[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2542 Introduced in House (IH)]

114th CONGRESS
  1st Session
                                H. R. 2542

    To amend the Truth in Lending Act to establish requirements for 
releasing a cosigner from obligations of a private education loan, for 
the treatment of the loan upon the death or bankruptcy of a cosigner of 
                   the loan, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 21, 2015

   Mr. Larsen of Washington introduced the following bill; which was 
            referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
    To amend the Truth in Lending Act to establish requirements for 
releasing a cosigner from obligations of a private education loan, for 
the treatment of the loan upon the death or bankruptcy of a cosigner of 
                   the loan, 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.

    This Act may be cited as the ``Bereaved Borrowers' Bill of Rights 
Act of 2015''.

SEC. 2. REQUIREMENTS FOR PRIVATE EDUCATIONAL LENDERS.

    Section 140 of the Truth in Lending Act (15 U.S.C. 1650) is amended 
by adding at the end the following new subsection:
    ``(g) Requirements Regarding Cosigners for a Private Education 
Loan.--
            ``(1) Cosigner release requirements.--If a private 
        education loan has a cosigner who is jointly liable for such 
        loan, a private educational lender shall include a process for 
        releasing the cosigner from any obligations on the loan and in 
        such process the lender--
                    ``(A) shall make the criteria for obtaining the 
                release clear, transparent, and easily accessible via 
                the website of the private educational lender;
                    ``(B) shall notify the borrower if the borrower is 
                eligible to release a cosigner;
                    ``(C) shall, if denying a request to release a 
                cosigner, provide an explanation for the denial and 
                offer the borrower an opportunity to correct the 
                request; and
                    ``(D) may not change the terms of the release to 
                impose additional duties on, or be detrimental to the 
                interests of, the borrower or cosigner over the 
                duration of the private education loan.
            ``(2) Additional requirements.--Notwithstanding any 
        provision in a private education loan agreement that contains a 
        process for releasing a cosigner from obligations on the loan, 
        a private educational lender shall, upon receiving notification 
        of the death or bankruptcy of a cosigner--
                    ``(A) notify the borrower about the borrower's 
                rights under the private education loan agreement 
                regarding the release of the cosigner; and
                    ``(B) if the borrower continues to make on-time 
                payments (in the amount determined prior to the death 
                or bankruptcy of the cosigner) on the private education 
                loan, provide a period of time of not less than 90 days 
                for the borrower to follow the process for release of 
                the cosigner before deeming that the borrower has 
                failed to repay the loan, changing the terms of the 
                loan, accelerating the repayment terms of the loan, 
                referring the loan to a debt collector (as defined in 
                section 803 of the Fair Debt Collection Practices Act 
                (15 U.S.C. 1692a)), or notifying consumer reporting 
                agencies (as defined in section 603(f)) of a change in 
                the status of the loan.
            ``(3) Credit worthiness standards.--A private educational 
        lender may not evaluate the credit worthiness, credit standing, 
        or credit capacity of a borrower or a cosigner at the time at 
        which a cosigner is released from obligations on a private 
        education loan using a different standard than was used to 
        evaluate the credit worthiness, credit standing, or credit 
        capacity of the borrower or cosigner at the time of the 
        origination of the loan.
            ``(4) Requirements for new cosigners.--Notwithstanding any 
        provision in a private education loan agreement, a private 
        educational lender shall, upon receiving notification of the 
        death or bankruptcy of a cosigner who is jointly liable for the 
        private education loan--
                    ``(A) notify the borrower about the borrower's 
                rights under the private education loan agreement 
                regarding identifying a new cosigner or refinancing the 
                loan; and
                    ``(B) if the borrower continues to make on-time 
                payments (in the amount determined prior to the death 
                or bankruptcy of the cosigner) on the private education 
                loan, provide a period of time of not less than 90 days 
                for a borrower to identify a new cosigner or refinance 
                the loan before deeming that the borrower has failed to 
                repay the loan, changing the terms of the loan, 
                accelerating the repayment terms of the loan, referring 
                the loan to a debt collector (as defined in section 803 
                of the Fair Debt Collection Practices Act (15 U.S.C. 
                1692a)), or notifying consumer reporting agencies (as 
                defined in section 603(f)) of a change in the status of 
                the loan.
            ``(5) New cosigner credit worthiness.--A private 
        educational lender may not evaluate the credit worthiness, 
        credit standing, or credit capacity of a new cosigner using a 
        stricter standard than used to evaluate the credit worthiness, 
        credit standing, or credit capacity of the original 
        cosigner.''.

SEC. 3. PROHIBITIONS FOR CONSUMER REPORTING AGENCIES AND FURNISHERS OF 
              INFORMATION TO CONSUMER REPORTING AGENCIES RELATED TO 
              PRIVATE EDUCATION LOANS.

    (a) Prohibition for Consumer Reporting Agencies.--Subsection (a) of 
section 605 of the Fair Credit Reporting Act (15 U.S.C. 1681c(a)) is 
amended by adding at the end the following new paragraph:
            ``(7) Failure to repay a private education loan (as defined 
        in section 140(a)) due to accelerated repayment terms of the 
        loan after the death or bankruptcy of a cosigner who is jointly 
        liable for the loan.''.
    (b) Prohibition for Furnishers of Information to Consumer Reporting 
Agencies.--Paragraph (1) of section 623(a) of such Act is amended by 
adding the following new subparagraph:
                    ``(E) Reporting information on private education 
                loans.--A private educational lender (as defined in 
                section 140(a)) or the servicer of a private education 
                loan (as defined in such section) shall not furnish any 
                information relating to the loan to any consumer 
                reporting agency if the consumer failed to repay the 
                loan due to accelerated repayment terms after the death 
                or bankruptcy of a cosigner who is jointly liable for 
                the loan.''.
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