA recipient.
                    (B) The amount that is or will be credited to the 
                ISA recipient's account to discharge obligations owed 
                to the ISA provider.
                    (C) Each amount that is or will be paid to third 
                persons by the ISA provider on the ISA recipient's 
                behalf, together with an identification of or reference 
                to the third person.
                    (D) The total amount of any charges that will be 
                paid by the ISA recipient before or at the time of the 
                consummation of the transaction, or have been withheld 
                from the proceeds of the income share agreement.
            (12) The name and mailing address of the ISA provider.
            (13) A payment schedule that--
                    (A) shows the date upon which the first ISA payment 
                is expected to be due or, if such date is not 
                reasonably knowable--
                            (i) an estimated date using the best 
                        information available to the ISA provider; or
                            (ii) a statement of the events that will 
                        trigger the first payment; and
                    (B) reflects each date thereafter during the ISA 
                duration that an ISA payment may be due.
    (e) Additional Disclosure Elements.--The Director may, through a 
rulemaking process--
            (1) add additional items to be disclosed under subsection 
        (d) if consumer testing shows those elements would help 
        consumers better understand the nature of the ISA obligation or 
        better compare it with other products; and
            (2) require that additional income scenarios be included in 
        the comparison table under paragraph (9)(A)(ii)(III), taking 
        into account the income levels the ISA recipient might 
        reasonably be expected to make given the intended use of the 
        funds provided under the income share agreement, except in no 
        case shall the number of scenarios exceed 20.

SEC. 303. ADDITIONAL REQUIREMENTS FOR EDUCATIONAL ISAS.

    (a) Additional Disclosure Timing Rules for Educational ISAs.--The 
following additional provisions apply to any income share agreement 
that is an educational ISA:
            (1) Application and solicitation.--
                    (A) In general.--The ISA provider of an educational 
                ISA that is to be used solely for postsecondary 
                educational expenses shall provide the disclosures 
                described in subsection (b)(1) with any application or 
                solicitation for the educational ISA. For purposes of 
                this section, the term ``solicitation'' means an offer 
                of an income share agreement that does not require the 
                potential ISA recipient to complete an application.
                    (B) Telephone applications or solicitations.--In 
                the case of a telephone application or solicitation for 
                an educational ISA, the ISA provider shall provide the 
                disclosure by, at its option--
                            (i) disclosing orally the information 
                        described in subsection (b)(1); or
                            (ii) mailing a copy of the disclosure 
                        described in subsection (b)(1) not later than 3 
                        business days after the potential ISA recipient 
                        has applied for the educational ISA.
                    (C) Special rule.--For an income share agreement 
                that the ISA recipient may use for multiple purposes 
                including postsecondary educational expenses, the ISA 
                provider need not provide the disclosures required 
                under subsection (b)(1) in the application or 
                solicitation.
            (2) Approval disclosures.--The ISA provider shall provide 
        the disclosures required by subsection (b)(2) before 
        consummation on, or with any notice of approval provided to the 
        applicant for, an educational ISA. If the ISA provider mails 
        notice of approval, the disclosures shall be mailed with the 
        notice. If the ISA provider communicates notice of approval by 
        telephone, the ISA provider shall mail the disclosures not 
        later than 3 business days after providing the notice of 
        approval. If the ISA provider communicates notice of approval 
        electronically, the ISA provider shall provide the disclosure, 
        at its option, either in electronic form in accordance with the 
        requirements of this title or by mailing the disclosure not 
        later than 3 business days after communicating the notice of 
        approval. If the ISA provider communicates approval in person, 
        the ISA provider shall provide the disclosures to the applicant 
        for an income share agreement at that time.
             (3) Final disclosures.--The disclosures required by 
        subsection (b)(3) shall be provided after the ISA recipient 
        accepts the income share agreement.
            (4) Receipt of mailed disclosures.--If a disclosure under 
        paragraph (1), (2), or (3) is mailed to the potential ISA 
        recipient or ISA recipient, as the case may be, the potential 
        ISA recipient or ISA recipient shall be deemed to have received 
        the disclosure 5 business days after the disclosure is mailed.
            (5) Basis of disclosures and use of estimates in 
        educational isas.--
                    (A) Legal obligation.--Disclosures shall reflect 
                the terms of the legal obligation between the parties.
                    (B) Estimates.--If any information necessary for an 
                accurate disclosure is unknown to the ISA provider, the 
                ISA provider shall make the disclosure based on the 
                best information reasonably available at the time the 
                disclosure is provided, and shall state clearly that 
                the disclosure is an estimate.
            (6) Effect of subsequent events.--
                    (A) Approval disclosures.--If a disclosure made 
                under paragraph (2) becomes inaccurate because of an 
                event that occurs after the ISA provider delivers the 
                required disclosures, the inaccuracy is not a violation 
                of this Act, although new disclosures may be required 
                in accordance with this title.
                    (B) Final disclosures.--If a disclosure under 
                paragraph (3) becomes inaccurate because of an event 
                that occurs after the creditor delivers the required 
                disclosures, the inaccuracy is not a violation of this 
                Act.
    (b) Additional Disclosures for Educational ISAs.--In addition to 
the other disclosure requirements of this title, an ISA provider of an 
educational ISA shall provide the disclosures required under this 
subsection as follows:
            (1) Application and solicitation disclosure.--On or with a 
        solicitation or an application for an educational ISA, an ISA 
        provider shall disclose the following:
                    (A) ISA payment calculation method.--
                            (i) The ISA payment calculation method that 
                        applies to the educational ISA and actually 
                        offered by the ISA provider at the time of 
                        application or solicitation. If the ISA payment 
                        calculation method will depend, in part, on a 
                        later determination of the ISA recipient's 
                        creditworthiness or other factors, a statement 
                        that the ISA payment calculation method for 
                        which the ISA recipient may qualify will depend 
                        on the ISA recipient's creditworthiness and 
                        other factors, if applicable.
                            (ii) In the case of an ISA payment 
                        calculation method that is based on a schedule 
                        of percentages--
                                    (I) an explanation of how the 
                                schedule of percentages is calculated 
                                using percentages of income based on 
                                the ISA recipient's income; and
                                    (II) the timing for recalculation 
                                of the ISA recipient's payments under 
                                the schedule of percentages.
                            (iii) In the case of an ISA payment 
                        calculation method that is based on a schedule 
                        of fixed amounts that an ISA recipient is 
                        required to pay that is calculated based on the 
                        ISA recipient's income for a payment period--
                                    (I) an explanation of how the 
                                schedule of fixed amounts is calculated 
                                using fixed amounts based on the ISA 
                                recipient's income; and
                                    (II) the timing for recalculation 
                                of the ISA recipient's payments under 
                                the schedule of fixed amounts.
                    (B) Fees and default or late payment costs.--
                            (i) An itemization of the fees or range of 
                        fees required to obtain the educational ISA.
                            (ii) Any fees or other penalties based on 
                        the ISA recipient's default or late payment.
                    (C) Payment terms.--
                            (i) The ISA duration, or range of ISA 
                        durations, offered by the ISA provider.
                            (ii) A description of any payment deferral 
                        options.
                    (D) Cost estimates.--Using the highest dollar 
                amount or percentage applicable under the ISA payment 
                calculation method described in subparagraph (A)(i) and 
                using an amount financed of $10,000, or $5,000 if the 
                ISA provider only offers income share agreements of 
                this type for less than $5,000, the loan comparison 
                based on these assumptions.
                    (E) Eligibility.--Any age or school enrollment 
                eligibility requirements relating to the ISA recipient.
                    (F) Alternative to income share agreements.--
                            (i) With respect to an educational ISA that 
                        might be used for postsecondary 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.)--
                                    (I) a statement the ISA recipient 
                                may qualify for Federal student 
                                financial assistance through a program 
                                under such title; and
                                    (II) the interest rates for each 
                                program of financial assistance 
                                available under title IV of the Higher 
                                Education Act of 1965 (20 U.S.C. 1070 
                                et seq.) and information regarding 
                                whether the rates for the loans 
                                available under such title are fixed or 
                                variable.
                            (ii) If applicable to the student's 
                        circumstances, a statement that the ISA 
                        recipient may obtain additional information 
                        concerning Federal student financial assistance 
                        from the institution of higher education that 
                        the student attends, or at the website of the 
                        Department of Education, including an 
                        appropriate website address for the Department.
                            (iii) A statement that an institution of 
                        higher education may have school-specific 
                        education loan benefits and terms not detailed 
                        on the disclosure form.
                    (G) Rights of the consumer.--A statement that if 
                the application for the educational ISA is approved by 
                the ISA provider, the terms of the educational ISA will 
                be available and will not change for 30 days except as 
                a result of adjustments to the ISA payment calculation 
                method, ISA duration, or ISA maximum number of payments 
                and other changes permitted by law.
                    (H) Self-certification information.--A statement 
                that, before the educational ISA may be consummated, 
                the ISA recipient must complete the self-certification 
                form and that the form may be obtained from the 
                institution of higher education that the student 
                attends.
                    (I) Overall educational finance obligation 
                notice.--The following statement: ``IMPORTANT NOTICE 
                REQUIRED BY LAW: Students are cautioned to consider 
                carefully entering into this Income Share Agreement if 
                their total future payment commitment, including any 
                other forms of education finance, may exceed 20 percent 
                of their expected future income. Your total future 
                obligation may exceed this percentage if you have 
                received additional education financing, including 
                other income share agreements, Department of Education 
                Direct or FFEL Loans, or private education loans.''.
            (2) Disclosures upon approval of an isa.--Upon approval of 
        an educational ISA by an ISA provider, the ISA provider shall 
        disclose the information required under section 302(d) and the 
        following information:
                    (A) ISA payment calculation method.--
                            (i) The ISA payment calculation method that 
                        applies to the educational ISA.
                            (ii) In the case of an ISA payment 
                        calculation method that is based on a schedule 
                        of percentages--
                                    (I) an explanation of how the 
                                schedule of percentages is calculated 
                                using percentages of income based on 
                                the ISA recipient's income; and
                                    (II) the timing for recalculation 
                                of the ISA recipient's payments under 
                                the schedule of percentages.
                            (iii) In the case of an ISA payment 
                        calculation method that is based on a schedule 
                        of fixed amounts that an ISA recipient is 
                        required to pay based on the ISA recipient's 
                        income for a payment period--
                                    (I) an explanation of how the 
                                schedule of fixed amounts is calculated 
                                using fixed amounts based on the ISA 
                                recipient's income; and
                                    (II) the timing for recalculation 
                                of the ISA recipient's payments under 
                                the schedule of fixed amounts.
                    (B) Fees and default or late payment costs.--
                            (i) An itemization of the fees or range of 
                        fees required to obtain the educational ISA.
                            (ii) Any fees or other penalties based on 
                        the ISA recipient's defaults or late payments.
                    (C) Payment terms.--
                            (i) The ISA duration, or range of ISA 
                        durations, offered by the ISA provider.
                            (ii) A description of any payment deferral 
                        options.
                    (D) Cost estimates.--The following disclosure shall 
                be made using the ISA payment calculation method, ISA 
                duration, and ISA maximum number of payments for which 
                the ISA recipient has been approved:
                            (i) The loan comparison based on these 
                        assumptions.
                            (ii) A description of the payment deferral 
                        option chosen by the ISA recipient, if 
                        applicable, and any other payment deferral 
                        options that the ISA recipient may elect at a 
                        later time.
                            (iii) Any payments required while the ISA 
                        recipient is enrolled at a covered educational 
                        institution, based on the deferral option 
                        chosen by the ISA recipient.
                    (E) Alternatives to private education income share 
                agreements, if applicable to the student.--In the case 
                of an educational ISA that may be used for education 
                expenses at an institution of higher education that 
                participates in the student financial assistance 
                programs under title IV of the Higher Education Act of 
                1965 (20 U.S.C. 1070 et seq.), the following:
                            (i) A statement that the ISA recipient may 
                        qualify for Federal student financial 
                        assistance through a program under title IV of 
                        the Higher Education Act of 1965 (20 U.S.C. 
                        1070 et seq.).
                            (ii) The interest rates for each program of 
                        financial assistance available under title IV 
                        of the Higher Education Act of 1965 (20 U.S.C. 
                        1070 et seq.) and information regarding whether 
                        the rates for the loans available under such 
                        title are fixed or variable.
                            (iii) A statement that the ISA recipient 
                        may obtain additional information concerning 
                        Federal student financial assistance from the 
                        institution of higher education that the 
                        student attends, or at the website of the 
                        Department of Education, including an 
                        appropriate website address for the Department.
                    (F) Rights of the isa recipient.--
                            (i) A statement that the ISA recipient may 
                        accept the terms of the income share agreement 
                        until the last day of the acceptance period 
                        described in subsection (d)(1).
                            (ii) The specific date on which the 
                        acceptance period expires, based on the date 
                        upon which the ISA recipient receives the 
                        disclosures required under this paragraph for 
                        the income share agreement.
                            (iii) A specification of the method or 
                        methods by which the ISA recipient may 
                        communicate acceptance.
                            (iv) A statement that, except for changes 
                        to the ISA payment calculation method and other 
                        changes permitted by law, the rates and terms 
                        of the income share agreement may not be 
                        changed by the ISA provider during the period 
                        described in clause (i).
                    (G) Overall educational finance obligation 
                notice.--The following statement: ``IMPORTANT NOTICE 
                REQUIRED BY LAW: Students are cautioned to consider 
                carefully entering into this Income Share Agreement if 
                their total future payment commitment, including any 
                other forms of education finance, may exceed 20 percent 
                of their expected future income. Your total future 
                obligation may exceed this percentage if you have 
                received additional education financing, including 
                other income share agreements, Department of Education 
                Direct or FFEL Loans, or private education loans.''.
            (3) Final disclosures.--After the ISA recipient has 
        accepted the income share agreement in accordance with 
        subsection (d)(1), the ISA provider shall disclose to the ISA 
        recipient the information required by this section and the 
        following information:
                    (A) ISA payment calculation method.--
                            (i) The ISA payment calculation method 
                        applicable to the income share agreement.
                            (ii) In the case of an ISA payment 
                        calculation method that is based on a schedule 
                        of percentages--
                                    (I) an explanation of how the 
                                schedule of percentages is calculated 
                                using percentages of income based on 
                                the ISA recipient's income; and
                                    (II) the timing for recalculation 
                                of the ISA recipient's payments under 
                                the schedule of percentages.
                            (iii) In the case of an ISA payment 
                        calculation method that is based on a schedule 
                        of fixed amounts that an ISA recipient is 
                        required to pay based on the ISA recipient's 
                        income for a payment period--
                                    (I) an explanation of how the 
                                schedule of fixed amounts is calculated 
                                using fixed amounts based on the ISA 
                                recipient's income; and
                                    (II) the timing for recalculation 
                                of the ISA recipient's payments under 
                                the schedule of fixed amounts.
                    (B) Fees and default or late payment costs.--
                            (i) An itemization of the fees or range of 
                        fees required to obtain the educational ISA.
                            (ii) Any fees or other penalties based on 
                        the ISA recipient's defaults or late payments.
                    (C) Payment terms.--
                            (i) The ISA duration or range of ISA 
                        durations offered by the ISA provider.
                            (ii) A description of any payment deferral 
                        options.
                    (D) Cost estimates.--The following disclosure shall 
                be made using the ISA payment calculation method, ISA 
                duration, and ISA maximum number of payments for which 
                the ISA recipient has been approved:
                            (i) The loan comparison based on these 
                        assumptions.
                            (ii) A description of the payment deferral 
                        option chosen by the ISA recipient, if 
                        applicable, and any other payment deferral 
                        options that the ISA recipient may elect at a 
                        later time.
                            (iii) Any payments required while the ISA 
                        recipient is enrolled at a covered educational 
                        institution, based on the deferral option 
                        chosen by the ISA recipient.
                    (E) Cancellation rights.--
                            (i) A statement that--
                                    (I) the ISA recipient has the right 
                                to cancel the income share agreement, 
                                without penalty, at any time before the 
                                cancellation period under subsection 
                                (e) expires; and
                                    (II) the income share agreement 
                                proceeds will not be disbursed until 
                                after such cancellation period expires.
                            (ii) The specific date on which the 
                        cancellation period expires and a statement 
                        that the ISA recipient may cancel by that date.
                            (iii) A statement specifying--
                                    (I) all methods by which the ISA 
                                recipient may cancel; and
                                    (II) if the ISA provider permits 
                                cancellation by mail, that the ISA 
                                recipient's mailed request will be 
                                deemed timely if placed in the mail not 
                                later than the cancellation date 
                                specified in clause (ii).
                    (F) Conspicuous disclosures.--The disclosures 
                required by subparagraph (E) shall be made more 
                conspicuous than any other disclosure required under 
                this section, except for the ISA payment calculation 
                method, ISA duration, ISA maximum number of payments, 
                amount financed, income threshold, and the ISA 
                provider's identity, which shall be disclosed in 
                accordance with the requirements of subsection (d).
                    (G) Overall educational finance obligation 
                notice.--The following statement: ``IMPORTANT NOTICE 
                REQUIRED BY LAW: Students are cautioned to consider 
                carefully entering into this Income Share Agreement if 
                their total future payment commitment, including any 
                other forms of education finance, may exceed 20 percent 
                of their expected future income. Your total future 
                obligation may exceed this percentage if you have 
                received additional education financing, including 
                other income share agreements, Department of Education 
                Direct or FFEL Loans, or private education loans.''.
    (c) Limitation on Educational ISAs.--
            (1) Co-branding prohibited.--
                    (A) In general.--Except as provided in subparagraph 
                (B) and paragraph (2), an ISA provider, other than the 
                covered educational institution itself, shall not use 
                the name, emblem, mascot, or logo of a covered 
                educational institution, or other words, pictures, or 
                symbols identified with a covered educational 
                institution, in the marketing of educational ISAs in a 
                way that implies that the covered education institution 
                endorses the ISA provider's income share agreements.
                    (B) Special rule.--An ISA provider's marketing of 
                an educational ISA does not imply that the covered 
                education institution endorses the ISA provider's 
                income share agreements if the marketing includes a 
                clear and conspicuous disclosure, equally prominent and 
                closely proximate to the reference to the covered 
                educational institution, that the covered educational 
                institution does not endorse the ISA provider's income 
                share agreements and that the ISA provider is not 
                affiliated with the covered educational institution.
            (2) Endorsed isa provider arrangements.--If an ISA provider 
        and a covered educational institution have entered into an 
        arrangement under which the covered educational institution 
        agrees to endorse the ISA provider's educational ISAs, and such 
        arrangement is not prohibited by other applicable law or 
        regulation, paragraph (1)(A) shall not apply as long as the 
        educational ISA marketing includes a clear and conspicuous 
        disclosure, equally prominent and closely proximate to the 
        reference to the covered educational institution, that the ISA 
        provider's income share agreements are not offered or made by 
        the covered educational institution, but are made by the ISA 
        provider.
    (d) Educational ISA Recipient's Right To Accept.--
            (1) Acceptance period.--The ISA recipient has the right to 
        accept the terms of an educational ISA at any time not later 
        than 30 calendar days following the date on which the ISA 
        recipient receives the disclosures required under subsection 
        (b)(2).
            (2) Limitations on changes.--Except for changes permitted 
        under paragraph (3), the terms of the educational ISA that are 
        required to be disclosed under paragraphs (2) and (3) of 
        subsection (b) may not be changed by the ISA provider prior to 
        the earlier of--
                    (A) the date of disbursement of the income share 
                agreement; or
                    (B) the expiration of the 30-day period described 
                in paragraph (1), if the ISA recipient has not accepted 
                the income share agreement before within the period.
            (3) Exceptions not requiring re-disclosure.--
                    (A) In general.--Notwithstanding paragraph (2), 
                nothing in this section shall prevent an ISA provider 
                of an educational ISA from--
                            (i) withdrawing an offer before 
                        consummation of the transaction if the making 
                        of the income share agreement would be 
                        prohibited by law or if the ISA provider has 
                        reason to believe that the ISA recipient has 
                        committed fraud in connection with the income 
                        share agreement application;
                            (ii) changing the ISA payment calculation 
                        method and terms if the change will 
                        unequivocally benefit the ISA recipient; or
                            (iii) reducing the amount funded based upon 
                        a certification or other information received 
                        from the covered educational institution, or 
                        from the ISA recipient, indicating that the 
                        student's cost of attendance has decreased or 
                        the ISA recipient's other financial aid has 
                        increased, except that, in such case, the ISA 
                        provider may make corresponding changes to the 
                        terms of the ISA payment calculation method, 
                        ISA duration, and other terms only to the 
                        extent that the ISA recipient would have 
                        received the terms if the ISA recipient had 
                        applied for the reduced amount financed.
                    (B) No new disclosures required.--If the ISA 
                provider changes the ISA payment calculation method or 
                terms of the income share agreement under this 
                paragraph, the ISA provider shall not be required to--
                            (i) provide the disclosures required under 
                        subsection (b)(2) for the new income share 
                        agreement terms; or
                            (ii) provide an additional 30-day period to 
                        the ISA recipient to accept the new terms of 
                        the income share agreement.
            (4) Exceptions requiring re-disclosure.--
                    (A) In general.--Notwithstanding paragraphs (2) and 
                (3), nothing in this section prevents an ISA provider, 
                at its option, from changing the ISA payment 
                calculation method or terms of the income share 
                agreement to accommodate a specific request by the ISA 
                recipient, such as a request for a different repayment 
                option.
                    (B) Additional disclosures required.--If the ISA 
                provider changes the rate or terms of the income share 
                agreement under subparagraph (A), the ISA provider--
                            (i) shall provide the disclosures required 
                        under subsection (b)(2) and shall provide the 
                        ISA recipient the 30-day period to accept the 
                        income share agreement, as required under 
                        paragraph (1); and
                            (ii) shall not make further changes to the 
                        income share agreement and terms of the loan, 
                        except as specified in paragraph (3)(B).
                    (C) No further withdrawals or changes.--Except as 
                permitted under paragraph (3)(B), unless the ISA 
                recipient accepts the income share agreement offered by 
                the ISA provider in response to the ISA recipient's 
                request in accordance with subparagraph (A), the ISA 
                provider may not withdraw or change the ISA payment 
                calculation method or any terms of the income share 
                agreements for which the ISA recipient was approved 
                prior to the ISA recipient's request for a change in 
                income share agreement terms under this paragraph.
    (e) Educational ISA Recipient's Right To Cancel.--The ISA recipient 
may cancel an educational ISA, without penalty, until midnight of the 
third business day following the date on which the ISA recipient 
receives the disclosures required by subsection (b)(3). No funds may be 
disbursed for an educational ISA until the 3-business-day period has 
expired, absent exceptional circumstances necessitating disbursement 
based on a request from the covered educational institution. In such a 
case, the covered educational institution shall promptly, upon 
cancellation by the student, refund the amounts to the ISA provider.
    (f) Self-Certification Form.--For an educational ISA intended to be 
used for the postsecondary educational expenses of a student while the 
student is attending an institution of higher education, the ISA 
provider shall obtain, from the ISA recipient or the institution of 
higher education, the educational ISA certification form developed by 
the Secretary under section 155 of the Higher Education Act of 1965 (20 
U.S.C. 1019d), signed by the ISA recipient, in written or electronic 
form, before consummating the educational ISA.
    (g) Provision of Information by Preferred ISA Provider.--
            (1) In general.--An ISA provider that has a preferred ISA 
        financing arrangement with a covered educational institution 
        shall, each year in accordance with paragraph (2), provide to 
        the covered educational institution the information required 
        under subsection (b)(1) for each type of educational ISA that 
        the ISA provider plans to offer to ISA recipients for students 
        attending the covered educational institution, for the period 
        beginning July 1 of the year in which the information is 
        provided and ending June 30 of the following year.
            (2) Timing.--For each year of a preferred ISA provider 
        financing arrangement, the ISA provider shall provide the 
        information required under paragraph (1) by the later of--
                    (A) the first day of April; or
                    (B) the date that is 30 days after entering into, 
                or learning the ISA provider is a party to, a preferred 
                ISA provider arrangement.

SEC. 304. ADVERTISING OF INCOME SHARE AGREEMENTS.

    (a) In General.--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.).
    (b) Amendments to the Truth in Lending Act.--The Truth in Lending 
Act (15 U.S.C. 1601 et seq.) is amended--
            (1) in section 103(f) (15 U.S.C. 1602(f))--
                    (A) by striking ``means the'' and inserting 
                ``means--
            ``(1) the'';
                    (B) in paragraph (1), as so designated, by striking 
                the period at the end and inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(2) for purposes of chapter 3, shall include an income 
        share agreement, as defined in section 2 of the ISA Student 
        Protection Act of 2022.'';
            (2) in section 142 (15 U.S.C. 1662)--
                    (A) in the matter preceding paragraph (1), by 
                striking ``state'' and inserting ``state--'';
                    (B) in paragraph (1), by striking the period at the 
                end and inserting a semicolon;
                    (C) in paragraph (2), by striking the period at the 
                end and inserting ``; and''; and
                    (D) by adding at the end the following:
            ``(3) with respect to an income share agreement (as defined 
        in section 2 of the ISA Student Protection Act of 2022), 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
            (3) in section 144, by adding at the end the following:
    ``(f) Income Share Agreements.--
            ``(1) Definitions.--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 2022.
            ``(2) Application.--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.
            ``(3) Disclosure of key terms.--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:
                    ``(A) The ISA payment calculation method.
                    ``(B) The ISA duration.
                    ``(C) The ISA maximum number of payments.
                    ``(D) The income threshold.''.

         TITLE IV--OTHER CLARIFICATIONS TO SUPPORT ISA PROGRAMS

SEC. 401. TREATMENT UNDER SECURITIES LAWS.

    (a) Income Share Agreements Not Treated as Securities.--
            (1) In general.--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.
            (2) Rule of construction.--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.
    (b) ISA Providers Making Income Share Agreements Excluded From 
Investment Company Treatment.--Section 3(c) of the Investment Company 
Act of 1940 (15 U.S.C. 80a-3(c)) is amended--
            (1) in paragraph (4), by inserting ``income share 
        agreements (as that term is defined in section 2 of the ISA 
        Student Protection Act of 2022),'' after ``industrial 
        banking,''; and
            (2) in paragraph (5)--
                    (A) 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 2022)'' after 
                ``services''; and
                    (B) in subparagraph (B), by inserting ``, including 
                making income share agreements (as defined in 
                subparagraph (A))'' after ``services''.

SEC. 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 
2022)--''.

SEC. 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.

SEC. 404. INTERPLAY WITH THE HIGHER EDUCATION ACT OF 1965.

    (a) Title IV Definitions.--
            (1) In general.--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--
                    (A) in subsection (e)--
                            (i) in paragraph (2), by striking ``and'' 
                        after the semicolon;
                            (ii) in paragraph (3), by striking the 
                        period and inserting ``; and''; and
                            (iii) by adding at the end the following:
            ``(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 
        2022.''; and
                    (B) 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 2022,'' after ``income producing property,''.
            (2) Effective date.--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.
    (b) Program Participation Agreements.--Section 487(d)(1)(D) of the 
Higher Education Act of 1965 (20 U.S.C. 1094(d)(1)(D)) is amended--
            (1) in clause (ii), by striking ``and'' after the 
        semicolon;
            (2) in clause (iii), by inserting ``and'' after the 
        semicolon; and
            (3) by adding at the end the following:
                            ``(iv) in the case of educational income 
                        share agreements (as such term is defined in 
                        section 2 of the ISA Student Protection Act of 
                        2022) 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;''.
    (c) Preferred Lender Arrangement Definitions.--Section 151 of the 
Higher Education Act of 1965 (20 U.S.C. 1019) is amended--
            (1) by redesignating paragraphs (3), (4), (5), and (6) 
        through (9) as paragraphs (4), (5), (6), and (9) through (12), 
        respectively;
            (2) by inserting after paragraph (2) the following:
            ``(3) Educational isa.--The term `educational ISA' has the 
        meaning given the term in section 2 of the ISA Student 
        Protection Act of 2022.'';
            (3) in paragraph (6), as redesignated by paragraph (1)--
                    (A) in subparagraph (A)(ii), by inserting ``or 
                educational ISAs'' after ``loans'';
                    (B) in subparagraph (B), by striking ``and'' after 
                the semicolon;
                    (C) in subparagraph (C), by striking the period at 
                the end and inserting ``; and''; and
                    (D) by adding at the end of the following:
                    ``(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.'';
            (4) by inserting after paragraph (6), as redesignated by 
        subparagraph (A), the following:
            ``(7) ISA provider.--The term `ISA provider' has the 
        meaning given the term in section 2 of the ISA Student 
        Protection Act of 2022.
            ``(8) ISA recipient.--The term `ISA recipient' has the 
        meaning given the term in section 2 of the ISA Student 
        Protection Act of 2022.''; and
            (5) in paragraph (11)(A), as redesignated by paragraph 
        (1)--
                    (A) in the matter preceding clause (i), by 
                inserting ``or ISA provider'' after ``lender'';
                    (B) in clause (i), by inserting ``or an ISA 
                provider provides or otherwise issues educational 
                ISAs'' after ``loans''; and
                    (C) in clause (ii), by inserting ``or the 
                educational ISAs of the ISA provider'' after 
                ``lender''.
    (d) Responsibilities of Covered Institutions and ISA Providers 
Regarding Preferred Lender Arrangements.--Section 152 of the Higher 
Education Act of 1965 (20 U.S.C. 1019a) is amended--
            (1) in the section heading, by striking ``and lenders'' and 
        inserting ``lenders, and isa providers'';
            (2) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A)--
                                    (I) in clause (i)--
                                            (aa) in the matter 
                                        preceding subclause (I), by 
                                        inserting ``or educational 
                                        ISAs'' after ``loans'';
                                            (bb) in subclause (II)--

                                                    (AA) by striking 
                                                ``section 151(3)(A)'' 
                                                and inserting ``section 
                                                151(4)(A)''; and

                                                    (BB) by striking 
                                                ``and'' at the end;

                                            (cc) by redesignating 
                                        subclause (III) as subclause 
                                        (IV); and
                                            (dd) by inserting after 
                                        subclause (II) the following:
                                    ``(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
                                    (II) in clause (ii)--
                                            (aa) in the matter 
                                        preceding subclause (I)--

                                                    (AA) by striking 
                                                ``subparagraph (C)'' 
                                                and inserting 
                                                ``subparagraph (D)''; 
                                                and

                                                    (BB) by inserting 
                                                ``or educational ISAs'' 
                                                after ``loans'';

                                            (bb) in subclause (I), by 
                                        striking ``and'' after the 
                                        semicolon; and
                                            (cc) by adding at the end 
                                        the following:
                                    ``(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 2022, 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.'';
                            (ii) by redesignating subparagraph (C) as 
                        subparagraph (D); and
                            (iii) by inserting after subparagraph (B) 
                        the following:
                    ``(C) Educational isa disclosures.--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--
                            ``(i) provide the prospective ISA recipient 
                        with the information described in section 
                        303(b)(1) of the ISA Student Protection Act of 
                        2022 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.'';
                    (B) by striking paragraph (2) and inserting the 
                following:
            ``(2) Use of institution name.--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.''; and
                    (C) by adding at the end the following:
            ``(4) Use of isa provider name.--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.''; and
            (3) by adding at the end the following:
    ``(c) ISA Provider Responsibilities.--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 2022.''.
    (e) Disclosures for ISA Providers Participating in Preferred Lender 
Arrangements.--Section 153 of the Higher Education Act of 1965 (20 
U.S.C. 1019b) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A), by striking 
                        ``section 151(3)(A)'' and inserting ``section 
                        151(4)(A)''; and
                            (ii) by adding at the end the following:
                    ``(C) Additional information for educational 
                isas.--
                            ``(i) In general.--By not later than 180 
                        days after the date of enactment of the ISA 
                        Student Protection Act of 2022, 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 
                        disclosures.--In 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 2022; 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 
                                        window', and `ISA payment 
                                        calculation method' have the 
                                        meanings given the terms in 
                                        section 2 of the ISA Student 
                                        Protection Act of 2022.
                                            ``(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).'';
                    (B) in paragraph (2)--
                            (i) in subparagraph (A)--
                                    (I) 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
                                    (II) in clause (ii), by striking 
                                ``the model disclosure form'' and 
                                inserting ``a model disclosure form'';
                            (ii) in subparagraph (B)--
                                    (I) in the matter preceding clause 
                                (i)--
                                            (aa) by striking ``a model 
                                        disclosure form'' and inserting 
                                        ``model disclosure forms''; and
                                            (bb) by striking ``and 
                                        preferred lenders'' and 
                                        inserting ``preferred lenders, 
                                        and ISA providers'';
                                    (II) in clause (i), by inserting 
                                ``ISA providers,'' after 
                                ``servicers,''; and
                                    (III) in clause (ii)--
                                            (aa) by striking ``format 
                                        to the form'' and inserting the 
                                        following: ``format to--
                                            ``(aa) with respect to 
                                        education loans, the form'';
                                            (bb) by striking ``section 
                                        151(3)(A)'' and inserting 
                                        ``section 151(4)(A)''; and
                                            (cc) by adding at the end 
                                        the following:
                                            ``(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 2022 
                                        in order to permit students and 
                                        the families of students to 
                                        easily compare educational 
                                        ISAs; and''; and
                            (iii) in subparagraph (C), by striking 
                        ``such model disclosure form'' and inserting 
                        ``the model disclosure forms described in 
                        subparagraph (B)'';
            (2) in subsection (b), by striking ``section 151(3)(A)'' 
        each place the term appears and inserting ``section 
        151(4)(A)'';
            (3) by redesignating subsection (c) as subsection (d);
            (4) by inserting after subsection (b) the following:
    ``(c) Duties of ISA Providers.--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.''; and
            (5) in subsection (d), as redesignated by paragraph (3)--
                    (A) in paragraph (1)--
                            (i) in subparagraph (A)--
                                    (I) in clause (i), by striking 
                                ``section 151(3)(A)'' and inserting 
                                ``section 151(4)(A) or educational 
                                ISA''; and
                                    (II) by adding at the end the 
                                following:
                            ``(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 2022, 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
                            (ii) in subparagraph (B)--
                                    (I) by inserting ``or ISA 
                                provider'' after ``lender''; and
                                    (II) by inserting ``or an 
                                educational ISA'' after ``loan''; and
                    (B) in paragraph (2)(A)--
                            (i) in the matter preceding clause (i), by 
                        inserting ``or ISA provider'' after ``each 
                        lender'';
                            (ii) in clause (i), by striking ``clauses 
                        (i) and (ii)'' and inserting ``clauses (i) 
                        through (iii), as applicable''; and
                            (iii) in clause (ii)--
                                    (I) by inserting ``or ISA 
                                provider'' after ``the lender''; and
                                    (II) by inserting ``or educational 
                                ISA'' after ``loan''.
    (f) Self-Certification Form for Educational ISAs.--Section 155 of 
the Higher Education Act of 1965 (20 U.S.C. 1019d) is amended--
            (1) by striking the section heading and inserting the 
        following: ``self-certification forms for private education 
        loans or educational isas.'';
            (2) in subsection (a)--
                    (A) in the matter preceding paragraph (1)--
                            (i) by striking ``the self-certification 
                        form'' and inserting ``a self-certification 
                        form'';
                            (ii) 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 2022'' after 
                        ``Act''; and
                            (iii) by striking ``Such form'' and 
                        inserting ``Each form''; and
                    (B) in paragraph (3)--
                            (i) in subparagraph (A), by inserting ``or 
                        educational ISA, as applicable'' after 
                        ``loan''; and
                            (ii) in subparagraph (C), by inserting ``or 
                        educational ISA, as applicable'' after 
                        ``loan''; and
            (3) in subsection (b), by striking ``the form'' and 
        inserting ``a form''.
    (g) Conforming Amendments.--Section 154 of the Higher Education Act 
of 1965 (20 U.S.C. 1019c) is amended--
            (1) in subsection (a)--
                    (A) by inserting ``for education loans'' after 
                ``the model disclosure form''; and
                    (B) by striking ``section 151(3)(A)'' and inserting 
                ``section 151(4)(A)''; and
            (2) in subsection (b)(2), by inserting ``for education 
        loans'' after ``model disclosure form''.

    TITLE V--APPLYING EXISTING CONSUMER PROTECTIONS TO INCOME SHARE 
                               AGREEMENTS

SEC. 501. EQUAL ACCESS TO INCOME SHARE AGREEMENTS.

    (a) Activities Constituting Discrimination.--It shall be unlawful 
for any ISA provider to discriminate against any applicant, with 
respect to any aspect of an income share agreement--
            (1) on the basis of race, color, religion, national origin, 
        sex or marital status, or age (provided the applicant has the 
        capacity to contract);
            (2) 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
            (3) because the applicant has in good faith exercised any 
        right under this Act.
    (b) Activities Not Constituting Discrimination.--It shall not 
constitute discrimination for purpose of subsection (a) for an ISA 
provider--
            (1) 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;
            (2) 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;
            (3) 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
            (4) 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--
                    (A) may not consider an applicant's status as a 
                member or potential member of any of the classes 
                described in subsection (a);
                    (B) 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
                    (C) 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.
    (c) Additional Activities Not Constituting Discrimination.--It 
shall not be a violation of subsection (a) for an ISA provider to 
refuse to extend an income share agreement--
            (1) that is offered pursuant to--
                    (A) any financial assistance program expressly 
                authorized by law for an economically disadvantaged 
                class of persons;
                    (B) any financial assistance program administered 
                by a nonprofit organization for its members or an 
                economically disadvantaged class of persons; or
                    (C) any special purpose financial assistance 
                program that--
                            (i) is carried out by a for-profit 
                        organization to meet special social needs; and
                            (ii) meets standards prescribed in 
                        regulations by the Bureau; or
            (2) if the refusal is required by, or made pursuant to, a 
        program described in paragraph (1).
    (d) Reason for Adverse Action; Procedure Applicable.--
            (1) In general.--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--
                    (A) the action taken by the ISA provider with 
                respect to the application;
                    (B) 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
                    (C) the identity of the person or office from which 
                the statement of reasons described in paragraph (2) may 
                be obtained.
            (2) Statement of reasons.--
                    (A) In general.--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).
                    (B) Timing.--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.
                    (C) Oral statement.--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.
                    (D) Third-party request.--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.
                    (E) Verbal statements.--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.
    (e) Regulations.--
            (1) In general.--
                    (A) Issuance of regulations.--The Bureau shall 
                prescribe regulations to carry out the purposes of this 
                section.
                    (B) Contents.--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 this section.
            (2) Consistent with equal credit opportunity act.--In 
        prescribing regulations under paragraph (1), the Bureau shall 
        be guided by the Equal Credit Opportunity Act (12 U.S.C. 1691 
        et seq.) and part 1002 of title 12, Code of Federal 
        Regulations, or any successor regulations.
            (3) Exempt transactions.--
                    (A) In general.--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.
                    (B) Limitation.--An exemption granted under 
                subparagraph (A) shall be--
                            (i) for not longer than 5 years; and
                            (ii) extended only if the Bureau makes a 
                        subsequent determination, in the manner 
                        described by that subparagraph, that the 
                        exemption remains appropriate.
            (4) Maintenance of records.--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.
            (5) Deference.--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.
    (f) Enforcement.--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.
    (g) Self-Testing and Self-Correction.--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.
    (h) Applicability of Other Laws.--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.
    (i) Civil Liability.--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.
    (j) Reports by Bureau and Attorney General.--
            (1) In general.--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.
            (2) Additional information.--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).

SEC. 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 2022) with a 
consumer'' after ``a consumer''.

SEC. 503. TREATMENT UNDER THE FAIR CREDIT REPORTING ACT.

    (a) In General.--Section 605 of the Fair Credit Reporting Act (15 
U.S.C. 1681c) is amended by adding at the end the following:
    ``(i) Income Share Agreement Information.--With respect to an 
income share agreement (as that term is defined in section 2 of the ISA 
Student Protection Act of 2022), 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.''.
    (b) Regulations.--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.

SEC. 504. TREATMENT UNDER THE FAIR DEBT COLLECTION PRACTICES ACT.

    (a) In General.--Section 803 of the Fair Debt Collection Practices 
Act (15 U.S.C. 1692a) is amended--
            (1) 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 2022'' before the period at the end; 
        and
            (2) 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 2022),'' after ``means any 
        person''.
    (b) Rules of Construction.--Nothing in this section, or the 
amendments made by this section, may be construed for purposes of any 
other Federal law as considering--
            (1) income share agreements as debts, once the ISA 
        recipient owes any amounts to the ISA provider under the income 
        share agreement; or
            (2) ISA providers as lenders, once the ISA recipient owes 
        any amounts to the ISA provider under the applicable income 
        share agreement.

SEC. 505. TREATMENT OF EDUCATIONAL INCOME SHARE AGREEMENTS FOR PURPOSES 
              OF MILITARY LENDING ACT.

    Section 987 of title 10, United States Code, is amended--
            (1) by redesignating subsection (i) as subsection (j); and
            (2) by inserting after subsection (h) the following new 
        subsection:
    ``(i) Treatment of Educational Income Share Agreements.--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 2022), 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.''.

SEC. 506. TREATMENT UNDER THE SERVICEMEMBERS CIVIL RELIEF ACT.

    Section 207 of the Servicemembers Civil Relief Act (50 U.S.C. 3937) 
is amended--
            (1) in subsection (d)--
                    (A) by redesignating paragraphs (1) and (2) as 
                paragraphs (2) and (3), respectively; and
                    (B) by inserting before paragraph (2), as 
                redesignated by subparagraph (A), the following new 
                paragraph:
            ``(1) Educational income share agreement.--The term 
        `educational income share agreement' has the meaning given the 
        term `educational ISA' in section 2 of the ISA Student 
        Protection Act of 2022.'';
            (2) by redesignating subsections (d) and (e) as subsections 
        (e) and (f), respectively; and
            (3) by inserting before subsection (e), as redesignated by 
        paragraph (2), the following new subsection (d):
    ``(d) Educational Income Share Agreements.--
            ``(1) In general.--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 2022.
            ``(2) Interest rate.--In carrying out paragraph (1) of this 
        subsection, the interest rate referred to section 102(b) of 
        such Act shall be deemed to be the rate of interest specified 
        in subsection (a) of this section.''.

SEC. 507. PRESERVATION OF CONSUMERS' CLAIMS AND DEFENSES.

    (a) Application of Holder in Due Course Rule to Income Share 
Agreements.--Beginning on January 1, 2023, 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--
            (1) 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
            (2) are related, in whole or substantial part, to a 
        purchase of goods or services from a seller who--
                    (A) refers the consumer to the provider of the 
                income share agreement; or
                    (B) is affiliated with the provider of the income 
                share agreement by common control, contract, or 
                business arrangement.
    (b) Disclosures.--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)--
            (1) 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.''; and
            (2) 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.''.

                    TITLE VI--RELATION TO OTHER LAWS

SEC. 601. TREATMENT UNDER OTHER LAWS.

    (a) Insurance and Wagering.--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.
    (b) Payments Not Considered Prepayments.--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--
            (1) the prepayment complies with the limitations on income 
        share agreements required under this Act and the amendments 
        made by this Act; and
            (2) 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 15 U.S.C. 1650(e), to the extent it would be applicable 
to an income share agreement.
    (c) Treatment of Educational ISAs.--
            (1) Assignment of future wages for educational isas.--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.
            (2) Preemption of state law with respect to usury and 
        interest rates for educational isas.--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.
            (3) Preemption of state laws with respect to ability-to-
        repay and licensing laws for educational isas.--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.

SEC. 602. RELATION TO STATE LAW.

    (a) In General.--
            (1) Rule of construction.--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.
            (2) Greater protection under state law.--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.
    (b) Relation to Other Provisions of Enumerated Consumer Laws That 
Relate to State Law.--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.
    (c) Additional Consumer Protection Regulations in Response to State 
Action.--
            (1) Notice of proposed rule required.--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.
            (2) Bureau considerations required for issuance of final 
        regulation.--Before prescribing a final regulation based upon a 
        notice issued under paragraph (1), the Bureau shall take into 
        account whether--
                    (A) the proposed regulation would afford greater 
                protection to consumers than any existing regulation;
                    (B) 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
                    (C) a Federal banking agency has advised that the 
                proposed regulation is likely to present an 
                unacceptable safety and soundness risk to insured 
                depository institutions.
            (3) Explanation of considerations.--The Bureau--
                    (A) 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
                    (B) 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.
            (4) Reservation of authority.--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.
            (5) Rule of construction.--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.

                  TITLE VII--ENFORCEMENT AND REPORTING

SEC. 701. ENFORCEMENT.

    (a) Enforcing Agencies.--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--
            (1) section 8 of the Federal Deposit Insurance Act by the 
        appropriate Federal banking agency, as defined in section 3(q) 
        of the Federal Deposit Insurance Act (12 U.S.C. 1813(q)), with 
        respect to--
                    (A) national banks, Federal savings associations, 
                and Federal branches and Federal agencies of foreign 
                banks;
                    (B) 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
                    (C) 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;
            (2) 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;
            (3) 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;
            (4) 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;
            (5) 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;
            (6) 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
            (7) 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.
    (b) Violations of This Act Deemed Violations of Pre-Existing 
Statutory Requirements; Additional Agency Powers.--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.
    (c) Overall Enforcement Authority of the Bureau of Consumer 
Financial Protection.--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.).
    (d) Rules and Regulations.--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.

SEC. 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--
            (1) information on the prevalence and utilization of 
        educational ISAs and income share agreements; and
            (2) any other information pertaining to educational ISAs 
        and income share agreements that the Director determines is 
        appropriate.
                                 <all>