[Congressional Record Volume 164, Number 41 (Thursday, March 8, 2018)]
[Senate]
[Page S1594]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 2177. Mr. MENENDEZ submitted an amendment intended to be proposed 
by him to the bill S. 2155, to promote economic growth, provide 
tailored regulatory relief, and enhance consumer protections, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the appropriate place, insert the following:

     SEC. __. PROTECTIONS IN THE EVENT OF DEATH OR BANKRUPTCY.

       (a) In General.--Section 140 of the Truth in Lending Act 
     (15 U.S.C. 1650) is amended--
       (1) in subsection (a)--
       (A) by redesignating paragraphs (1) through (8) as 
     paragraphs (2) through (9), respectively; and
       (B) by inserting before paragraph (2), as so redesignated, 
     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 with respect to that 
     obligation, other than an obligation under a private 
     education loan extended to consolidate a consumer's pre-
     existing private education loans;
       ``(B) includes any person the signature of which is 
     requested as condition to grant credit or to forbear on 
     collection; and
       ``(C) does not include a spouse of an individual described 
     in subparagraph (A), the signature of whom is needed to 
     perfect the security interest in a loan.''; and
       (2) by adding at the end the following:
       ``(g) Additional Protections Relating to Borrower or 
     Cosigner of a Private Education Loan.--
       ``(1) Prohibition on automatic default in case of death or 
     bankruptcy of non-student obligor.--With respect to a private 
     education loan involving a student obligor and 1 or more 
     cosigners, the creditor shall not declare a default or 
     accelerate the debt against the student obligor on the sole 
     basis of a bankruptcy or death of a cosigner.
       ``(2) Cosigner release in case of death of borrower.--
       ``(A) Release of cosigner.--The holder of a private 
     education loan, when notified of the death of a student 
     obligor, shall release within a reasonable timeframe any 
     cosigner from the obligations of the cosigner under the 
     private education loan.
       ``(B) Notification of release.--A holder or servicer of a 
     private education loan, as applicable, shall within a 
     reasonable time-frame notify any cosigners for the private 
     education loan if a cosigner is released from the obligations 
     of the cosigner for the private education loan under this 
     paragraph.
       ``(C) Designation of individual to act on behalf of the 
     borrower.--Any lender that extends a private education loan 
     shall provide the student obligor an option to designate an 
     individual to have the legal authority to act on behalf of 
     the student obligor with respect to the private education 
     loan in the event of the death of the student obligor.''.
       (b) Applicability.--The amendments made by subsection (a) 
     shall only apply to private education loan agreements entered 
     into on or after the date that is 180 days after the date of 
     enactment of this Act.
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