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ARTICLE · 25 APRIL 2024

CFPB Enters Into Consent Order With For-Profit Coding School

Goodwin Procter LLP
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​On April 17, 2024, the Consumer Finance Protection Bureau (CFPB) announced ​that it had entered into a consent order​ with BloomTech Inc., d/b/a Bloom Institute of Technology (BloomTech)...

United StatesFinance and Banking
Lauren Jackson
Lauren Jackson

On April 17, 2024, the Consumer Finance Protection Bureau (CFPB) announced that it had entered into a consent order with BloomTech Inc., d/b/a Bloom Institute of Technology (BloomTech), and BloomTech's CEO, Austen Allred, resolving allegations that the company's practices with respect to income-share agreements (ISAs) violated various consumer protection statutes. BloomTech, formerly known as Lambda, Inc., is a for-profit vocational school that offers short-term training programs for technological skills such as web development and backend engineering. BloomTech's advertising allegedly encouraged students with limited financial options to fund their attendance by entering into income-share agreements. Under these ISAs, students with salaries over $50,000 were required to pay off the $20,000 cost of BloomTech's tuition by paying BloomTech 17 percent of their pre-tax income each month until they either made 24 payments or hit a "cap" of $30,000 in total payments.

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