Published: September 2022

CFPB should use its authority to curb job training programs that leave employees indebted to employers

Consumer Action joined allies in urging the Consumer Financial Protection Bureau to use its existing authority to protect workers and working families from predatory loans in the form of Training Repayment Agreement Provisions (TRAPs)—employment contract provisions that require an employee to repay the cost (plus interest and fees) of on-the-job training (often of dubious quality or necessity) if they try to leave their job.

In June, the Consumer Financial Protection Bureau (CFPB) launched a federal inquiry into employers’ growing use of debt as a predatory tool to trap people in abusive jobs and poor working conditions. Specifically, Training Repayment Agreement Provisions (TRAPs)--employment contract provisions that allow an employer to demand repayment of the cost (plus interest and fees) of on-the-job training (often of dubious quality or necessity) if the employee tries to leave his or her job—are serving as a way of holding employees hostage in substandard jobs because they don’t earn enough to cover the cost of quitting. If they do quit, the debt they incur can hang over their heads for years. Consumer Action joined nearly two dozen allies in a letter to the CFPB supporting its inquiry into employer-driven debt and offering suggestions for how the agency can protect workers utilizing its existing authority.

Lead Organization

Student Borrower Protection Center

More Information

Click here to read the letter.

Learn more about the CFPB's inquiry.

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