Congress legalizes income-share agreements while gutting state consumer protections
H.R. 9469 — Outcomes-Based Financing (OBF) for Students Act · Filed by Erin Houchin (R-IN) · 1 cosponsor · Introduced Jun 25, 2026 · Referred to committee
Your members of Congress
Enter a ZIP to see where your representative and both senators stood on this bill.
Looked up on this device — your ZIP is never stored on our servers.
What it does
This bill creates a federal regulatory framework for 'outcomes-based financing' (OBF) products—financial instruments where students or trainees repay based on their future income rather than a fixed loan amount. The bill grants tax benefits to both borrowers (excluding discharged OBF obligations from taxable income, treating payments as education loan interest) and OBF providers (excluding portions of received payments from gross income). It mandates detailed disclosures, sets affordability caps (20% of projected income), establishes income thresholds below which no payment is owed, limits contract duration to 30 years, and preempts most state consumer protections while allowing states to impose their own OBF-specific rules. The bill also allows OBF providers to use income-based underwriting and access tax return information with consumer consent.
Why we flagged it
The bill's core function is to legalize and standardize income-share agreements (OBF products) by creating federal disclosure rules, consumer protections, and tax incentives. It is not primarily a consumer protection bill—the protections are secondary to enabling a new financial product category and shielding it from state regulation.
- Sections 101–104 grant tax exclusions to borrowers and providers unrelated to consumer protection; these are revenue-side giveaways embedded in a disclosure/regulation bill.
- Section 301(8) broadly preempts state usury, ability-to-repay, and wage-assignment laws, overriding state consumer protections not directly tied to OBF regulation.
What the text implies
- The bill allows OBF providers to access borrowers' tax return information indefinitely with a single 'continuing consent' signature, creating ongoing surveillance of income and potential for data misuse or breach.
- Federal preemption of state usury and ability-to-repay laws means OBF products can charge rates and impose obligations that would be illegal under state law, effectively creating a regulatory arbitrage zone for lenders.
The full analysis lists 5 implications of this text.
Who stands to gain
OBF providers (fintech lenders, alternative education financiers); Educational institutions offering OBF products; Income-share agreement platforms and servicers