On November 20, 2023, the Consumer Financial Protection Bureau (CFPB) announced that, in conjunction with 11 states, it entered into a stipulated final judgment with a Delaware-based vocational education company that advertises itself as a “workplace accelerator” and its affiliates for alleged violations of the Consumer Financial Protection Act (CFPA), the Truth in Lending Act (TILA) and its implementing Regulation Z, and the Fair Debt Collection Practices Act (FDCPA).
The company allegedly falsely claimed that their income share loans were not loans, and that the loans would not be repaid until consumers had a job making at least $60,000 a year. The company also allegedly failed to disclose financing terms required by TILA and Regulation Z. Finally, the company allegedly deceptively induced consumers into settlement agreements and misrepresented the amounts that consumers owed.
Under the terms of the stipulated final judgment ordered by the court, the company will refund $4.2 million to student borrowers, cancel all outstanding income share loans, pay a $1 million civil penalty, and cease doing business.