I 

114TH CONGRESS 

1ST SESSION H. R. 2542 

To amend the Truth in Lending Act to establish requirements for releasing 

a cosigner from obligations of a private education loan, for the treatment 

of the loan upon the death or bankruptcy of a cosigner of the loan, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 21, 2015 

Mr. LARSEN of Washington introduced the following bill; which was referred 

to the Committee on Financial Services 

A BILL 

To amend the Truth in Lending Act to establish requirements for releasing a cosigner from obligations of a 

private education loan, for the treatment of the loan 

upon the death or bankruptcy of a cosigner of the loan, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Bereaved Borrowers’ 

5 Bill of Rights Act of 2015’’. 


emcdonald on DSK67QTVN1PROD with BILLS
2 

•HR 2542 IH

1 SEC. 2. REQUIREMENTS FOR PRIVATE EDUCATIONAL 

2 LENDERS. 

3 Section 140 of the Truth in Lending Act (15 U.S.C. 

4 1650) is amended by adding at the end the following new 

5 subsection: 

6 ‘‘(g) REQUIREMENTS REGARDING COSIGNERS FOR A

7 PRIVATE EDUCATION LOAN.— 

8 ‘‘(1) COSIGNER RELEASE REQUIREMENTS.—If a 

9 private education loan has a cosigner who is jointly 

10 liable for such loan, a private educational lender 

11 shall include a process for releasing the cosigner 

12 from any obligations on the loan and in such process 

13 the lender— 

14 ‘‘(A) shall make the criteria for obtaining 

15 the release clear, transparent, and easily acces16 sible via the website of the private educational 

17 lender; 

18 ‘‘(B) shall notify the borrower if the bor19 rower is eligible to release a cosigner; 

20 ‘‘(C) shall, if denying a request to release 

21 a cosigner, provide an explanation for the denial 

22 and offer the borrower an opportunity to cor23 rect the request; and 

24 ‘‘(D) may not change the terms of the re25 lease to impose additional duties on, or be detri26 mental to the interests of, the borrower or coVerDate Sep 11 2014 06:16 May 28, 2015 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2542.IH H2542

emcdonald on DSK67QTVN1PROD with BILLS
3 

•HR 2542 IH

1 signer over the duration of the private edu2 cation loan. 

3 ‘‘(2) ADDITIONAL REQUIREMENTS.—Notwith4 standing any provision in a private education loan 

5 agreement that contains a process for releasing a co6 signer from obligations on the loan, a private edu7 cational lender shall, upon receiving notification of 

8 the death or bankruptcy of a cosigner— 

9 ‘‘(A) notify the borrower about the bor10 rower’s rights under the private education loan 

11 agreement regarding the release of the cosigner; 

12 and 

13 ‘‘(B) if the borrower continues to make on14 time payments (in the amount determined prior 

15 to the death or bankruptcy of the cosigner) on 

16 the private education loan, provide a period of 

17 time of not less than 90 days for the borrower 

18 to follow the process for release of the cosigner 

19 before deeming that the borrower has failed to 

20 repay the loan, changing the terms of the loan, 

21 accelerating the repayment terms of the loan, 

22 referring the loan to a debt collector (as defined 

23 in section 803 of the Fair Debt Collection Prac24 tices Act (15 U.S.C. 1692a)), or notifying conVerDate Sep 11 2014 06:16 May 28, 2015 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2542.IH H2542

emcdonald on DSK67QTVN1PROD with BILLS
4 

•HR 2542 IH

1 sumer reporting agencies (as defined in section 

2 603(f)) of a change in the status of the loan. 

3 ‘‘(3) CREDIT WORTHINESS STANDARDS.—A pri4 vate educational lender may not evaluate the credit 

5 worthiness, credit standing, or credit capacity of a 

6 borrower or a cosigner at the time at which a co7 signer is released from obligations on a private edu8 cation loan using a different standard than was used 

9 to evaluate the credit worthiness, credit standing, or 

10 credit capacity of the borrower or cosigner at the 

11 time of the origination of the loan. 

12 ‘‘(4) REQUIREMENTS FOR NEW COSIGNERS.— 

13 Notwithstanding any provision in a private education 

14 loan agreement, a private educational lender shall, 

15 upon receiving notification of the death or bank16 ruptcy of a cosigner who is jointly liable for the pri17 vate education loan— 

18 ‘‘(A) notify the borrower about the bor19 rower’s rights under the private education loan 

20 agreement regarding identifying a new cosigner 

21 or refinancing the loan; and 

22 ‘‘(B) if the borrower continues to make on23 time payments (in the amount determined prior 

24 to the death or bankruptcy of the cosigner) on 

25 the private education loan, provide a period of 


emcdonald on DSK67QTVN1PROD with BILLS
5 

•HR 2542 IH

1 time of not less than 90 days for a borrower to 

2 identify a new cosigner or refinance the loan be3 fore deeming that the borrower has failed to 

4 repay the loan, changing the terms of the loan, 

5 accelerating the repayment terms of the loan, 

6 referring the loan to a debt collector (as defined 

7 in section 803 of the Fair Debt Collection Prac8 tices Act (15 U.S.C. 1692a)), or notifying con9 sumer reporting agencies (as defined in section 

10 603(f)) of a change in the status of the loan. 

11 ‘‘(5) NEW COSIGNER CREDIT WORTHINESS.—A 

12 private educational lender may not evaluate the 

13 credit worthiness, credit standing, or credit capacity 

14 of a new cosigner using a stricter standard than 

15 used to evaluate the credit worthiness, credit stand16 ing, or credit capacity of the original cosigner.’’. 

17 SEC. 3. PROHIBITIONS FOR CONSUMER REPORTING AGEN18 CIES AND FURNISHERS OF INFORMATION TO 

19 CONSUMER REPORTING AGENCIES RELATED 

20 TO PRIVATE EDUCATION LOANS. 

21 (a) PROHIBITION FOR CONSUMER REPORTING AGEN22 CIES.—Subsection (a) of section 605 of the Fair Credit 

23 Reporting Act (15 U.S.C. 1681c(a)) is amended by adding 

24 at the end the following new paragraph: 


emcdonald on DSK67QTVN1PROD with BILLS
6 

•HR 2542 IH

1 ‘‘(7) Failure to repay a private education loan 

2 (as defined in section 140(a)) due to accelerated re3 payment terms of the loan after the death or bank4 ruptcy of a cosigner who is jointly liable for the 

5 loan.’’. 

6 (b) PROHIBITION FOR FURNISHERS OF INFORMA7 TION TO CONSUMER REPORTING AGENCIES.—Paragraph 

8 (1) of section 623(a) of such Act is amended by adding 

9 the following new subparagraph: 

10 ‘‘(E) REPORTING INFORMATION ON PRI11 VATE EDUCATION LOANS.—A private edu12 cational lender (as defined in section 140(a)) or 

13 the servicer of a private education loan (as de14 fined in such section) shall not furnish any in15 formation relating to the loan to any consumer 

16 reporting agency if the consumer failed to repay 

17 the loan due to accelerated repayment terms 

18 after the death or bankruptcy of a cosigner who 

19 is jointly liable for the loan.’’. 

Æ 


emcdonald on DSK67QTVN1PROD with BILLS