113 S2460 IS: Christopher Bryski Student Loan Protection Act
U.S. Senate
2014-06-10
text/xml
EN
Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.
1.
(a)
This Act may be cited
as the Christopher Bryski Student Loan
Protection Act
or Christopher’s Law
.
(b)
Congress
finds the following:
(1)
According to the Bureau of Consumer Financial Protection (hereafter referred to as the CFPB
) Student Loan Ombudsman:
(A)
The CFPB received more than 2,300 private student loan complaints and more than 1,300 debt
collection complaints related to student loans between October 1, 2013,
and March 31, 2014.
.
(B)
Co-signers complain that information about discharge or alternative arrangements in the case of
death of the primary borrower is not readily available and that decisions
are made on a case-by-case basis, giving co-signers little understanding
of how the process works, or if they will be successful.
.
(C)
The complaints and input received by the CFPB resemble many of the same issues experienced by
mortgage borrowers, such as improper application of payments, untimeliness
in error resolution, and inability to contact appropriate personnel in
times of hardship.
.
(D)
The
difference between federal and private student loans in periods of
disability
was not well-understood.
.
(2)
An estimated
1,700,000 people sustain a traumatic brain injury each year, with older
adolescents aged 15 to 19 years old more likely to sustain a traumatic
brain
injury than other age groups.
(3)
It has been estimated that the annual
incidence of spinal cord injury, not including those who die at the scene
of an
accident, is approximately 40 cases per 1,000,000 people in the United
States
or approximately 12,000 new cases each year. These injuries can lead to
permanent disability or loss of movement and can prohibit the victim from
engaging in any substantial gainful activity.
(4)
According to the CFPB, more than 90 percent of new private student loans are co-signed.
2.
Additional
student loan protections
(a)
Section 140 of the
Truth in Lending Act (15 U.S.C. 1650) is amended by adding at the end the
following:
(g)
Additional
protections relating to death or disability of borrower or cosigner
of a
private education loan
(1)
Clear and
conspicuous description of borrower’s and cosigner’s obligation
In the case of any private educational
lender who extends a private education loan, the lender shall
clearly and
conspicuously describe, in writing, the cosigner’s obligations with
respect to
the loan, including the effect the death, disability, or inability
to engage in
any substantial gainful activity of the borrower or any cosigner
would have on
any such obligation, in language that the Bureau determines would
give a
reasonable person a reasonable understanding of the obligation
being assumed by
becoming a cosigner for the loan.
(2)
Designation of
individual to act on behalf of the borrower
In the case of any private educational
lender who extends a private education loan, the lender shall
require the
borrower to designate an individual to have the legal authority to
act on
behalf of the borrower with respect to the private education loan
in the event
of the borrower’s death, disability, or inability to engage in any
substantial
gainful activity.
(3)
In the case of any private educational
lender who extends a private education loan, the lender shall
ensure that the
borrower, and any cosigner, receives comprehensive information on
the terms and
conditions of the loan and of the responsibilities the borrower has
with
respect to such loan, including the information described under
section
485(l)(2) of the Higher Education Act of 1965 (20 U.S.C.
1092(l)(2)).
(4)
The Bureau shall publish a model form under section 105 for
describing a cosigner’s obligation for purposes of paragraph (1).
(5)
Definition of
death, disability, or inability to engage in any substantial
gainful
activity
For the purposes of
this subsection with respect to a borrower or cosigner, the term death,
disability, or inability to engage in any substantial gainful
activity—
(A)
means any
condition described in section 437(a) of the Higher Education Act
of 1965 (20
U.S.C. 1087(a)); and
(B)
shall be interpreted by the Bureau in such
a manner as to conform with the regulations prescribed by the
Secretary of
Education under section 437(a) of such Act (20 U.S.C. 1087(a)) to
the fullest
extent practicable, including safeguards to prevent fraud and
abuse.
.
(b)
Subsection (a) of section 140 of the Truth
in Lending Act (15 U.S.C. 1650(a)) is amended—
(1)
by redesignating paragraphs (1) through (8)
as paragraphs (2) through (9), respectively; and
(2)
by inserting
before paragraph (2) (as redesignated by paragraph (1)) the following:
(1)
the term cosigner—
(A)
means any
individual who is liable for the obligation of another without
compensation,
regardless of how designated in the contract or instrument;
(B)
includes any
person whose signature is requested as condition to grant credit or
to forbear
on collection; and
(C)
does not include a
spouse of an individual referred to in subparagraph (A) whose
signature is
needed to perfect the security interest in the
loan;
.
(c)
Not
later than the end of the 1-year period following the date of the
enactment of
this Act, the Bureau of Consumer Financial Protection shall issue
regulations
to carry out section 140(g) of the Truth in Lending Act.
3.
(a)
Section 485(l)(2)
of the Higher Education Act of 1965 (20 U.S.C. 1092(l)(2)) is amended by
adding
at the end the following:
(L)
Information on the conditions required to
discharge the loan due to the death, disability, or inability to
engage in any
substantial gainful activity of the borrower in accordance with
section 437(a),
and an explanation that, in the case of a private education loan
made through a
private educational lender (as such terms are defined in section
140 of the
Truth in Lending Act (15 U.S.C. 1650)), the borrower, the
borrower’s estate,
and any cosigner of such a private education loan may be obligated
to repay the
full amount of the loan, regardless of the death or disability of
the borrower
or any other condition described in section 437(a).
(M)
Any repayment, refinance, deferment,
forbearance, or forgiveness opportunities available to the
borrower, or
cosigner, in the event of either individual’s death, disability, or
inability
to engage in any substantial gainful activity.
(N)
The effect that
the death, disability, or inability to engage in any substantial
gainful
activity of the borrower would have on the obligations of the
borrower and any
cosigner of the
loan.
.
(b)
Designation of
individual To act on behalf of the borrower
Section 484(a)(4) of
the Higher Education Act of 1965 (20 U.S.C. 1091(a)(4)) is amended—
(1)
in subparagraph
(A), by striking and
after the semicolon;
(2)
in subparagraph
(B), by inserting and
after the semicolon; and
(3)
by adding at the
end the following new subparagraph:
(C)
a designation by such student of an
individual who shall have the legal authority to act on behalf of
the student
with respect to any loan to the student under this title in the
event of the
student’s death, disability, or inability to engage in any
substantial gainful
activity;
.