Joshua Quoted in NASFAA on CFPB Action Against ISA Provider

CFPB Takes Action Against Income-Share Agreement Provider

Manatt Financial Services Special Counsel Jonathan Joshua was quoted by NASFAA (National Association of Student Financial Aid Administrators) on the Consumer Financial Protection Bureau’s (CFPB) recent action on an income-share agreement (ISA) provider and its potential implications for how an alternative way to finance one’s higher education is regulated going forward.

The publication reported that the CFPB’s consent order against the ISA provider comes after California regulators said it would apply more oversight to ISAs and treat them as private student loans under the state’s student loan servicing law. Joshua explained that the CFPB’s action is not the same as regulation though, and may not provide clarity to other ISA providers. “You’ve probably heard a lot of talk about regulation by enforcement,” he said. “But this is just enforcement without the regulation part. ISA providers still need further direction on what the CFPB wants, other than the generic compliance with what the CFPB views as applicable law.”

For institutions seeking to wade into the ISA space and partner with a provider to offer them to students, Joshua advised fully understanding the market they could potentially enter.

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