Christopher's Law

Summary: Christopher Bryski Student Loan Protection Act or Christopher's Law This bill amends the Truth in Lending Act to require a private student loan lender to disclose clearly and conspicuously in writing a cosigner's obligations regarding a private student loan. The Consumer Financial Protection Bureau (CFPB) must publish a model form for such disclosure.  The bill prohibits a private student loan lender from taking an adverse action against a borrower (e.g., placing a loan in default or accelerating a loan balance) upon a cosigner's death, disability, or bankruptcy. It also prohibits adverse actions against a cosigner for a borrower's death, disability, or bankruptcy.   The CFPB must establish and a private student loan lender must disclose criteria for releasing a cosigner from a private student loan obligation. A private student loan lender must also:    provide prompt notice of a cosigner's release;  allow a borrower to designate a legal representative to make decisions upon the death or disability of such borrower; and   ensure a borrower and cosigner receive comprehensive counseling on the terms, conditions, and responsibilities of a private student loan.   Additionally, this bill amends title IV (Student Assistance) of the Higher Education Act of 1965 to expand the required elements of entrance counseling for a federal student loan borrower to include:   conditions for loan discharge upon the death or disability of a borrower, options for loan repayment and forgiveness upon the death or disability of a borrower or cosigner, and obligations of a borrower or cosigner upon the death or disability of a borrower.  It requires clear and conspicuous disclosure of a student's option to designate a legal representative to make decisions about a federal student loan upon such student's death or disability. 

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 3,100 private 
                student loan complaints and approximately 1,100 debt 
                collection complaints related to student loans between 
                October 1, 2014, and March 31, 2015.''.
                    (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.
            (5) According to the CFPB, private student loan companies 
        provide co-signer release to less than 1 percent of eligible 
        borrowers.

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 Borrower or Co-Signer of a 
Private Education Loan.--
            ``(1) Clear and conspicuous description of borrower's and 
        co-signer'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 co-signer'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 co-signer 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 co-signer for the 
        loan.
            ``(2) Prohibition on automatic default with respect to a 
        performing loan.--
                    ``(A) Death, disability, or bankruptcy of co-
                signer.--If a private education loan includes a co-
                signer, a private educational lender may not take any 
                adverse action (including declaring a default, 
                accelerating any loan obligation, increasing the 
                interest rate, or altering any obligations under the 
                private education loan in a way that is adverse to the 
                borrower) against the borrower based on the death, 
                disability, or inability to engage in any substantial 
                gainful activity or bankruptcy of a co-signer.
                    ``(B) Death, disability, or bankruptcy of 
                borrower.--If a private education loan includes a co-
                signer, a private educational lender may not take any 
                adverse action (including declaring a default, 
                accelerating any loan obligation, increasing the 
                interest rate, or altering any obligations under the 
                private education loan in a way that is adverse to any 
                co-signer) against the co-signer based on the death, 
                disability, or inability to engage in any substantial 
                gainful activity, or bankruptcy of the borrower.
            ``(3) Co-signer release.--
                    ``(A) Requirements for automatic release of co-
                signer.--
                            ``(i) Criteria established by the bureau.--
                        Not later than 180 days after the date of 
                        enactment of this subsection, the Bureau shall 
                        establish criteria, which if met by the 
                        borrower of a private education loan, the 
                        private educational lender or servicer of the 
                        private education loan shall promptly release 
                        any co-signer from the obligations of the co-
                        signer under the loan without requiring any 
                        action on behalf of the borrower.
                            ``(ii) Criteria established by lender.--A 
                        private educational lender may establish 
                        criteria for automatic release that are 
                        different from the criteria described in clause 
                        (i) if the criteria established by the lender 
                        are not more restrictive with respect to the 
                        borrower or any co-signer of the private 
                        education loan than the criteria established 
                        under clause (i).
                    ``(B) Disclosure of criteria for co-signer 
                release.--A private educational lender shall--
                            ``(i) include in the promissory note of a 
                        private education loan the criteria under which 
                        a co-signer may be released from the obligation 
                        of the co-signer under a private education loan 
                        under this subparagraph; and
                            ``(ii) disclose to the borrower and any co-
                        signer at the time the private education loan 
                        is consummated, clearly and conspicuously, the 
                        criteria under which a co-signer may be 
                        released from the obligation of the co-signer 
                        under a private education loan.
                    ``(C) Modifications to criteria.--The private 
                educational lender, or servicer of a private education 
                loan, as applicable, may not modify the criteria under 
                which a co-signer may be released from the obligation 
                of the co-signer under a private education loan if the 
                modification would be adverse to the borrower without 
                the consent of the borrower and applicable co-signer.
                    ``(D) Notification on release.--A private 
                educational lender, or servicer, as applicable, shall 
                promptly notify the borrower and any co-signers for a 
                private education loan if a co-signer is released from 
                the obligations of the co-signer under the private 
                education loan under this subparagraph.
                    ``(E) Modification of evaluation of 
                creditworthiness, credit standing, or credit 
                capacity.--In determining whether the criteria for a 
                co-signer release are met, a private educational lender 
                or servicer of a private education loan, as applicable, 
                may not evaluate the creditworthiness, credit standing, 
                or credit capacity of the borrower or a co-signer of 
                the private education loan using a standard that would 
                be more adverse to the borrower or co-signer, as 
                applicable, than the standard the private educational 
                lender used to evaluate the creditworthiness, credit 
                standing, or credit capacity of the borrower or co-
                signer on the date on which the private education loan 
                was consummated.
            ``(4) 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 provide the 
        borrower an option 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.
            ``(5) Counseling.--In the case of any private educational 
        lender who extends a private education loan, the lender shall 
        ensure that the borrower, and any co-signer, 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 
        subparagraphs (H), (I), (K), (L), (M), and (N) of section 
        485(l)(2) of the Higher Education Act of 1965 (20 U.S.C. 
        1092(l)(2)).
            ``(6) Model form.--The Bureau shall publish a model form 
        under section 105 for describing a co-signer's obligation for 
        purposes of paragraph (1).
            ``(7) 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 co-signer, 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 `co-signer'--
                    ``(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).
                    ``(M) Any repayment, refinance, deferment, 
                forbearance, or forgiveness opportunities available to 
                the borrower, or co-signer, 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 co-signer of the loan.''.
    (b) Designation of Individual To Act on Behalf of the Borrower.--
Section 484 of the Higher Education Act of 1965 (20 U.S.C. 1091) is 
amended--
            (1) in subsection (a), by striking paragraph (4) and 
        inserting the following:
            ``(4) file with the Secretary, as part of the original 
        financial aid application process, a certification, which need 
        not be notarized, but which--
                    ``(A) shall include--
                            ``(i) a statement of educational purpose 
                        stating that the money attributable to such 
                        grant, loan, or loan guarantee will be used 
                        solely for expenses related to attendance or 
                        continued attendance at such institution; and
                            ``(ii) such student's social security 
                        number; and
                    ``(B) may include 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;''; and
            (2) by adding at the end the following:
    ``(u) Option To Designate Individual To Act on Behalf of the 
Borrower in Clear and Conspicuous Manner.--The option for a student to 
make a designation described in subsection (a)(4)(B) shall be provided 
in a clear and conspicuous manner to the student.''.

SEC. 4. RULE OF CONSTRUCTION.

    Nothing in this Act, or an amendment made by this Act, shall be 
construed to adversely affect the eligibility of a student to receive 
any grant, loan, or work assistance under part C or part G of title IV 
of the Higher Education Act of 1965 (42 U.S.C. 2751 et seq. and 20 
U.S.C. 1088 et seq.) based on a designation, or lack thereof, under 
section 484(a)(4)(B) of that Act, as added by section 3(b) of this Act.