Sec. 2. Truth in Lending Act amendments
2,690 words·~12 min read·
/bill/113/s/1803/is/section-2A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
The Truth in Lending Act ( 15 U.S.C. 1601 et seq. ) is amended— in section 128 ( 15 U.S.C. 1638 )— in subsection (e)— in paragraph (1)(O), by striking paragraph
(6)and inserting paragraph
(9); in paragraph (2)(L), by striking paragraph
(6)and inserting paragraph
(9); in paragraph (4)(C), by striking paragraph
(7)and inserting paragraph
(10); by redesignating paragraphs
(5)through
(11)as paragraphs
(8)through (14), respectively; by inserting after paragraph
(4)the following: Not fewer than 30 days and not more than 150 days before the first fully amortized payment on a private education loan is due from the borrower, the private educational lender shall disclose to the borrower, clearly and conspicuously— the information described in— paragraph (2)(A) (adjusted, as necessary, for the rate of interest in effect on the date the first fully amortized payment on a private education loan is due); subparagraphs
(B)through
(G)of paragraph (2); paragraph (2)(H) (adjusted, as necessary, for the rate of interest in effect on the date the first fully amortized payment on a private education loan is due); paragraph (2)(K); and subparagraphs
(O)and
(P)of paragraph (2); the scheduled date upon which the first fully amortized payment is due; the name of the lender and servicer, and the address to which communications and payments should be sent including a telephone number and website where the borrower may obtain additional information; a description of alternative repayment plans, including loan consolidation or refinancing, and 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 private education loans; and a statement that a Servicemember and Veterans Liaison designated under paragraph (15)(F) is available to answer inquiries about servicemember and veteran benefits related to private education loans, including the toll-free telephone number to contact the Liaison pursuant to paragraph (15)(F). Not fewer than 5 days after a borrower becomes 30 days delinquent on a private education loan, the private educational lender shall disclose to the borrower, clearly and conspicuously— the date on which the loan will be charged-off (as defined in paragraph (15)(A)) or assigned to collections, including the consequences of such charge-off or assignment to collections, if no payment is made; the minimum payment that the borrower must make to avoid the loan being charged off (as defined in paragraph (15)(A)) or assigned to collection, and the minimum payment that the borrower must make to bring the loan current; a statement informing the borrower that a payment of less than the minimum payment described in subparagraph
(B)could result in the loan being charged off (as defined in paragraph (15)(A)) or assigned to collection; and a statement that a Servicemember and Veterans Liaison designated under paragraph (15)(F) is available to answer inquiries about servicemember and veteran benefits related to private education loans, including the toll-free telephone number to contact the Liaison pursuant to paragraph (15)(F). Not fewer than 5 days after a borrower notifies a private educational lender that the borrower is having difficulty making payment or a borrower becomes 60 days delinquent on a private education loan, the private educational lender shall— complete a full review of the borrower’s private education loan and make a reasonable effort to obtain the information necessary to determine— if the borrower is eligible for an alternative repayment plan, including loan consolidation or refinancing; and 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 private education loans; provide the borrower, in writing, in simple and understandable terms, information about alternative repayment plans and benefits for which the borrower is eligible, including all terms, conditions, and fees or costs associated with such repayment plan, pursuant to paragraph (8)(D); allow the borrower not less than 30 days to apply for an alternative repayment plan or benefits, if eligible; and notify the borrower that a Servicemember and Veterans Liaison designated under paragraph (15)(F) is available to answer inquiries about servicemember and veteran benefits related to private education loans, including the toll-free telephone number to contact the Liaison pursuant to paragraph (15)(F). If a borrower notifies the private educational lender that a long-term alternative repayment plan is not needed, the private educational lender may comply with this paragraph by providing the borrower, in writing, in simple and understandable terms, information about forbearance or deferment options, including all terms, conditions, and fees or costs associated with such options pursuant to paragraph (8)(D). Each private educational lender shall establish a process, in accordance subparagraph (A), for a borrower to notify the lender that— the borrower is having difficulty making payments on a private education loan; and a long-term alternative repayment plan is not needed. The Director of the Consumer Financial Protection Bureau, in consultation with the Secretary of Education, shall promulgate rules establishing minimum standards for private educational lenders in carrying out the requirements of this paragraph and a model form for borrowers to notify private educational lenders of the information under this paragraph. ; in paragraph (8), as redesignated by clause (iv), by adding at the end the following: Not later than 2 years after the date of enactment of the Student Loan Borrower Bill of Rights , the Director of the Consumer Financial Protection Bureau, in consultation with the Secretary of Education, shall develop and issue model forms to allow borrowers to compare alternative repayment plans, forbearance, and deferment options with the borrower’s existing repayment plan with respect to a private education loan. Such forms shall include the following: The total amount to be paid over the life of the loan. The total amount in interest to be paid over the life of the loan. The monthly payment amount. The expected pay-off date. Related fees and costs. Eligibility requirements, and how the borrower can apply for the alternative repayment plan, forbearance, or deferment option. Any consequences, including the loss of eligibility for alternative repayment plans, forbearance, or deferment options. ; in paragraph (11), as redesignated by clause (iv), by striking paragraph
(7)and inserting paragraph
(10); in paragraph (14), as redesignated by clause (iv), by striking paragraph
(5)and inserting paragraph
(8); and by adding at the end the following: In this paragraph: The term borrower means the person to whom a private education loan is extended. The term charge off means charge to profit and loss, or subject to any similar action. The term private education loan has the meaning given the term in section 140(a). The term servicer means the person responsible for the servicing of a private education loan, including any agent of such person or the person who makes, owns, or holds a loan if such person also services the loan. The term servicing means— receiving any scheduled periodic payments from a borrower pursuant to the terms of a private education loan; making the payments of principal and interest and such other payments with respect to the amounts received from the borrower, as may be required pursuant to the terms of the loan; and performing other administrative services with respect to the loan. If the sale, other transfer, or assignment of a private 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— the transferor shall— 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— the sale or other transfer; the identity of the transferee; the name and address of the party to whom subsequent payments or communications must be sent; the telephone numbers and websites of both the transferor and the transferee; the effective date of the sale, transfer, or assignment; the date on which the transferor servicer will stop accepting payment; and the date on which the transferee servicer will begin accepting payment; and forward any payment from a borrower with respect to such private education loan to the transferee servicer, immediately upon receiving such payment, during the 60-day period beginning on the date on which the transferor servicer stops accepting payment of such private education loan; and the transferee shall— 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— the sale or other transfer; the identity of the transferee; the name and address of the party to whom subsequent payments or communications must be sent; the telephone numbers and websites of both the transferor and the transferee; the effective date of the sale, transfer, or assignment; the date on which the transferor will stop accepting payment; and the date on which the transferee will begin accepting payment; accept as on-time and may not impose any late fee or finance charge for any payment from a borrower with respect to such private education loan that is forwarded from the transferor servicer during the 60-day period beginning on the date on which the transferor servicer stops accepting payment, if the transferor servicer receives such payment on or before the applicable due date, including any grace period; provide borrowers a simple, online process for transferring existing electronic fund transfer authority; and honor any promotion or benefit offered to the borrower or advertised by the previous owner or transferor servicer of such private education loan. If a servicer makes a change in the mailing address, office, or procedures for handling payments with respect to any private education loan, and such change causes a delay in the crediting of the account of the borrower made during the 60-day period following the date on which such change took effect, the servicer may not impose any late fee or finance charge for a late payment on such private education loan. Unless otherwise directed by the borrower, upon receipt of a payment, the servicer shall apply amounts first to the interest and fees owed on the payment due date, and then to the principal balance of the private education loan bearing the highest annual percentage rate, and then to each successive interest and fees and then principal balance bearing the next highest annual percentage rate, until the payment is exhausted. A borrower may instruct or expressly authorize the servicer to apply payments in a different manner. Unless otherwise directed by the borrower, upon receipt of a payment, the servicer shall apply amounts in excess of the minimum payment amount first to the interest and fees owed on the payment due date, and then to the principal balance of the private education loan balance bearing the highest annual percentage rate, and then to each successive interest and fees and principal balance bearing the next highest annual percentage rate, until the payment is exhausted. A borrower may instruct or expressly authorize the servicer to apply such excess payments in a different manner. Unless otherwise directed by the borrower, a servicer shall apply payments to a borrower’s account on the date the payment is received. The Director of the Consumer Financial Protection Bureau, in consultation with the Secretary of Education, may promulgate rules for the application of payments that— minimizes the amount of fees and interest incurred by the borrower and the total loan amount paid by the borrower; minimizes delinquencies, assignments to collection, and charge-offs; requires servicers to apply payments on the date received; and allows the borrower to instruct the servicer to apply payments in a manner preferred by the borrower. If a borrower successfully and voluntarily makes 9 payments within 20 days of the due date during 10 consecutive months of amounts owed on a private education loan, or otherwise brings a private education loan current after the loan is charged-off, the loan shall be considered rehabilitated, and the lender or servicer shall request that any consumer reporting agency to which the charge-off was reported remove the delinquency that led to the charge-off and the charge-off from the borrower’s credit history. Each servicer 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 (50 U.S.C. App. 501 et seq.) and other Federal or State laws related to private education loans. Each servicer shall maintain a toll-free telephone number that shall— connect directly to the servicemember and veterans liaison designated under clause (i); and be made available on the primary internet website of the servicer and on monthly billing statements. A lender or servicer may not charge off or report a private education loan as delinquent, assigned to collection (internally or by referral to a third party), 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). A servicer shall make available through a secure website, or in writing upon request, the loan history of each borrower for each private education loan, separately designating— payment history; loan history, including any forbearances, deferrals, delinquencies, assignment to collection, and charge offs; annual percentage rate history; and 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. A servicer shall make available to the borrower, if requested, at no charge, copies of the original loan documents and the promissory note for each private education loan. The Director of the Consumer Financial Protection Bureau, in consultation with the Secretary of Education, shall promulgate rules requiring servicers to establish error resolution procedures to allow borrowers to inquire about errors related to their private education loans and obtain timely resolution of such errors. The Director of the Consumer Financial Protection Bureau, in consultation with the Secretary of Education, may establish additional servicing standards to reduce delinquencies, assignment to collections, and charge-offs, and to ensure borrowers understand their rights and obligations related to their private education loans. Any rights and remedies available to borrowers against servicers may not be waived by any agreement, policy, or form, including by a predispute arbitration agreement. No predispute arbitration agreement shall be valid or enforceable by a servicer, including as a third-party beneficiary or by estoppel, if the agreement requires arbitration of a dispute with respect to a private education loan. This subparagraph applies to predispute arbitration agreements entered into before the date of enactment of the Student Loan Borrower Bill of Rights , as well as on and after such date of enactment, if the violation that is the subject of the dispute occurred on or after such date of enactment. The provisions of this paragraph shall be enforced by the agencies specified in subsections
(a)through
(d)of section 108, in the manner set forth in that section or under any other applicable authorities available to such agencies by law. Nothing in this paragraph may be construed to preempt any provision of State law regarding private education loans where the State law provides stronger consumer protections. A servicer 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 servicer shall be subject to the applicable liability provisions under such section. ; and by adding at the end the following: The information required to be disclosed under this section shall be made available at no charge to the borrower. ; and in section 130(a)— in paragraph (3), by striking 128(e)(7) and inserting 128(e)(10) ; and in the flush matter at the end, by striking or paragraph (4)(C), (6), (7), or
(8)of section 128(e), and inserting or paragraph (4)(C), (9), (10), or
(11)of section 128(e), .
Connectionstraces to 2
Traces to 2 documents
Citation graph
cites case law
Cites 2Cited by 0 across 0 sources