[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5294 Introduced in House (IH)]

<DOC>






116th CONGRESS
  1st Session
                                H. R. 5294

    To amend the Truth in Lending Act to establish a postsecondary 
education loan borrower bill of rights and to require certain creditors 
   to obtain private loan certifications from institutions of higher 
education, to amend the Fair Credit Reporting Act to require the Bureau 
of Consumer Financial Protection to issue rules to establish standards 
    for reporting information related to student loans to consumer 
              reporting agencies, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            December 4, 2019

  Ms. Adams introduced the following bill; which was referred to the 
 Committee on Financial Services, and in addition to the Committee on 
Education and Labor, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
    To amend the Truth in Lending Act to establish a postsecondary 
education loan borrower bill of rights and to require certain creditors 
   to obtain private loan certifications from institutions of higher 
education, to amend the Fair Credit Reporting Act to require the Bureau 
of Consumer Financial Protection to issue rules to establish standards 
    for reporting information related to student loans to consumer 
              reporting agencies, 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 ``Student Borrower Protections Act of 
2019''.

SEC. 2. POSTSECONDARY EDUCATION LOAN BORROWER BILL OF RIGHTS.

    Chapter 2 of the Truth in Lending Act (15 U.S.C. 1631 et seq.) is 
amended--
            (1) by redesignating section 140A as section 140B;
            (2) by inserting after section 140 the following:
``Sec. 140A. Postsecondary education loan borrower bill of rights
    ``(a) Definitions.--In this paragraph:
            ``(1) Borrower.--The term `borrower' means the person to 
        whom a postsecondary education loan is extended.
            ``(2) Charge off.--The term `charge off' means charge to 
        profit and loss, or subject to any similar action.
            ``(3) Covered lender, servicer, or assignee.--The term 
        `covered lender, servicer, or assignee' means--
                    ``(A) an eligible lender (as defined under section 
                435 of the Higher Education Act of 1965) of a loan 
                made, insured, or guaranteed under part B of title IV 
                of the Higher Education Act of 1965;
                    ``(B) any entity with which the Secretary of 
                Education enters into a contract under section 456 of 
                the Higher Education Act of 1965 for origination, 
                servicing, or collection described in subsection (b) of 
                such section 456 and is engaged in the provision of, or 
                offering, servicing, or collections regardless of 
                whether the Secretary identifies the entity as a 
                `servicer' in such contract;
                    ``(C) a private educational lender (as defined 
                under section 140(a));
                    ``(D) any other person or entity engaged in the 
                business of securing, making, or extending 
                postsecondary education loans on behalf of a person or 
                entity described in subparagraph (A) or (C); or
                    ``(E) any other holder of a postsecondary education 
                loan other than the Secretary of Education.
            ``(4) Postsecondary education loan.--The term 
        `postsecondary education loan' means--
                    ``(A) a private education loan (as defined under 
                section 140(a)); or
                    ``(B) a loan made, insured, or guaranteed under 
                title IV of the Higher Education Act of 1965.
            ``(5) Qualified written request.--
                    ``(A) In general.--The term `qualified written 
                request' means a written correspondence of a borrower 
                (other than notice on a payment medium supplied by the 
                postsecondary educational lender or servicer) 
                transmitted by mail, facsimile, or electronically 
                through an email address or website designated by the 
                covered lender, servicer, or assignee to receive 
                communications from borrowers that--
                            ``(i) includes, or otherwise enables the 
                        covered lender, servicer, or assignee to 
                        identify, the name and account of the borrower; 
                        and
                            ``(ii) includes, to the extent applicable--
                                    ``(I) sufficient detail regarding 
                                the information sought by the borrower; 
                                or
                                    ``(II) a statement of the reasons 
                                for the belief of the borrower that 
                                there is an error regarding the account 
                                of the borrower.
                    ``(B) Correspondence delivered to other 
                addresses.--
                            ``(i) In general.--A written correspondence 
                        of a borrower is a qualified written request if 
                        the written correspondence is transmitted to 
                        and received by a covered lender, servicer, or 
                        assignee at a mailing address, facsimile 
                        number, email address, or website address other 
                        than the address or number designated by that 
                        covered lender, servicer, or assignee r to 
                        receive communications from borrowers but the 
                        written correspondence meets the requirements 
                        under clauses (i) and (ii) of subparagraph (A).
                            ``(ii) Duty to transfer.--A covered lender, 
                        servicer, or assignee shall, within a 
                        reasonable period of time, transfer a written 
                        correspondence of a borrower received by the 
                        covered lender, servicer, or assignee at a 
                        mailing address, facsimile number, email 
                        address, or website address other than the 
                        address or number designated by that covered 
                        lender, servicer, or assignee to receive 
                        communications from borrowers to the correct 
                        address or appropriate office or other unit of 
                        the covered lender, servicer, or assignee.
                            ``(iii) Date of receipt.--A written 
                        correspondence of a borrower transferred in 
                        accordance with clause (i) shall be deemed to 
                        be received by the covered lender, servicer, or 
                        assignee on the date on which the written 
                        correspondence is transferred to the correct 
                        address or appropriate office or other unit of 
                        the covered lender, servicer, or assignee.
            ``(6) Servicing.--The term `servicing' means one or more of 
        the following:
                    ``(A) Receiving any scheduled periodic payments 
                from a borrower or notification of such payments 
                pursuant to the terms of a postsecondary education loan 
                or contract governing the servicing.
                    ``(B) Applying payments to the borrower's account 
                pursuant to the terms of the postsecondary education 
                loan or the contract governing the servicing.
                    ``(C) Maintaining account records for a 
                postsecondary education loan.
                    ``(D) Communicating with a borrower regarding a 
                postsecondary education loan on behalf of the covered 
                lender, servicer, or assignee.
                    ``(E) Interactions with a borrower, including 
                activities to help prevent default on obligations 
                arising from postsecondary education loans, conducted 
                to facilitate the activities described in subparagraph 
                (A) or (B).
    ``(b) Sale, Transfer, or Assignment.--If the sale, other transfer, 
assignment, or transfer of servicing obligations of a postsecondary 
education loan results in a change in the identity of the party to whom 
the borrower must send subsequent payments or direct any communications 
concerning the loan--
            ``(1) the transferor shall--
                    ``(A) notify the borrower, in writing, in simple 
                and understandable terms, not fewer than 45 days before 
                transferring a legally enforceable right to receive 
                payment from the borrower on such loan, of--
                            ``(i) the sale or other transfer, 
                        assignment, or transfer of servicing 
                        obligations;
                            ``(ii) the identity of the transferee;
                            ``(iii) the name, address, and email 
                        address of the party to whom subsequent 
                        payments or communications must be sent;
                            ``(iv) the telephone numbers and websites 
                        of both the transferor and the transferee;
                            ``(v) the effective date of the sale, 
                        transfer, or assignment;
                            ``(vi) the date on which the transferor 
                        will stop accepting payment; and
                            ``(vii) the date on which the transferee 
                        will begin accepting payment;
                    ``(B) forward any payment from a borrower with 
                respect to such postsecondary education loan to the 
                transferee, immediately upon receiving such payment, 
                during the 60-day period beginning on the date on which 
                the transferor stops accepting payment of such 
                postsecondary education loan;
                    ``(C) provide to the transferee all borrower 
                information and complete payment history information 
                for any such postsecondary education loans; and
            ``(2) the transferee shall--
                    ``(A) notify the borrower, in writing, in simple 
                and understandable terms, not fewer than 45 days before 
                acquiring a legally enforceable right to receive 
                payment from the borrower on such loan, of--
                            ``(i) the sale or other transfer, 
                        assignment, or transfer of servicing 
                        obligations;
                            ``(ii) the identity of the transferor;
                            ``(iii) the name, address, and email 
                        address of the party to whom subsequent 
                        payments or communications must be sent;
                            ``(iv) the telephone numbers and websites 
                        of both the transferor and the transferee;
                            ``(v) the effective date of the sale, 
                        transfer, assignment, or transfer of servicing 
                        obligations;
                            ``(vi) the date on which the transferor 
                        will stop accepting payment; and
                            ``(vii) the date on which the transferee 
                        will begin accepting payment;
                    ``(B) accept as on-time and may not impose any late 
                fee or finance charge for any payment from a borrower 
                with respect to such postsecondary education loan that 
                is forwarded from the transferor during the 90-day 
                period beginning on the date on which the transferor 
                stops accepting payment, if the transferor receives 
                such payment on or before the applicable due date, 
                including any grace period;
                    ``(C) provide borrowers a simple, online process 
                for transferring existing electronic fund transfer 
                authority; and
                    ``(D) honor any promotion or benefit available or 
                granted to the borrower or advertised by the previous 
                owner or transferor of such postsecondary education 
                loan.
    ``(c) Material Change in Mailing Address or Procedure for Handling 
Payments.--
            ``(1) In general.--If a covered lender, servicer, or 
        assignee makes a change in the mailing address, office, or 
        procedures for handling payments with respect to any 
        postsecondary education loan, the covered lender, servicer, or 
        assignee shall clearly and conspicuously notify the borrower in 
        writing and through the borrower's preferred or designated 
        method of communication not less than 45 calendar days in 
        advance of such change.
            ``(2) Borrower protection window.--If a change described in 
        paragraph (1) causes a delay in the crediting of the account of 
        the borrower made during the 90-day period following the date 
        on which such change took effect, the covered lender, servicer, 
        or assignee may not impose on the borrower any negative 
        consequences, including negative credit reporting, lost 
        eligibility in borrower benefits, late fees, interest 
        capitalization, or other financial injury.
            ``(3) Loan forgiveness programs.--For purposes of any 
        public or private loan forgiveness program that applies to a 
        postsecondary education loan, such program shall not be tolled 
        during the 90-day period following the date on which a change 
        described under paragraph (1) takes effect.
    ``(d) Interest Rate and Term Changes for Certain Postsecondary 
Education Loans.--
            ``(1) Notification requirements.--
                    ``(A) In general.--Except as provided in paragraph 
                (3), a covered lender, servicer, or assignee shall 
                provide written notice to a borrower of any material 
                change in the terms of the postsecondary education 
                loan, including an increase in the interest rate, not 
                later than 45 days before the effective date of the 
                change or increase.
                    ``(B) Material changes in terms.--The Bureau shall, 
                by regulation, establish guidelines for determining 
                which changes in terms are material under subparagraph 
                (A).
            ``(2) Limits on interest rate and fee increases applicable 
        to outstanding balance.--Except as provided in paragraph (3), a 
        covered lender, servicer, or assignee may not increase the 
        interest rate or other fee applicable to an outstanding balance 
        on a postsecondary education loan.
            ``(3) Exceptions.--The requirements under paragraphs (1) 
        and (2) shall not apply to--
                    ``(A) an increase based on an applicable variable 
                interest rate incorporated in the terms of a 
                postsecondary education loan that provides for changes 
                in the interest rate according to operation of an index 
                that is not under the control of the covered lender, 
                servicer, or assignee and is published for viewing by 
                the general public;
                    ``(B) an increase in interest rate due to the 
                completion of a workout or temporary hardship 
                arrangement by the borrower or the failure of the 
                borrower to comply with the terms of a workout or 
                temporary hardship arrangement if--
                            ``(i) the interest rate applicable to a 
                        category of transactions following any such 
                        increase does not exceed the rate or fee that 
                        applied to that category of transactions prior 
                        to commencement of the workout or temporary 
                        hardship arrangement; and
                            ``(ii) the covered lender, servicer, or 
                        assignee has provided the borrower, prior to 
                        the commencement of such arrangement, with 
                        clear and conspicuous disclosure of the terms 
                        of the workout or temporary hardship 
                        arrangement (including any increases due to 
                        such completion or failure); and
                    ``(C) an increase in interest rate due to a 
                provision included within the terms of a postsecondary 
                education loan that provides for a lower interest rate 
                based on the borrower's agreement to a prearranged plan 
                that authorizes recurring electronic funds transfers 
                if--
                            ``(i) the borrower withdraws the borrower's 
                        authorization of the prearranged recurring 
                        electronic funds transfer plan; and
                            ``(ii) after withdrawal of the borrower's 
                        authorization and prior to increasing the 
                        interest rate, the covered lender, servicer, or 
                        assignee has provided the borrower with clear 
                        and conspicuous disclosure of the impending 
                        change in borrower's interest rate and a 
                        reasonable opportunity to reauthorize the 
                        prearranged electronic funds transfers plan.
    ``(e) Payment Information.--
            ``(1) Statement required with each billing cycle.--A 
        covered lender, servicer, or assignee for each borrower's 
        account that is being serviced by the covered lender, servicer, 
        or assignee and that includes a postsecondary education loan 
        shall transmit to the borrower, for each billing cycle during 
        which there is an outstanding balance in that account, a 
        billing statement that includes--
                    ``(A) the interest rate, principal balance, minimum 
                monthly payment, and payment due date for each loan;
                    ``(B) the outstanding balance in the account and 
                each loan at the beginning of the billing cycle;
                    ``(C) the total amount credited to the account and 
                each loan during the billing cycle;
                    ``(D) the total amount of unpaid interest for the 
                account and each loan;
                    ``(E) the amount of any fee added to the account 
                during the billing cycle, itemized to show each 
                individual fee amount and reason for each fee;
                    ``(F) the address, email address, and phone number 
                of the covered lender, servicer, or assignee to which 
                the borrower may direct billing inquiries;
                    ``(G) the amount of any payments or other credits 
                during the billing cycle that was applied respectively 
                to the principal and to interest for each loan;
                    ``(H) the manner, pursuant to subsection (g), in 
                which payments will be allocated among multiple loans 
                if the borrower does not provide specific payment 
                instructions;
                    ``(I) whether each loan is in deferment or 
                forbearance;
                    ``(J) information on how to file a complaint with 
                the Bureau and with the ombudsman designated pursuant 
                to section 1035 of the Consumer Financial Protection 
                Act of 2010 and the Department of Education;
                    ``(K) for any borrower considered to be at risk, as 
                described in subsection (j)(1), a statement that a 
                repayment specialist office or unit designated under 
                subsection (j) is available to answer inquiries related 
                to alternative repayment options, including the toll-
                free telephone number to contact the specialist 
                pursuant to subsection (j)(3); and
                    ``(L) any other information determined appropriate 
                by rule of the Bureau.
            ``(2) Disclosure of payment deadlines.--In the case of a 
        postsecondary education loan account under which a late fee or 
        charge may be imposed due to the failure of the borrower to 
        make payment on or before the due date for such payment, the 
        billing statement required under paragraph (1) with respect to 
        the account shall include, in a conspicuous location on the 
        billing statement, the date on which the payment is due or, if 
        different, the date on which a late fee will be charged, 
        together with the amount of the late fee to be imposed if 
        payment is made after that date.
    ``(f) Application of Payments.--
            ``(1) Apply payment on date received.--Unless otherwise 
        directed by the borrower, a covered lender, servicer, or 
        assignee shall apply payments to a borrower's account on the 
        date the payment is received.
            ``(2) Promulgation of rules.--The Bureau may issue rules 
        for the application of postsecondary education loan payments 
        that--
                    ``(A) implements the requirements in this section;
                    ``(B) minimizes the amount of fees and interest 
                incurred by the borrower and the total loan amount paid 
                by the borrower;
                    ``(C) minimizes delinquencies, assignments to 
                collection, and charge offs;
                    ``(D) requires covered lender, servicer, or 
                assignee to apply payments on the date received; and
                    ``(E) allows the borrower to instruct the covered 
                lender, servicer, or assignee to apply payments in a 
                manner preferred by the borrower.
            ``(3) Method that best benefits borrower.--In promulgating 
        the rules under paragraph (2), the Bureau shall choose the 
        allocation method that best benefits the borrower and is 
        compatible with existing repayment options.
    ``(g) Allocation of Payments Among Multiple Loans.--
            ``(1) Allocation of underpayments.--Unless otherwise 
        directed by the borrower, upon receipt of a payment that does 
        not satisfy the full amount due for each postsecondary 
        education loan, the covered lender, servicer, or assignee shall 
        allocate amounts in a manner that minimizes negative 
        consequences, including negative credit reporting and late 
        fees, and, where multiple loans share an equal stage of 
        delinquency, the covered lender, servicer, or assignee shall 
        first allocate payment to the postsecondary education loan with 
        the smallest monthly payment, and then, after satisfying that 
        monthly payment, to each successive loan bearing the next 
        highest monthly payment, until the payment is exhausted. A 
        borrower may instruct or expressly authorize a covered lender, 
        servicer, or assignee to allocate payments in a different 
        manner.
            ``(2) Allocation of excess amounts.--Unless otherwise 
        directed by the borrower, upon receipt of a payment exceeding 
        the total amount due among all the borrower's postsecondary 
        education loans, the covered lender, servicer, or assignee 
        shall satisfy the amounts due for each loan, and then allocate 
        amounts in excess of the minimum payment amount first to the 
        postsecondary education loan balance bearing the highest annual 
        percentage rate, and then, once that loan is repaid, to each 
        successive postsecondary education loan bearing the next 
        highest annual percentage rate, until the payment is exhausted. 
        A borrower may instruct or expressly authorize a covered 
        lender, servicer, or assignee to allocate such excess payments 
        in a different manner.
            ``(3) Allocation of exact payments.--Unless otherwise 
        directed by the borrower upon receipt of a payment that exactly 
        satisfies the monthly payments for each loan, the covered 
        lender, servicer, or assignee shall allocate payments to 
        satisfy each monthly payment.
            ``(4) Promulgation of rules.--The Bureau may issue rules 
        for the allocation of payments among multiple postsecondary 
        education loans that comply with the requirements of subsection 
        (f)(2).
            ``(5) Method that best benefits borrower.--In promulgating 
        the rules under paragraph (4), the Director shall choose the 
        allocation method that best benefits the borrower and is 
        compatible with existing repayment options.
    ``(h) Late Fees.--
            ``(1) In general.--A late fee may not be charged to a 
        borrower for a postsecondary education loan under any of the 
        following circumstances, either individually or in combination:
                    ``(A) On a per-loan basis when a borrower has 
                multiple postsecondary education loans.
                    ``(B) In an amount greater than 4 percent of the 
                amount of the payment past due.
                    ``(C) Before the end of the 15-day period beginning 
                on the date the payment is due.
                    ``(D) More than once with respect to a single late 
                payment.
                    ``(E) The borrower fails to make a singular, non-
                successive regularly scheduled payment on the 
                postsecondary education loan.
            ``(2) Coordination with subsequent late fees.--No late fee 
        may be charged to a borrower for a postsecondary education loan 
        relating to an insufficient payment if the payment is made on 
        or before the due date of the payment, or within any applicable 
        grace period for the payment, if the insufficiency is 
        attributable only to a late fee relating to an earlier payment, 
        and the payment is otherwise a full payment for the applicable 
        period.
            ``(3) Payments at local branches.--If the loan holder, in 
        the case of a postsecondary education loan account, is a 
        financial institution that maintains a branch or office at 
        which payments on any such account are accepted from the 
        borrower in person, the date on which the borrower makes a 
        payment on the account at such branch or office shall be 
        considered to be the date on which the payment is made for 
        purposes of determining whether a late fee may be imposed due 
        to the failure of the borrower to make payment on or before the 
        due date for such payment.
    ``(i) Borrower Inquiries.--
            ``(1) Duty of covered lender, servicer, or assignee to 
        respond to borrower inquiries.--
                    ``(A) Notice of receipt of request.--If a borrower 
                submits a qualified written request to the covered 
                lender, servicer, or assignee for information relating 
                to the servicing of the postsecondary education loan, 
                the covered lender, servicer, or assignee shall provide 
                a written response acknowledging receipt of the 
                qualified written request within 5 business days unless 
                any action requested by the borrower is taken within 
                such period.
                    ``(B) Action with respect to inquiry.--Not later 
                than 30 business days after the receipt from a borrower 
                of a qualified written request under subparagraph (A) 
                and, if applicable, before taking any action with 
                respect to the qualified written request of the 
                borrower, the covered lender, servicer, or assignee 
                shall--
                            ``(i) make appropriate corrections in the 
                        account of the borrower, including the 
                        crediting of any late fees, and transmit to the 
                        borrower a written notification of such 
                        correction (which shall include the name and 
                        toll-free or collect-call telephone number of a 
                        representative of the covered lender, servicer, 
                        or assignee who can provide assistance to the 
                        borrower);
                            ``(ii) after conducting an investigation, 
                        provide the borrower with a written explanation 
                        or clarification that includes--
                                    ``(I) to the extent applicable, a 
                                statement of the reasons for which the 
                                covered lender, servicer, or assignee 
                                believes the account of the borrower is 
                                correct as determined by the covered 
                                lender, servicer, or assignee; and
                                    ``(II) the name and toll-free or 
                                collect-call telephone number of an 
                                individual employed by, or the office 
                                or department of, the covered lender, 
                                servicer, or assignee who can provide 
                                assistance to the borrower; or
                            ``(iii) after conducting an investigation, 
                        provide the borrower with a written explanation 
                        or clarification that includes--
                                    ``(I) information requested by the 
                                borrower or explanation of why the 
                                information requested is unavailable or 
                                cannot be obtained by the covered 
                                lender, servicer, or assignee; and
                                    ``(II) the name and toll-free or 
                                collect-call telephone number of an 
                                individual employed by, or the office 
                                or department of, the covered lender, 
                                servicer, or assignee who can provide 
                                assistance to the borrower.
                    ``(C) Limited extension of response time.--
                            ``(i) In general.--There may be 1 extension 
                        of the 30-day period described in subparagraph 
                        (B) of not more than 15 days if, before the end 
                        of such 30-day period, the covered lender, 
                        servicer, or assignee notifies the borrower of 
                        the extension and the reasons for the delay in 
                        responding.
                            ``(ii) Reports to bureau.--Each covered 
                        lender, servicer, or assignee shall, on an 
                        annual basis, report to the Bureau the 
                        aggregate number of extensions sought by the 
                        such covered lender, servicer, or assignee 
                        under clause (i).
            ``(2) Protection against negative consequences.--During the 
        60-day period beginning on the date on which a covered lender, 
        servicer, or assignee receives a qualified written request from 
        a borrower relating to a dispute regarding payments by the 
        borrower, a covered lender, servicer, or assignee may not 
        impose any negative consequences on the borrower relating to 
        the subject of the qualified written request or to such period 
        including--
                    ``(A) providing negative credit information to any 
                consumer reporting agency (as defined in section 603 of 
                the Fair Credit Reporting Act);
                    ``(B) lost eligibility for a borrower benefit;
                    ``(C) late fees;
                    ``(D) interest capitalization; or
                    ``(E) other financial injury.
    ``(j) Repayment Specialists for At-Risk Borrowers.--
            ``(1) At-risk borrowers.--A covered lender, servicer, or 
        assignee shall designate an office or other unit to act as a 
        repayment specialist regarding postsecondary education loans 
        for--
                    ``(A) any borrower who--
                            ``(i) becomes 30 calendar days or more 
                        delinquent under the postsecondary education 
                        loan; or
                            ``(ii) notifies the covered lender, 
                        servicer, or assignee that the borrower is 
                        having difficulty making payment;
                    ``(B) any borrower who requests information related 
                to options to reduce or suspend the borrower's monthly 
                payment, or otherwise indicates that the borrower is 
                experiencing or is about to experience financial 
                hardship or distress;
                    ``(C) any borrower who has not completed the 
                program of study for which the borrower received the 
                loans;
                    ``(D) any borrower who is enrolled in discretionary 
                forbearance for more than nine of the previous 12 
                months;
                    ``(E) any borrower who has rehabilitated or 
                consolidated one or more postsecondary education loans 
                out of default within the prior 24 months;
                    ``(F) a borrower who seeks information regarding, 
                seeks to enter an agreement for, or seeks to resolve an 
                issue under a repayment option that requires subsequent 
                submission of supporting documentation;
                    ``(G) a borrower who seeks to modify the terms of 
                the repayment of the postsecondary education loan 
                because of hardship; and
                    ``(H) any borrower or segment of borrowers 
                determined by the Bureau, in consultation with the 
                Secretary of Education, to be at risk.
            ``(2) Training.--Staff of the repayment specialist office 
        or unit designated under paragraph (1) shall--
                    ``(A) receive rigorous, ongoing training related to 
                available repayment plans, loan forgiveness, and 
                cancellation and discharge options; and
                    ``(B) be trained to--
                            ``(i) assess the borrower's long-term and 
                        short-term financial situation in discussing 
                        alternative repayment options with borrowers;
                            ``(ii) inform borrowers, when there is 
                        sufficient information to determine that a 
                        borrower may be eligible, about closed-school 
                        discharge, discharge under defense to 
                        repayment, or total and permanent disability 
                        discharge prior to informing the borrower about 
                        any other options for repayment; and
                            ``(iii) inform borrowers about alternative 
                        repayment options, prior to discussing 
                        forbearance and deferment.
            ``(3) Toll-free telephone number.--Each covered lender, 
        servicer, or assignee shall maintain a toll-free telephone 
        number that shall--
                    ``(A) connect directly to the repayment specialist 
                office or unit designated under paragraph (1);
                    ``(B) be made available on the primary internet 
                website of the covered lender, servicer, or assignee, 
                on monthly billing statements, and any required 
                disclosures; and
                    ``(C) not subject borrowers to unreasonable call 
                wait times.
            ``(4) Compensation.--Staff of the repayment specialist 
        office or unit designated under paragraph (1) shall not be 
        compensated on the basis of the volume of calls or accounts 
        handled, dollar amounts collected, brevity of calls, or in any 
        other manner that may encourage undue haste and lack of 
        diligence or quality customer service.
    ``(k) Actions When Borrower Is Having Difficulty Making Payment or 
Is 60 Days Delinquent.--
            ``(1) In general.--Not more than 5 days after a borrower 
        notifies a covered lender, servicer, or assignee that the 
        borrower is having difficulty making payment or a borrower 
        becomes 60 days delinquent on a postsecondary education loan, 
        the repayment specialist office or unit designated under 
        subsection (j) shall--
                    ``(A) complete a full review of the borrower's 
                postsecondary education loan and make a reasonable 
                effort to obtain the information necessary to 
                determine--
                            ``(i) if the borrower is eligible for an 
                        alternative repayment option, including Federal 
                        Direct Consolidation Loans under part D of 
                        title IV of the Higher Education Act of 1965 
                        (20 U.S.C. 1087a et seq.), as applicable;
                            ``(ii) if the borrower is eligible for 
                        servicemember or veteran benefits under the 
                        Servicemembers Civil Relief Act (50 U.S.C. App. 
                        501 et seq.) or other Federal or State law 
                        related to postsecondary education loans; and
                            ``(iii) if the postsecondary education loan 
                        is eligible for discharge by the Secretary of 
                        Education;
                    ``(B) make a good faith effort to establish live 
                contact with the borrower to provide the borrower 
                information about alternative repayment options and 
                benefits for which the borrower is eligible, including 
                all terms, conditions, and fees or costs associated 
                with such repayment plan;
                    ``(C) provide to the borrower in writing, in simple 
                and understandable terms, such information required by 
                subparagraph (B);
                    ``(D) allow the borrower not less than 30 days to 
                apply for an alternative repayment option or benefits, 
                if eligible;
                    ``(E) notify the borrower that a servicemember and 
                veterans liaison designated under subsection (l) is 
                available to answer inquiries about servicemember and 
                veteran benefits related to postsecondary education 
                loans, including the toll-free telephone number to 
                contact the liaison; and
                    ``(F) notify the borrower that a repayment 
                specialist office or unit designated under subsection 
                (j) is available to answer inquiries related to 
                alternative repayment options, including the toll-free 
                telephone number to contact the specialist.
            ``(2) Forbearance or deferment.--If, after receiving 
        information about alternative repayment options from the 
        repayment specialist, a borrower notifies the covered lender, 
        servicer, or assignee that a long-term alternative repayment 
        option is not appropriate, the covered lender, servicer, or 
        assignee may comply with this subsection by providing the 
        borrower, in writing, in simple and understandable terms, 
        information about short-term options to address an anticipated 
        short-term difficulty in making payments, such as forbearance 
        or deferment options, including all terms, conditions, and fees 
        or costs associated with such options.
            ``(3) Notification process.--
                    ``(A) In general.--Each covered lender, servicer, 
                or assignee shall establish a process, in accordance 
                with paragraph (1), for a borrower to notify the 
                covered lender, servicer, or assignee that--
                            ``(i) the borrower is having difficulty 
                        making payments on a postsecondary education 
                        loan; and
                            ``(ii) a long-term alternative repayment 
                        option is not appropriate.
                    ``(B) Bureau requirements.--The Director of the 
                Bureau shall, based on consumer testing and in 
                consultation with the Secretary of Education, 
                promulgate rules establishing minimum standards for 
                covered lenders, servicers, or assignees in carrying 
                out the requirements of this subsection and a model 
                form for borrowers to notify a covered lender, 
                servicer, or assignee of the information under this 
                subsection.
    ``(l) Servicemembers, Veterans, and Postsecondary Education 
Loans.--
            ``(1) Servicemember and veterans liaison.--Each covered 
        lender, servicer, or assignee shall designate an employee to 
        act as the servicemember and veterans liaison who is 
        responsible for answering inquiries from servicemembers and 
        veterans, and is specially trained on servicemember and veteran 
        benefits under the Servicemembers Civil Relief Act and other 
        Federal or State laws related to postsecondary education loans.
            ``(2) Toll-free telephone number.--Each covered lender, 
        servicer, or assignee shall maintain a toll-free telephone 
        number that shall--
                    ``(A) connect directly to the servicemember and 
                veterans liaison designated under paragraph (1);
                    ``(B) be made available on the primary internet 
                website of the covered lender, servicer, or assignee 
                and on monthly billing statements; and
                    ``(C) not subject borrowers to unreasonable call 
                wait times.
            ``(3) Prohibition on charge offs and default.--A covered 
        lender, servicer, or assignee may not charge off or report a 
        postsecondary education loan as delinquent, assigned to 
        collection (internally or by referral to a third party), in 
        default, or charged off to a credit reporting agency if the 
        borrower is on active duty in the Armed Forces (as defined in 
        section 101(d)(1) of title 10, United States Code) serving in a 
        combat zone (as designated by the President under section 
        112(c) of the Internal Revenue Code of 1986).
            ``(4) Additional liaisons.--The Director, in consultation 
        with the Secretary, shall determine additional entities with 
        whom borrowers interact, including guaranty agencies, that 
        shall designate an employee to act as the servicemember and 
        veterans liaison who is responsible for answering inquiries 
        from servicemembers and veterans and is specially trained on 
        servicemembers and veteran benefits and option under the 
        Servicemembers Civil Relief Act.
    ``(m) Borrower's Loan History.--
            ``(1) In general.--A covered lender, servicer, or assignee 
        shall make available in a secure electronic form usable by 
        borrowers, or in writing upon request, the loan history of each 
        borrower for each postsecondary education loan, separately 
        designating--
                    ``(A) payment history, including repayment plan and 
                payments--
                            ``(i) made on such loan to previous covered 
                        lender, servicer, or assignee; and
                            ``(ii) qualifying toward a loan forgiveness 
                        program and designating such program;
                    ``(B) loan history, including any forbearances, 
                deferrals, delinquencies, assignment to collection, and 
                charge offs;
                    ``(C) annual percentage rate history;
                    ``(D) key loan terms, including application of 
                payments to interest, principal, and fees, origination 
                date, principal, capitalized interest, annual 
                percentage rate, including any cap, loan term, and any 
                contractual incentives;
                    ``(E) amount due to pay off the outstanding 
                balance; and
                    ``(F) any other items determined appropriate by 
                rule of the Bureau.
            ``(2) Original documentation.--A covered lender, servicer, 
        or assignee shall make available to the borrower, if requested, 
        at no charge, copies of the original loan documents and the 
        promissory note for each postsecondary education loan.
    ``(n) Additional Servicing Standards.--
            ``(1) Prohibitions.--A covered lender, servicer, or 
        assignee may not--
                    ``(A) charge a fee for responding to a qualified 
                written request under this paragraph;
                    ``(B) fail to take timely action to respond to a 
                qualified written request from a borrower to correct an 
                error relating to an allocation of payment or the 
                payoff amount of the postsecondary education loan;
                    ``(C) fail to take reasonable steps to avail the 
                borrower of all possible alternative repayment 
                arrangements to avoid default;
                    ``(D) fail to perform the obligations required 
                under title IV of the Higher Education Act of 1965;
                    ``(E) fail to respond within 10 business days to a 
                request from a borrower to provide the name, address, 
                and other relevant contact information of the loan 
                holder of the borrower's postsecondary education loan 
                or, for a Federal Direct Loan or a Federal Perkins 
                Loan, the Secretary of Education, or the institution of 
                higher education who made the loan, respectively;
                    ``(F) fail to comply with any applicable 
                requirement of the Servicemembers Civil Relief Act;
                    ``(G) charge a convenience, processing, or any 
                other fee for payments made electronically or by 
                telephone;
                    ``(H) fail to comply with any other obligation that 
                the Bureau, by regulation, has determined to be 
                appropriate to carry out the consumer protection 
                purposes of this paragraph; or
                    ``(I) fail to perform other standard servicing 
                duties and functions.
            ``(2) Business hours.--Covered lenders, servicers, or 
        assignees shall be open for borrower inquiries and outreach--
                    ``(A) during normal business hours, Monday through 
                Friday;
                    ``(B) after business hours, Monday through Friday, 
                including for not less than 3 hours after 5:00 p.m. in 
                all continental United States time zones;
                    ``(C) for not less than 6 hours on Saturday; and
                    ``(D) for not less than 6 hours on Sunday.
            ``(3) Additional standards.--The Bureau may issue rules 
        establishing additional servicing standards to reduce 
        delinquencies, assignment to collections, defaults, and charge 
        offs, and to ensure borrowers understand their rights and 
        obligations related to their postsecondary education loans.
    ``(o) Prohibition on Limiting Borrower Legal Action by Covered 
Lender, Servicer, or Assignee.--
            ``(1) Waiver of rights and remedies.--Any rights and 
        remedies available to borrowers against covered lenders, 
        servicers, or assignees may not be waived by any agreement, 
        policy, or form, including by a mandatory predispute 
        arbitration agreement or class action waiver.
            ``(2) Predispute arbitration agreements.--No limitation or 
        restriction on the ability of a borrower to pursue a claim in 
        court with respect to a postsecondary education loan, including 
        mandatory predispute arbitration agreements and class action 
        waivers, shall be valid or enforceable by a covered lender, 
        servicer, or assignee, including as a third-party beneficiary 
        or by estoppel.
    ``(p) Preemption.--Nothing in this paragraph may be construed to 
preempt any provision of State law regarding postsecondary education 
loans where the State law provides stronger consumer protections.
    ``(q) Civil Liability.--A covered lender, servicer, or assignee 
that fails to comply with any requirement imposed under this paragraph 
shall be deemed a creditor that has failed to comply with a requirement 
under this chapter for purposes of liability under section 130 and such 
covered lender, servicer, or assignee shall be subject to the liability 
provisions under such section, including the provisions under 
paragraphs (1), (2)(A)(i), (2)(B), and (3) of section 130(a).
    ``(r) Eligibility for Discharge.--The Bureau shall issue rules 
requiring covered lender, servicer, or assignee to--
            ``(1) identify and contact borrowers who may be eligible 
        for student loan discharge by the Secretary, including under 
        section 437 of the Higher Education Act of 1965; and
            ``(2) provide the borrower, in writing, in simple and 
        understandable terms, information about obtaining such 
        discharge.
    ``(s) Model Disclosure Form for Alternative Repayment Options, 
Forbearance, and Deferment Options.--Not later than 2 years after the 
date of enactment of this section, the Director of the Bureau shall, 
based on consumer testing and in consultation with the Secretary of 
Education, develop and issue, pursuant to a formal rulemaking, model 
forms to allow borrowers to compare alternative repayment options, 
forbearance, and deferment options with the borrower's existing 
repayment plan with respect to a postsecondary education loan. In 
developing such forms, the Director shall consider and evaluate the 
following for inclusion:
            ``(1) The total amount to be paid over the life of the 
        loan.
            ``(2) The total amount in interest to be paid over the life 
        of the loan.
            ``(3) The monthly payment amount.
            ``(4) The expected pay-off date.
            ``(5) Other related fees and costs, as applicable.
            ``(6) Eligibility requirements, and how the borrower can 
        apply for an alternative repayment option, forbearance, or 
        deferment option.
            ``(7) Any relevant consequences due to action or inaction, 
        such as default, including any actions that would result in the 
        loss of eligibility for alternative repayment options, 
        forbearance, or deferment options.
    ``(t) Student Loan Servicing Interagency Working Group.--
            ``(1) In general.--Not later than 30 days after the date of 
        enactment of this section, the Director of the Bureau shall 
        establish a student loan servicing interagency working group 
        co-chaired by the Director and the Secretary of Education and 
        including the Chief Operating Officer of the Office of Federal 
        Student Aid of the Department of Education, the Director of the 
        Office of Management and Budget, the Secretary of the Treasury, 
        and the heads of any other relevant Federal departments or 
        agencies.
            ``(2) Advisory report on rulemaking.--
                    ``(A) In general.--Not later than 120 days after 
                the date the working group under paragraph (1) is 
                established, the working group shall publish an 
                advisory report making recommendations to the Director 
                of the Bureau related to the promulgation of 
                regulations under this section with respect to entities 
                with which the Secretary has entered into a contract 
                under section 456 of the Higher Education Act of 1965.
                    ``(B) Public feedback.--Following the publication 
                of the advisory report required under subparagraph (A), 
                the working group shall accept, for not less than 60 
                days, from the public specific feedback on the 
                recommendations included in the report.
            ``(3) Publication of final recommendations.--Not later than 
        30 days following the conclusion of the public feedback process 
        described in paragraph (2)(B), the working group shall publish 
        final recommendations for the Director of the Bureau related to 
        the promulgation of regulations under this section.
            ``(4) Policy direction to federal student aid.--The working 
        group shall develop and propose policy direction for the 
        Secretary of Education to issue to the Office of Federal 
        Student Aid, through which the Office of Federal Student Aid 
        shall incorporate, into contracts awarded under section 456 of 
        the Higher Education Act of 1965, applicable requirements and 
        standards promulgated under this section.
            ``(5) Meetings.--After the working group publishes final 
        recommendations under paragraph (3), the working group shall 
        meet not less often than once per year including to--
                    ``(A) evaluate the application of regulations 
                promulgated under this section on entities with which 
                the Secretary has entered into a contract under section 
                456 of the Higher Education Act of 1965;
                    ``(B) evaluate the Office of Federal Student Aid's 
                implementation of policy direction developed pursuant 
                to paragraph (4);
                    ``(C) develop and implement an oversight plan to 
                ensure compliance by entities with which the Secretary 
                has entered into a contract under section 456 of the 
                Higher Education Act of 1965 with policy direction 
                developed under paragraph (4) and regulations 
                promulgated under this section; and
                    ``(D) undertake other activities to improve 
                coordination among the members of the working group as 
                it relates to the Secretary's administration of the 
                Federal Direct Loan Program.
            ``(6) Rule of construction.--Nothing in this subsection may 
        be construed to alter, limit, or restrict the Bureau's 
        obligations under chapter 5 of title 5, United States Code 
        (commonly known as the `Administrative Procedures Act'), 
        including the Director's obligation to provide notice, solicit 
        public comment, and respond to such comment when issuing 
        regulations.''; and
            (3) in the table of contents, by striking the item relating 
        to section 140A and inserting the following:

``140A. Postsecondary education loan borrower bill of rights.
``140B. Procedure for timely settlement of estates of decedent 
                            obligors.''.

SEC. 3. STANDARDS FOR REPORTING STUDENT LOAN INFORMATION TO CONSUMER 
              REPORTING AGENCIES.

    Section 623 of the Fair Credit Reporting Act (15 U.S.C. 1681s-2) is 
amended--
            (1) by adding at the end the following:
    ``(f) Reporting Information Related to Student Loans.--
            ``(1) Standards for reporting.--The Bureau, in consultation 
        with the Secretary of Education, shall issue rules to establish 
        standards for the furnishing of information related to student 
        loans to a consumer reporting agency and any furnisher of such 
        information shall comply with such rules.
            ``(2) Specific standards.--In issuing rules under paragraph 
        (1), the Bureau shall specifically establish standards for the 
        furnishing of information related to--
                    ``(A) the transfer of the servicing of a student 
                loan to a new servicer;
                    ``(B) the loan term or duration of a student loan; 
                or
                    ``(C) a student loan being placed in forbearance.
            ``(3) Responsibilities of the private education loan 
        ombudsman.--
                    ``(A) Monitoring consumer complaints.--The Private 
                Education Loan Ombudsman of the Bureau (in this 
                subsection referred to as the `Ombudsman') shall 
                monitor complaints from consumers to assess compliance 
                with the rules issued under paragraph (1) and, if the 
                Ombudsman determines it appropriate, recommend 
                supervisory or enforcement actions to the Director of 
                the Bureau with respect to a person the Ombudsman 
                determines may be in violation of such rules.
                    ``(B) Recommendations on dispute process.--The 
                Ombudsman shall issue periodic recommendations to the 
                Director of the Bureau and the Congress on regulatory 
                and statutory changes that the Ombudsman believes would 
                improve the process under this section for disputing 
                information related to student loans that has been 
                furnished to a consumer reporting agency.
            ``(4) Monitoring compliance.--The Director of the Bureau 
        shall monitor compliance with the rules issued under paragraph 
        (1) and, if the Director determines that a person may be in 
        violation of such rules, take such supervisory or enforcement 
        actions as the Director determines appropriate.
            ``(5) Student loan defined.--In this subsection, the term 
        `student loan' means--
                    ``(A) a private education loan, as defined in 
                section 140(a) of the Truth in Lending Act; and
                    ``(B) a loan made, insured, or guaranteed under 
                title IV of the Higher Education Act of 1965.''; and
            (2) in subsection (c)(2), by striking ``subsection (b) of 
        this section'' and inserting ``subsection (b) or (f) of this 
        section (including any regulations issued thereunder)''.

SEC. 4. INSTITUTIONAL CERTIFICATION.

    (a) In General.--Section 128(e) of the Truth in Lending Act (15 
U.S.C. 1638(e)) is amended--
            (1) by striking paragraph (3) and inserting the following:
            ``(3) Private loan certification required.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), a private educational lender shall, 
                before consummating any loan with respect to a student 
                attending an institution of higher education, obtain, 
                from the institution of higher education the student 
                intends to attend, a private loan certification as 
                described in subparagraph (E).
                    ``(B) Exception.--A private educational lender may 
                consummate a private education loan with respect to a 
                student attending an institution of higher education 
                without obtaining a private loan certification as 
                required in subparagraph (A) if, in, before the end of 
                the 15-day period following the date on which the 
                private educational lender requests a certification 
                from such institution, such institution does not--
                            ``(i) notify the private educational lender 
                        of the refusal of the institution to provide 
                        such certification; or
                            ``(ii) notify the private educational 
                        lender that more time will be needed to comply 
                        with the request for the private loan 
                        certification.
                    ``(C) Private loan certification contents.--Any 
                private loan certification provided by an institution 
                of higher education pursuant to subparagraph (A) shall 
                include--
                            ``(i) the enrollment status of the student;
                            ``(ii) the cost of attendance at the 
                        institution for the student as determined by 
                        the institution under part F of title IV of the 
                        Higher Education Act of 1965; and
                            ``(iii) the difference between--
                                    ``(I) such cost of attendance; and
                                    ``(II) the total estimated amount 
                                of financial assistance for such 
                                student, including assistance received 
                                under title IV of the Higher Education 
                                Act of 1965.
                    ``(D) Consummation of loan without certification.--
                If a private educational lender consummates a loan in 
                violation of this subsection, such private education 
                lender shall report the consummation of such loan in a 
                manner determined by the Bureau.
                    ``(E) Institution provision of certification.--If a 
                private educational lender submits a request to an 
                institution of higher education for a private loan 
                certificate, such institution of higher education 
                shall, not later than the end of the 15-day period 
                beginning on the date such institution receives such 
                request--
                            ``(i) provide such certification;
                            ``(ii) notify the private educational 
                        lender that the institution refuses to provide 
                        such certification; or
                            ``(iii) notify the private educational 
                        lender that more time will be needed to comply 
                        with the request for the private loan 
                        certification.
                    ``(F) Institution disclosures to borrower.--Before 
                providing a private loan certification to a private 
                educational lender, an institution of higher education 
                shall provide to the borrower notice of--
                            ``(i) the amount of any Federal student 
                        assistance under title IV of the Higher 
                        Education Act of 1965 for which the borrower is 
                        eligible;
                            ``(ii) the advantages of Federal student 
                        assistance under title IV of the Higher 
                        Education Act of 1965, including disclosure of 
                        the fixed interest rates, deferments, flexible 
                        repayment options, loan forgiveness programs, 
                        and other protections;
                            ``(iii) the right of the borrower to choose 
                        a private educational lender of their choice;
                            ``(iv) the impact the private education 
                        loan for which the institution of higher 
                        education is submitting a private loan 
                        certification would have on the eligibility of 
                        the borrower for other financial assistance 
                        including Federal assistance under title IV of 
                        the Higher Education Act of 1965;
                            ``(v) the right of the borrower to accept 
                        or reject a private education loan within the 
                        30-day period following a private educational 
                        lender's approval of the borrower's application 
                        for a private education loan; and
                            ``(vi) the right of the borrower to cancel 
                        any private educational loan within 3 days of 
                        the consummation of such loan.'';
            (2) by redesignating paragraphs (9), (10), and (11) as 
        paragraphs (12), (13), and (14), respectively; and--
                    (A) by inserting after paragraph (8) the following:
            ``(9) Loan statements for borrowers.--
                    ``(A) In general.--A private educational lender 
                that consummates a private education loan with respect 
                to a student attending an institution of higher 
                education shall provide a loan statement to the 
                borrower not less than once every 3 months during the 
                period during which the student attends the institution 
                of higher education.
                    ``(B) Contents of loan statement.--Any loan 
                statement provided to a borrower pursuant to 
                subparagraph (A) shall--
                            ``(i) report the amount of the borrower's 
                        total remaining debt with the private 
                        educational lender, including any accrued but 
                        unpaid interest and capitalized interest; and
                            ``(ii) report the amount of any increase in 
                        the borrower's total debt with the private 
                        educational lender in the period following the 
                        most recent loan statement was provided to the 
                        borrower.
            ``(10) Notification of private educational loan.--Not later 
        than 3 days after a private educational lender consummates a 
        private education loan with respect to a student attending an 
        institution of higher education, such private educational 
        lender shall notify the institution of higher education the 
        student is to attend of the amount of the private education 
        loan the private educational lender has extended to such 
        student.
            ``(11) Annual report.--Each private educational lender 
        shall, each year, submit to the Bureau information about the 
        private education loans such private educational lender has 
        entered.''.
    (b) Definition of Private Education Loan.--Section 140(a)(8)(A) of 
the Truth in Lending Act (15 U.S.C. 1650(a)(8)(A)) is amended--
            (1) by redesignating clause (ii) as clause (iii);
            (2) in clause (i), by striking ``and'' after the semicolon; 
        and
            (3) by inserting after clause (i) the following:
                            ``(ii) is not made, insured, or guaranteed 
                        under title VII or title VIII of the Public 
                        Health Service Act (42 U.S.C. 292 et seq. and 
                        296 et seq.); and''.
    (c) Regulations.--Not later than 365 days after the date of 
enactment of this Act, the Director of the Bureau of Consumer Financial 
Protection shall issue rules in final form to implement paragraphs (3), 
(9), and (11) of section 128(e) of the Truth in Lending Act, as amended 
by this section. Such regulations shall become effective not later than 
6 months after their date of issuance.
    (d) Effective Date.--The amendments made by subsections (a) and (b) 
shall take effect 1 year after the date of the enactment of this 
section.
    (e) Report.--
            (1) In general.--Not later than 24 months after issuing 
        rules under subsection (c), the Director of the Bureau of 
        Consumer Financial Protection shall submit to the Congress a 
        report about the compliance of private educational lenders and 
        institutions of higher education with section 128(e) of the 
        Truth in Lending Act, as amended by this section.
            (2) Contents.--Any report submitted to Congress pursuant to 
        paragraph (1) shall include information about the degree to 
        which institutions of higher education, in making disclosures 
        to borrowers pursuant to section 128(e)(3)(F) of the Truth in 
        Lending Act, effectively encourage borrowers to exhaust Federal 
        assistance under title IV of the Higher Education Act of 1965 
        before entering a private educational loan.
                                 <all>