II 117th CONGRESS 2d Session S. 4551 IN THE SENATE OF THE UNITED STATES July 19, 2022 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 a consumer protection framework necessary to support the growth of accessible, affordable, and accountable financing options for postsecondary education, and for other purposes.

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. 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. 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. I New consumer protections specific to income share agreements 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. 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. 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. 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. II Tax treatment of income share agreements 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: XII Rules relating to qualified educational income sharing agreements Sec. 293. Rules related to qualified educational ISAs. 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 . III Disclosures applicable to income share agreements 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. 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. 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. 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. . IV Other clarifications to support ISA programs 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 . 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 )— . 403. Consent to continuing release of taxpayer information under educational ISAs and income share agreements By not later than 180 days after the date of enactment of this Act, the Secretary of the Treasury shall modify Treasury regulations and guidance to provide for continuing consent to disclosure of an individual’s return information to an ISA provider (or the provider's successor in interest) under an educational ISA or other income share agreement, but only for periods relevant to, and only to the extent the Secretary determines is necessary and appropriate in carrying out the terms of, such educational ISA or income share agreement. 404. Interplay with the Higher Education Act of 1965 (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 . V Applying existing consumer protections to income share agreements 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). 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 . 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. 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. 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. . 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. . 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. . VI Relation to other laws 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. 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. VII Enforcement and reporting 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. 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.