[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[S. 2460 Introduced in Senate (IS)]
113th CONGRESS
2d Session
S. 2460
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
June 10, 2014
Mr. Menendez introduced the following bill; which was read twice and
referred to the Committee on Health, Education, Labor, and Pensions
_______________________________________________________________________
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.--Congress finds the following:
(1) According to the Bureau of Consumer Financial
Protection (hereafter referred to as the ``CFPB'') Student Loan
Ombudsman:
(A) ``The CFPB received more than 2,300 private
student loan complaints and more than 1,300 debt
collection complaints related to student loans between
October 1, 2013, and March 31, 2014.''.
(B) ``Co-signers complain that information about
discharge or alternative arrangements in the case of
death of the primary borrower is not readily available
and that decisions are made on a case-by-case basis,
giving co-signers little understanding of how the
process works, or if they will be successful.''.
(C) ``The complaints and input received by the CFPB
resemble many of the same issues experienced by
mortgage borrowers, such as improper application of
payments, untimeliness in error resolution, and
inability to contact appropriate personnel in times of
hardship.''.
(D) ``The difference between federal and private
student loans in periods of disability was not well-
understood.''.
(2) An estimated 1,700,000 people sustain a traumatic brain
injury each year, with older adolescents aged 15 to 19 years
old more likely to sustain a traumatic brain injury than other
age groups.
(3) It has been estimated that the annual incidence of
spinal cord injury, not including those who die at the scene of
an accident, is approximately 40 cases per 1,000,000 people in
the United States or approximately 12,000 new cases each year.
These injuries can lead to permanent disability or loss of
movement and can prohibit the victim from engaging in any
substantial gainful activity.
(4) According to the CFPB, more than 90 percent of new
private student loans are co-signed.
SEC. 2. ADDITIONAL STUDENT LOAN PROTECTIONS.
(a) In General.--Section 140 of the Truth in Lending Act (15 U.S.C.
1650) is amended by adding at the end the following:
``(g) Additional Protections Relating to Death or Disability of
Borrower or Cosigner of a Private Education Loan.--
``(1) Clear and conspicuous description of borrower's and
cosigner's obligation.--In the case of any private educational
lender who extends a private education loan, the lender shall
clearly and conspicuously describe, in writing, the cosigner's
obligations with respect to the loan, including the effect the
death, disability, or inability to engage in any substantial
gainful activity of the borrower or any cosigner would have on
any such obligation, in language that the Bureau determines
would give a reasonable person a reasonable understanding of
the obligation being assumed by becoming a cosigner for the
loan.
``(2) Designation of individual to act on behalf of the
borrower.--In the case of any private educational lender who
extends a private education loan, the lender shall require the
borrower to designate an individual to have the legal authority
to act on behalf of the borrower with respect to the private
education loan in the event of the borrower's death,
disability, or inability to engage in any substantial gainful
activity.
``(3) Counseling.--In the case of any private educational
lender who extends a private education loan, the lender shall
ensure that the borrower, and any cosigner, receives
comprehensive information on the terms and conditions of the
loan and of the responsibilities the borrower has with respect
to such loan, including the information described under section
485(l)(2) of the Higher Education Act of 1965 (20 U.S.C.
1092(l)(2)).
``(4) Model form.--The Bureau shall publish a model form
under section 105 for describing a cosigner's obligation for
purposes of paragraph (1).
``(5) Definition of death, disability, or inability to
engage in any substantial gainful activity.--For the purposes
of this subsection with respect to a borrower or cosigner, the
term `death, disability, or inability to engage in any
substantial gainful activity'--
``(A) means any condition described in section
437(a) of the Higher Education Act of 1965 (20 U.S.C.
1087(a)); and
``(B) shall be interpreted by the Bureau in such a
manner as to conform with the regulations prescribed by
the Secretary of Education under section 437(a) of such
Act (20 U.S.C. 1087(a)) to the fullest extent
practicable, including safeguards to prevent fraud and
abuse.''.
(b) 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) through (8) as
paragraphs (2) through (9), respectively; and
(2) by inserting before paragraph (2) (as redesignated by
paragraph (1)) the following:
``(1) the term `cosigner'--
``(A) means any individual who is liable for the
obligation of another without compensation, regardless
of how designated in the contract or instrument;
``(B) includes any person whose signature is
requested as condition to grant credit or to forbear on
collection; and
``(C) does not include a spouse of an individual
referred to in subparagraph (A) whose signature is
needed to perfect the security interest in the loan;''.
(c) Rulemaking.--Not later than the end of the 1-year period
following the date of the enactment of this Act, the Bureau of Consumer
Financial Protection shall issue regulations to carry out section
140(g) of the Truth in Lending Act.
SEC. 3. FEDERAL STUDENT LOANS.
(a) Counseling Information.--Section 485(l)(2) of the Higher
Education Act of 1965 (20 U.S.C. 1092(l)(2)) is amended by adding at
the end the following:
``(L) Information on the conditions required to
discharge the loan due to the death, disability, or
inability to engage in any substantial gainful activity
of the borrower in accordance with section 437(a), and
an explanation that, in the case of a private education
loan made through a private educational lender (as such
terms are defined in section 140 of the Truth in
Lending Act (15 U.S.C. 1650)), the borrower, the
borrower's estate, and any cosigner of such a private
education loan may be obligated to repay the full
amount of the loan, regardless of the death or
disability of the borrower or any other condition
described in section 437(a).
``(M) Any repayment, refinance, deferment,
forbearance, or forgiveness opportunities available to
the borrower, or cosigner, in the event of either
individual's death, disability, or inability to engage
in any substantial gainful activity.
``(N) The effect that the death, disability, or
inability to engage in any substantial gainful activity
of the borrower would have on the obligations of the
borrower and any cosigner of the loan.''.
(b) Designation of Individual To Act on Behalf of the Borrower.--
Section 484(a)(4) of the Higher Education Act of 1965 (20 U.S.C.
1091(a)(4)) is amended--
(1) in subparagraph (A), by striking ``and'' after the
semicolon;
(2) in subparagraph (B), by inserting ``and'' after the
semicolon; and
(3) by adding at the end the following new subparagraph:
``(C) a designation by such student of an
individual who shall have the legal authority to act on
behalf of the student with respect to any loan to the
student under this title in the event of the student's
death, disability, or inability to engage in any
substantial gainful activity;''.
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