Allegedly misleading borrowers about income share agreements (ISAs) has led a Virginia-based student lender to face action from the federal consumer financial protection agency – but no financial penalties, the agency said Tuesday.
According to the Consumer Financial Protection Bureau (CFPB), it filed the action against Better Future Forward, Inc., for misrepresenting its product and failing to comply with federal consumer financial law that governs private student loans.
The agency said it has ordered the firm to stop deceiving consumers about the nature of their products and provide consumers disclosures about their products as required by federal consumer financial law, among other things.
“Better Future Forward falsely represented that the ISAs are not loans, failed to provide disclosures required by federal law, and violated a prepayment penalty prohibition for private education loans,” the agency said in a release. It added that under a consent order issued by the bureau, Better Future Forward is required to provide disclosures that comply with federal consumer financial law, eliminate the prepayment penalties, and stop misleading borrowers.