California Department of Financial Protection and Innovation (DFPI) Announces Progress Following Delays in Payouts to Former Students of Prehired LLC

Sacramento, CA – June 5, 2025 — The California Department of Financial Protection and Innovation (DFPI) today confirmed that the Consumer Financial Protection Bureau (CFPB) has resumed the distribution of $4.2 million in redress to former students of the now-defunct sales-training company Prehired LLC. This development comes after months of delays and coordinated pressure from California and attorneys general from twelve other states.

The $4.2 million restitution stems from a 2023 settlement related to Prehired’s bankruptcy case in Delaware federal court. Under the settlement, Prehired was required to cease operations and refund payments collected from students under income share agreements — contracts that financed online job training but contained controversial fine print that could require repayment regardless of job placement outcomes.

DFPI Commissioner KC Mohseni praised the CFPB’s renewed efforts, stating, “Following a long wait, hopefully this development brings closure to those impacted by their predatory practices.”

Last month, DFPI alongside attorneys general from Washington, New York, Illinois, Colorado, Delaware, Massachusetts, Minnesota, North Carolina, Ohio, Oregon, and South Carolina sent a formal letter expressing concern over the CFPB’s lack of response and delays in issuing consumer checks from the agency’s civil penalty fund. Although the CFPB finalized the distribution plan by May 2024, actual payments had not been sent nearly a year later.

The states noted that initial cooperation with the CFPB included updates and confirmation of eligible recipients, but substantive communication ceased in early February 2025 following leadership changes, when Russell Vought assumed the role of acting CFPB director.

The CFPB’s civil penalty fund, which pools fines collected by the agency, is intended to provide compensation to victims like the former Prehired students. With the resumption of payouts, the states and DFPI hope the matter will finally reach closure for those affected.

The CFPB has not issued an official statement regarding the latest status of the redress plan.