Title: ISA Student Protection Act of 2019
Policy area: Finance and Financial Sector

Summary:
ISA Student Protection Act of 2019
This bill provides for income-share agreements whereby a student agrees to pay a percentage of future income, for a specified period of time, in exchange for funds to pay for educational expenses.
The bill places caps on the percentage of a student's future income that may go towards repayment, provides income minimums under which the required payment is zero, and establishes limitations on the length of these agreements.
The bill provides for the treatment of these agreements under various laws, including tax, securities, and consumer finance laws.


[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2114 Introduced in Senate (IS)]

<DOC>






116th CONGRESS
  1st Session
                                S. 2114

 To provide the legal framework and income tax treatment necessary for 
   the growth of innovative private financing options, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 15, 2019

     Mr. Young (for himself, Mr. Warner, Mr. Rubio, and Mr. Coons) 
introduced the following bill; which was read twice and referred to the 
                          Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To provide the legal framework and income tax treatment necessary for 
   the growth of innovative private financing options, and for other 
                               purposes.

    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 2019''.
    (b) Table of Contents.--The table of contents for this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Definitions.
               TITLE I--TAX TREATMENT OF A QUALIFIED ISA

Sec. 101. Tax treatment of proceeds and payments of future income.
Sec. 102. Terms and conditions of Qualified ISAs.
Sec. 103. Rulemaking; model disclosure forms.
Sec. 104. Truth in Lending Act.
Sec. 105. Consent to continuing release of taxpayer information under 
                            Qualified ISAs and income-share agreements.
         TITLE II--TREATMENT OF A QUALIFIED ISA UNDER STATE LAW

Sec. 201. Lawfulness of contracts; preemption of State law.
Sec. 202. Preemption of State law with respect to usury.
Sec. 203. Preemption of pre-existing State laws with respect to 
                            ability-to-repay and licensing laws.
 TITLE III--FEDERAL INDIVIDUAL ASSISTANCE TREATMENT OF A QUALIFIED ISA

Sec. 301. Proceeds not treated as income in calculation of financial 
                            need under the Higher Education Act of 
                            1965.
               TITLE IV--TREATMENT UNDER SECURITIES LAWS

Sec. 401. Qualified ISAs not treated as securities.
Sec. 402. Businesses making Qualified ISAs excluded from investment 
                            company treatment.
         TITLE V--TREATMENT UNDER FEDERAL CONSUMER FINANCE LAWS

Sec. 501. Qualified ISA anti-discrimination protections.
Sec. 502. Prohibition on requiring preauthorized electronic fund 
                            transfers.
Sec. 503. Treatment under the Fair Credit Reporting Act.
Sec. 504. Application of the Fair Debt Collection Practices Act.
Sec. 505. Application of the Military Lending Act.
Sec. 506. Application of the Servicemembers Civil Relief Act.
Sec. 507. Rulemaking.
                  TITLE VI--TREATMENT UNDER OTHER LAWS

Sec. 601. Insurance and wagering.
Sec. 602. Payments not considered prepayments.
 TITLE VII--REPORTING REQUIREMENT FOR THE BUREAU OF CONSUMER FINANCIAL 
                               PROTECTION

Sec. 701. Report.

SEC. 2. DEFINITIONS.

    For purposes of this Act:
            (1) Comparable loan.--The term ``comparable loan'' means, 
        with respect to a Qualified ISA, a loan that--
                    (A) has an original principal amount such that, 
                after any origination fees on the loan are paid, the 
                amount of loan financing received by the individual is 
                equal to the total amount of funding provided under the 
                Qualified ISA to or on behalf of the individual subject 
                to the Qualified ISA;
                    (B) has the same disbursement or funding date, 
                payment start date, and number of required monthly 
                payments; and
                    (C) is fully amortized over such term with monthly 
                payments of principal and interest.
            (2) Income-share agreement.--The term ``income-share 
        agreement'' means an agreement--
                    (A) between an individual and an ISA funder;
                    (B) under which--
                            (i) the ISA funder credits towards the 
                        tuition or other obligations of, or pays 
                        amounts to, or on behalf of, such individual 
                        for costs associated with a postsecondary 
                        training program, or any other program designed 
                        to increase the individual's human capital, 
                        employability, or earning potential (and not 
                        limited to programs eligible to participate as 
                        programs under title IV of the Higher Education 
                        Act of 1965 (20 U.S.C. 1070 et seq.)); and
                            (ii) such individual pays to such ISA 
                        funder (or the ISA funder's successor in 
                        interest) income-share payments for a defined 
                        term; and
                    (C) is not a loan.
            (3) Income-share funding.--The term ``income-share 
        funding'' means--
                    (A) 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 as programs under title IV of the Higher 
                Education Act of 1965 (20 U.S.C. 1070 et seq.)); and
                    (B) an allowance for books, supplies, 
                transportation, and miscellaneous personal expenses, 
                including a reasonable allowance for--
                            (i) the documented rental or purchase of a 
                        personal computer; or
                            (ii) the refinancing of debt used for the 
                        costs described in this subparagraph.
            (4) Income-share payment.--The term ``income-share 
        payment'' means an amount equal to a specified percentage of 
        the future income of an individual.
            (5) ISA funder.--With respect to a Qualified ISA, the term 
        ``ISA funder'' means the party to the Qualified ISA who--
                    (A) credits towards the tuition or other 
                obligations of, or pays amounts to, or on behalf of, an 
                individual solely for the purposes specified in 
                paragraph (3)(A)(i); and
                    (B) has the right to receive a specified percentage 
                of the individual's future income.
            (6) Qualified isa.--The term ``Qualified ISA'' means an 
        agreement between an individual and an ISA funder that--
                    (A) is not a loan, but is an income-share agreement 
                under which--
                            (i) the ISA funder credits towards the 
                        tuition or other obligations of, or pays 
                        amounts to, or on behalf of, such individual 
                        for income-share funding; and
                            (ii) such individual pays to such ISA 
                        funder (or the ISA funder's successor in 
                        interest); and
                    (B) meets the requirements of subsections (a) and 
                (b) of section 102.
            (7) 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 government of the Northern Mariana Islands, and the Trust 
        Territory of the Pacific Islands.
            (8) 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.

               TITLE I--TAX TREATMENT OF A QUALIFIED ISA

SEC. 101. TAX TREATMENT OF PROCEEDS AND PAYMENTS OF FUTURE INCOME.

    For purposes of the Internal Revenue Code of 1986:
            (1) Funding excluded from gross income.--In the case of an 
        individual, gross income shall not include the amount of any 
        income-share funding that is credited toward the tuition or 
        other obligations of, or paid to or on behalf of, such 
        individual under a Qualified ISA.
            (2) Difference in repayment not included as gross income.--
        In the case of a Qualified ISA under which the income-share 
        funding exceeds the total income-share payments (in any period 
        over the life of the contract), the individual's gross income 
        shall not include the amount of such excess.
            (3) Treatment of payments of future income.--The amount of 
        any income-share payments under a Qualified ISA shall be 
        treated--
                    (A) first, with respect to so much of such amount 
                as does not exceed the income-share funding under such 
                Qualified ISA, as a recovery of investment (with a 
                corresponding reduction in basis) in the contract; and
                    (B) second, as income on the contract which is 
                includible in gross income.

SEC. 102. TERMS AND CONDITIONS OF QUALIFIED ISAS.

    (a) Terms and Conditions.--Each Qualified ISA shall comply with the 
following:
            (1) Specified percentage of income.--
                    (A) In general.--The Qualified ISA specifies the 
                percentage of future income required to be paid.
                    (B) Maximum percentage.--The maximum percentage of 
                income an individual would be required to pay under the 
                Qualified ISA shall not exceed 20 percent, and the 
                product of such percentage and the number of monthly 
                payments required under the Qualified ISA divided by 12 
                shall not exceed 2.25 (which figure is the product of 
                7.5 percent and the number of years in the longest 
                allowable contract under paragraph (4)(A)).
            (2) Definition of income.--The Qualified ISA specifies the 
        definition of income to be used for purposes of calculating an 
        individual's obligation to pay under the Qualified ISA, which--
                    (A) shall not in any case include the income of the 
                individual's children;
                    (B) shall not include--
                            (i) any amount paid to the individual under 
                        title II or XVI of the Social Security Act (42 
                        U.S.C. 401 et seq., 1381 et seq.) or under a 
                        State program funded title IV under of such Act 
                        (42 U.S.C. 601 et seq.); or
                            (ii) any amount received by the individual 
                        under the Child Nutrition Act of 1966 (42 
                        U.S.C. 1771 et seq.);
                    (C) shall include revenue sources primarily 
                incurred from an individual's employment; and
                    (D) may include another revenue source besides 
                employment if an individual has voluntarily chosen to 
                not seek employment and is still receiving significant 
                revenue from another source.
            (3) Affordability for low after-school income.--
                    (A) In general.--The Qualified ISA provides that 
                when an individual subject to the Qualified ISA has an 
                income that is equal to or below the threshold amount 
                described in subparagraph (B), the percentage of income 
                obligation for the individual is zero.
                    (B) Threshold amount.--The threshold amount under 
                this subparagraph is an amount equal to (or at the 
                option of the ISA funder, greater than)--
                            (i) 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)); or
                            (ii) in the case of a Qualified ISA entered 
                        into before January 1, 2020, 150 percent of 
                        such poverty line for a single person.
                    (C) Allowance of fees or nominal payments.--
                Subparagraph (A) shall not be interpreted to preclude 
                the charging of fees or nominal payments (as described 
                in paragraph (8)) during this period.
            (4) Specified duration; extension of period.--
                    (A) Duration.--The Qualified ISA specifies the 
                maximum period of time during which the individual will 
                be obligated to make a specified number of monthly 
                payments of a percentage of the individual's future 
                income (excluding periods when just a nominal payment 
                (as described under paragraph (8)) is required), which 
                may not (except as provided in subparagraph (B)) exceed 
                360 months.
                    (B) Extension of period.--The Qualified ISA may 
                provide for the extension of such period by the number 
                of months during which the individual's percentage of 
                income obligation (excluding nominal payments and fees) 
                was zero.
            (5) Early termination.--The Qualified ISA specifies the 
        terms and conditions under which the individual subject to the 
        agreement may terminate the agreement.
            (6) Appropriate risk sharing.--The payments required under 
        the Qualified ISA for an individual with income during the 
        payment term that is less than or equal to 225 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)) shall 
        not exceed the payments on a comparable loan that bears 
        interest at a rate less than or equal to the annual percentage 
        rate of interest limitation under section 987(b) of title 10, 
        United States Code.
            (7) Aggregate limitation on obligation.--The Qualified ISA 
        provides that the total percentage of future income of the 
        individual that the individual agrees to pay, under the current 
        Qualified ISA and any other Qualified ISAs previously entered 
        into by the individual, shall not exceed 20 percent.
            (8) Nominal payments.--The Qualified ISA specifies any 
        nominal monthly payment that is required during periods when 
        the individual subject to the Qualified ISA has no percentage 
        of income obligation, except that--
                    (A) such nominal monthly payment shall not exceed 
                twenty-five dollars per month (adjusted each year to 
                reflect changes in the Consumer Price Index for All 
                Urban Consumers published by the Bureau of Labor 
                Statistics of the Department of Labor for the most 
                recent 12-month period for which the data are 
                available); and
                    (B) the total number of nominal payments that may 
                be required shall not exceed the maximum number of 
                allowable payments described in paragraph (4)(A).
            (9) Protections.--
                    (A) In general.--The Qualified ISA specifies, at a 
                minimum, individual rights with respect to each of the 
                following:
                            (i) Default or delinquency.
                            (ii) Overpayment or underpayment.
                            (iii) Disability.
                            (iv) Death.
                            (v) Service as a member of the armed 
                        services (including the National Guard and 
                        Reserves).
                    (B) Prior isas.--If a Qualified ISA executed prior 
                to the date of enactment of this Act does not meet the 
                requirements in subparagraph (A), the ISA funder shall 
                come into compliance with such subparagraph by issuing, 
                not later than 180 days after the date of enactment of 
                this Act, an addendum to the Qualified ISA that 
                contains the information described in such 
                subparagraph.
    (b) Required Disclosures.--
            (1) In general.--An ISA funder of a Qualified ISA shall 
        provide, to any individual intending to commit under a 
        Qualified ISA to pay future income and before the individual 
        enters into the agreement under the Qualified ISA, a written 
        document that clearly and simply discloses--
                    (A) that the Qualified ISA is not credit or a loan, 
                and that the amount the individual will be required to 
                pay under the Qualified ISA--
                            (i) may be more or less than the amount 
                        provided to the individual pursuant to the 
                        Qualified ISA; and
                            (ii) will vary in proportion to the 
                        individual's future income;
                    (B) that the obligations of the individual under 
                the Qualified ISA are dischargeable under bankruptcy 
                law;
                    (C) a description of the terms in which the 
                obligations of the individual under the Qualified ISA 
                shall be extinguished in advance of full duration of 
                the agreed-to term;
                    (D) the duration of the individual's obligations 
                under the Qualified ISA (absent such extinguishment), 
                including any circumstances under which the duration of 
                the Qualified ISA would be extended or extinguished;
                    (E) the percentage of income the individual is 
                committing to pay under the Qualified ISA, including 
                whether the percentage of income is fixed or variable 
                under the Qualified ISA, and the minimum amount of 
                annual income that triggers the individual's obligation 
                under the Qualified ISA to make payments for such year;
                    (F) the definition of income to be used for 
                purposes of calculating the individual's obligation 
                under the Qualified ISA;
                    (G)(i) a comparison of--
                            (I) the amounts and number of payments an 
                        individual would be required to pay under the 
                        Qualified ISA at a range of annual income 
                        levels, which income levels shall correspond to 
                        the levels the individual might reasonably be 
                        expected to make given the intended use of the 
                        funds provided under the Qualified ISA, as 
                        determined in accordance with guidance issued 
                        by the Director of the Bureau of Consumer 
                        Financial Protection; to
                            (II) the amounts and number of payments 
                        required to be paid under one or more 
                        comparable loans, including, at a minimum--
                                    (aa) a loan at a fixed or variable 
                                interest rate and with a number of 
                                payments determined by the Director of 
                                the Bureau of Consumer Financial 
                                Protection to be an approximation of 
                                the fixed or variable interest rate 
                                available to student loan borrowers in 
                                the private marketplace; and
                                    (bb) a comparable Federal Direct 
                                PLUS loan under part D of title IV of 
                                the Higher Education Act of 1965 (20 
                                U.S.C. 1087a et seq.), if the 
                                individual would be eligible for such a 
                                loan; and
                    (ii) a prominent notice accompanying the comparison 
                that clearly and conspicuously advises that loan 
                payments may be required regardless of the income of an 
                individual;
                    (H) income verification documentation, including 
                personal tax records submitted to the Internal Revenue 
                Service, that the individual may be required to provide 
                under the Qualified ISA;
                    (I) intent to conduct annual reconciliation 
                relating to obligations owed by the individual under 
                the Qualified ISA; and
                    (J) any nominal payments, as described in 
                subsection (a)(8), required under the Qualified ISA.
            (2) No other material terms.--The Qualified ISA disclosures 
        required by paragraph (1) shall be provided in a clear and 
        conspicuous manner, and shall not be disclosed together with 
        any other material terms or conditions that may be applicable 
        to the Qualified ISA.
    (c) Non-Interference.--A Qualified ISA represents an obligation by 
the individual to pay the specific percentage of future income, but 
shall not be construed to give the contract holder any rights over an 
individual's actions other than as provided in this Act.
    (d) Effect of Failure To Provide Documentation.--
            (1) In general.--Absent income documentation from an 
        individual under a Qualified ISA, the ISA funder of such 
        Qualified ISA (or the funder's successor in interest) may 
        assume a certain monthly income level for the individual, up to 
        the greater of--
                    (A) the level that would create an obligation that 
                is approximately equal to the amount required to return 
                the initial Qualified ISA amount to the ISA funder over 
                the remaining required payments; or
                    (B) the average monthly income for the individual 
                from the previous 6 months of employment.
            (2) Treatment under state law.--Any obligation resulting 
        from an assumed income level under paragraph (1) shall not be 
        considered to be imposing an unlawful fee under a State law 
        unless such State law expressly states that it is intended to 
        apply to Qualified ISAs.
            (3) Verification of income.--If an individual supplies an 
        ISA funder (or the funder's successor in interest) with the 
        individual's income verification information within 180 days of 
        the ISA funder (or the funder's successor in interest) assuming 
        an income level for such individual under paragraph (1), the 
        individual shall be entitled to have any payments that were 
        made in excess of the individual's actual obligation under the 
        contract either refunded to the individual or credited to 
        future obligations under the Qualified ISA.

SEC. 103. RULEMAKING; MODEL DISCLOSURE FORMS.

    (a) No Bureau General Rulemaking Authority.--Except as provided 
under subsection (b) and section 102(b)(1)(G), the Director of the 
Bureau of Consumer Financial Protection may not issue regulations under 
this title or pursuant to any other authority granted to the Bureau of 
Consumer Financial Protection under the Dodd-Frank Wall Street Reform 
and Consumer Protection Act (Public Law 111-203).
    (b) Model Disclosure Forms.--
            (1) In general.--Not later than 180 days after the date of 
        the enactment of this Act, the Director of the Bureau of 
        Consumer Financial Protection, after engaging in appropriate 
        consumer testing of such forms, shall promulgate a model 
        disclosure form for the disclosures required under section 
        102(b).
            (2) Safe harbor.--Any person who uses the model disclosure 
        form promulgated pursuant to paragraph (1) and includes 
        accurate information required under section 102(b) shall be 
        deemed to be in compliance with the disclosure requirements 
        under section 102(b) and shall not be subject to any State law 
        (including regulations) to the extent that such law imposes any 
        additional or differing disclosure requirements.

SEC. 104. TRUTH IN LENDING ACT.

    Any Qualified ISA shall not be considered credit and ISA funders 
(and their successors in interest) shall not be considered creditors, 
as those terms are defined in section 103 of the Truth in Lending Act 
(15 U.S.C. 1602).

SEC. 105. CONSENT TO CONTINUING RELEASE OF TAXPAYER INFORMATION UNDER 
              QUALIFIED 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 funder (or the funder's 
successor in interest) under a Qualified ISA or 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 Qualified ISA or income-share agreement.

         TITLE II--TREATMENT OF A QUALIFIED ISA UNDER STATE LAW

SEC. 201. LAWFULNESS OF CONTRACTS; PREEMPTION OF STATE LAW.

    (a) In General.--A Qualified ISA shall be a valid, binding, and 
enforceable contract notwithstanding any State law limiting or 
otherwise regulating assignments of future wages or other income.
    (b) Good Faith Reliance.--An ISA funder may rely in good faith on a 
statement from the individual obligated by a Qualified ISA with respect 
to such individual's aggregate obligation on the Qualified ISA.

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

    A Qualified ISA shall not be subject to State law with respect to 
usury, credit, loans, or credit or installment sales, unless such State 
law expressly states that it is intended to apply to Qualified ISAs.

SEC. 203. PREEMPTION OF PRE-EXISTING STATE LAWS WITH RESPECT TO 
              ABILITY-TO-REPAY AND LICENSING LAWS.

    A Qualified ISA shall not be subject to a State law with respect to 
``ability-to-repay'' requirements, and neither an ISA funder issuing a 
Qualified ISA, its successor in interest, nor any entity servicing any 
Qualified ISA on behalf of an ISA funder or its successor interest, 
shall be subject to any State law with respect to ISA licensing or 
registration, unless such State law was issued after the date of the 
enactment of this Act and such State law expressly states that it is 
intended to apply to Qualified ISAs.

 TITLE III--FEDERAL INDIVIDUAL ASSISTANCE TREATMENT OF A QUALIFIED ISA

SEC. 301. PROCEEDS NOT TREATED AS INCOME IN CALCULATION OF FINANCIAL 
              NEED UNDER THE HIGHER EDUCATION ACT OF 1965.

    No portion of any amounts received by an individual for entering 
into a Qualified ISA or an income-share agreement shall be included as 
income or assets in the computation of expected family contribution for 
any program funded in whole or in part under the Higher Education Act 
of 1965 (20 U.S.C. 1001 et seq.).

               TITLE IV--TREATMENT UNDER SECURITIES LAWS

SEC. 401. QUALIFIED ISAS NOT TREATED AS SECURITIES.

    A Qualified ISA and an income-share agreement shall not be treated 
as a security for purposes of the securities laws (as defined in 
section 3(a) of the Securities Exchange Act of 1934 (15 U.S.C. 
78c(a))), any similar State law, or any State law that directly or 
indirectly prohibits, limits, or imposes conditions, based on the 
merits of an offering or issuer of securities, upon the offer or sale 
of any security. Nothing in the preceding sentence may be construed to 
prevent an instrument that is collateralized by, or serviced by the 
cash flows of, a Qualified ISA from being treated as a security for 
purposes of any law described in that sentence.

SEC. 402. BUSINESSES MAKING QUALIFIED ISAS 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 ``Qualified ISAs or 
        income-share agreements (as those terms are defined in section 
        2 of the ISA Student Protection Act of 2019),'' after 
        ``industrial banking,''; and
            (2) in paragraph (5)--
                    (A) by inserting ``, including purchasing or 
                otherwise acquiring Qualified ISAs or income-share 
                agreements (as those terms are defined in section 2 of 
                the ISA Student Protection Act of 2019)'' after 
                ``services'' the first place it appears; and
                    (B) by inserting ``, including making Qualified 
                ISAs or income-share agreements (as so defined)'' after 
                ``services'' the second place it appears.

         TITLE V--TREATMENT UNDER FEDERAL CONSUMER FINANCE LAWS

SEC. 501. QUALIFIED ISA ANTI-DISCRIMINATION PROTECTIONS.

    The Equal Credit Opportunity Act (15 U.S.C. 1691 et seq.) is 
amended--
            (1) in section 701(b) (15 U.S.C. 1691(b))--
                    (A) in the matter preceding paragraph (1), by 
                inserting ``or an ISA funder or its successor in 
                interest'' after ``creditor'';
                    (B) in paragraph (4), by striking ``or'' at the 
                end;
                    (C) in paragraph (5), by striking the period at the 
                end and inserting ``; or''; and
                    (D) by adding at the end the following:
            ``(6) to set the terms of a Qualified ISA or an income-
        share agreement (as those terms are defined in section 2 of the 
        ISA Student Protection Act of 2019), based on the earnings 
        reasonably anticipated by the creditor with respect to any 
        program of study, certificate program, degree program, or 
        institutions of higher education where a Qualified ISA is 
        offered.''; and
            (2) in section 702 (15 U.S.C. 1691a)--
                    (A) in subsection (d), by inserting ``, or the 
                right granted under a Qualified ISA or an income-share 
                agreement (as those terms are defined in section 2 of 
                the ISA Student Protection Act of 2019)'' before the 
                period at the end; and
                    (B) in subsection (e)--
                            (i) by striking ``or any assignee'' and 
                        inserting ``any assignee''; and
                            (ii) by inserting ``or any person who 
                        regularly extends, renews, or continues funding 
                        under a qualified ISA or an income-share 
                        agreement (as those terms are defined in 
                        section 2 of the ISA Student Protection Act of 
                        2019)'' before the period at the end.

SEC. 502. PROHIBITION ON REQUIRING PREAUTHORIZED ELECTRONIC FUND 
              TRANSFERS.

    Section 913(1) of the Electronic Fund Transfer Act (15 U.S.C. 
1693k(1)) is amended by inserting ``or the entering into a Qualified 
ISA or an income-share agreement (as those terms are defined in section 
2 of the ISA Student Protection Act of 2019) 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) Qualified ISA Information.--With respect to a Qualified ISA 
or an income-share agreement (as those terms are defined in section 2 
of the ISA Student Protection Act of 2019), a consumer report made by a 
consumer reporting agency--
            ``(1) may include a description of the contract terms of 
        the Qualified ISA or income-share agreement, as applicable, 
        and, subject to subsection (a), information with respect to 
        amounts that are owed under the Qualified ISA; and
            ``(2) may not include any speculation about future amounts 
        that may be owed under the Qualified ISA or income-share 
        agreement, as applicable.''.
    (b) Regulations.--The Director of the Bureau of Consumer Financial 
Protection shall promulgate regulations with respect to the manner in 
which ISA funders may furnish, and consumer reporting agencies may 
report, information regarding Qualified ISAs and income-share 
agreements.

SEC. 504. APPLICATION OF 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 a 
        Qualified ISA and an income-share agreement, as those terms are 
        defined in section 2 of the ISA Student Protection Act of 
        2019'' before the period at the end; and
            (2) in paragraph (6), in the first sentence, by inserting 
        ``, including an ISA funder, as defined in section 2 of the ISA 
        Student Protection Act of 2019,'' after ``means any person''.
    (b) Rule 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) Qualified ISAs or income-share agreements as debts; or
            (2) ISA funders as debt collectors.

SEC. 505. APPLICATION OF THE 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 Qualified ISAs and Income-Share Agreements.--The 
Secretary of Defense shall issue regulations to apply this section to 
Qualified ISAs and income-share agreements (as those terms are defined 
in section 2 of the ISA Student Protection Act of 2019), and a 
Qualified ISA and an income-share agreement shall be deemed to meet the 
annual percentage rate of interest limitation under subsection (b) if 
the Qualified ISA or income-share agreement, as applicable, would meet 
the requirements of section 102(a)(6) of such Act (related to 
appropriate risk sharing) but with reference to the rate specified in 
subsection (b).''.

SEC. 506. APPLICATION OF THE SERVICEMEMBERS CIVIL RELIEF ACT.

    Section 207 of the Servicemembers Civil Relief Act (50 U.S.C. 3937) 
is amended by adding at the end the following:
    ``(f) Treatment of Qualified ISAs and Income-Share Agreements.--The 
Secretary of Defense shall issue regulations to apply this section to 
Qualified ISAs and income-share agreements (as those terms are defined 
in section 2 of the ISA Student Protection Act of 2019), specifically 
by stating that a Qualified ISA and an income-share agreement shall be 
considered to have met the requirements of this section if the 
Qualified ISA or income-share agreement, as applicable, would meet the 
requirements of section 102(a)(6) of such Act (relating to appropriate 
risk sharing) but with reference to the rate specified in subsection 
(a)(1).''.

SEC. 507. RULEMAKING.

    Not later than 180 days after the date of enactment of this Act--
            (1) the Director of the Bureau of Consumer Financial 
        Protection, in consultation with such other agency heads as the 
        Director considers appropriate, shall issue regulations to 
        carry out the amendments made by sections 501, 502, and 503; 
        and
            (2) the Secretary of Defense shall issue regulations to 
        carry out the amendments made by sections 505 and 506.

                  TITLE VI--TREATMENT UNDER OTHER LAWS

SEC. 601. INSURANCE AND WAGERING.

    A Qualified ISA and an income-share agreement shall not be treated 
as a contract for insurance or a betting or wagering contract under any 
Federal or State law.

SEC. 602. PAYMENTS NOT CONSIDERED PREPAYMENTS.

    With respect to a Qualified ISA or an income-share agreement, any 
requirement that an individual pay an amount greater than the income-
share funding in order to extinguish the Qualified ISA obligation or 
income-share agreement, as applicable, earlier than the end of the term 
shall not be subject to any Federal or State law with respect to 
prepayment penalties.

 TITLE VII--REPORTING REQUIREMENT FOR THE BUREAU OF CONSUMER FINANCIAL 
                               PROTECTION

SEC. 701. REPORT.

    Not less than frequently than once every 5 years, the Director of 
the Bureau of Consumer Financial Protection shall submit to Congress a 
report that includes--
            (1) information on the prevalence and utilization of 
        Qualified ISAs and income-share agreements; and
            (2) any other information pertaining to Qualified ISAs and 
        income-share agreements that the Director determines is 
        appropriate.
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