[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3996 Introduced in Senate (IS)]

111th CONGRESS
  2d Session
                                S. 3996

To amend the Truth in Lending Act and the Higher Education Act of 1965 
  to require additional disclosures and protections for students and 
    cosigners with respect to student loans, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            December 1, 2010

Mr. Lautenberg introduced the following bill; which was read twice and 
    referred to the Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
To amend the Truth in Lending Act and the Higher Education Act of 1965 
  to require additional disclosures and protections for students and 
    cosigners with respect to student loans, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; FINDINGS.

    (a) Short Title.--This Act may be cited as the ``Christopher Bryski 
Student Loan Protection Act'' or ``Christopher's Law''.
    (b) Findings.--The Congress finds the following:
            (1) There is no requirement for Federal or private 
        educational lenders to provide information with respect to 
        creating a durable power of attorney for financial 
        decisionmaking in accordance with State law to be used in the 
        event of the death, incapacitation, or disability of the 
        borrower or any cosigner.
            (2) No requirement exists for private educational lenders' 
        master promissory notes to include a clear and conspicuous 
        description of the responsibilities of a borrower and cosigner 
        in the event the borrower or cosigner becomes disabled, 
        incapacitated, or dies.
            (3) 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.
            (4) 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.
            (5) In the 2007-2008 academic year, 13 percent of students 
        attending a 4-year public institution of higher education, and 
        26.2 percent of students attending a 4-year private institution 
        of higher education, borrowed monies from private educational 
        lenders.
            (6) According to Sallie Mae, in 2009, the percentage of 
        cosigned private education loans increased from 66 percent to 
        84 percent of all private education loans.

SEC. 2. ADDITIONAL STUDENT LOAN PROTECTIONS.

    (a) In General.--
            (1) Amendment.--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) Obligation to provide information about power of 
        attorney.--In conjunction with--
                    ``(A) any student loan counseling provided by a 
                covered educational institution to any new borrower and 
                any cosigner at the time of any loan application, loan 
                origination, or loan consolidation, or at the time the 
                cosigner assumes responsibility for repayment, the 
                institution shall provide information with respect to 
                creating a durable power of attorney for financial 
                decisionmaking, in accordance with the State law where 
                the institution is located; and
                    ``(B) any application for a private education loan, 
                the private educational lender involved in such loan 
                shall provide information to the borrower, and any 
                cosigner, concerning the creation of a durable power of 
                attorney for financial decisionmaking, in accordance 
                with the State law where the institution to be attended 
                by the borrower is located, with respect to such loan.
            ``(2) Clear and conspicuous description of cosigner's 
        obligation.--In the case of any private educational lender who 
        extends a private education loan for which any cosigner is 
        jointly liable, 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 Board determines would give a reasonable 
        person a reasonable understanding of the obligation being 
        assumed by becoming a cosigner for the loan.
            ``(3) Model forms.--The Board shall publish model forms 
        under section 105 for--
                    ``(A) the information required under paragraph (1) 
                with respect to a durable power of attorney for 
                financial decisionmaking for each State (and such model 
                forms under this subparagraph shall be uniform for all 
                States to the greatest extent possible); and
                    ``(B) describing a cosigner's obligation for 
                purposes of paragraph (2).
            ``(4) 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 Board 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.''.
            (2) Conforming amendment.--Effective on the designated 
        transfer date established under section 1062 of the Dodd-Frank 
        Wall Street Reform and Consumer Protection Act (12 U.S.C. 
        5582), section 140(g) of the Truth in Lending Act (15 U.S.C. 
        1650(g)), as added by this subsection, is amended by striking 
        ``Board'' each place the term occurs and inserting ``Bureau''.
    (b) Definitions.--Subsection (a) of section 140 of the Truth in 
Lending Act (15 U.S.C. 1650(a)) is amended--
            (1) by redesignating paragraphs (1) and (2) through (8) as 
        paragraphs (2) and (4) through (10), respectively;
            (2) by inserting before paragraph (2) 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;''; 
                and
            (3) by inserting after paragraph (2) (as redesignated by 
        paragraph (1)) the following:
            ``(3)(A) the term `durable power of attorney' has the 
        meaning given to such term under State law; or
            ``(B) in the case of a State that does not have a law 
        described in subparagraph (A), the terms `durable' and `power 
        of attorney' have the meanings given to such terms in section 
        102 of the Uniform Power of Attorney Act, as approved by the 
        National Conference of Commissioners on State Laws in 2006;''.

SEC. 3. FEDERAL STUDENT LOANS.

    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 (20 U.S.C. 1019)), 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)(i) The model form with respect to durable 
                power of attorney for financial decisionmaking, as 
                published by the Board of Governors of the Federal 
                Reserve System or the Bureau of Consumer Financial 
                Protection (as the case may be) in accordance with 
                section 140(g)(3)(A) of the Truth in Lending Act (15 
                U.S.C. 1650(g)(3)(A)), for the State in which the 
                institution is located.
                    ``(ii) In the case of a borrower who is not a 
                resident of the State in which the institution is 
                located, information on how to access such model form 
                for the State in which the borrower resides.''.
                                 <all>