I 

116TH CONGRESS 

1ST SESSION H. R. 3621 

To amend the Fair Credit Reporting Act to remove adverse information 

for certain defaulted or delinquent private education loan borrowers who 

demonstrate a history of loan repayment, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 5, 2019 

Ms. PRESSLEY introduced the following bill; which was referred to the 

Committee on Financial Services 

A BILL 

To amend the Fair Credit Reporting Act to remove adverse 

information for certain defaulted or delinquent private 

education loan borrowers who demonstrate a history of 

loan repayment, 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 ‘‘Student Borrower 

5 Credit Improvement Act’’. 

6 SEC. 2. FINDINGS. 

7 Congress finds the following: 


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1 (1) The October 2014 report of the Consumer 

2 Financial Protection Bureau titled ‘‘Annual Report 

3 of the CFPB Student Loan Ombudsman’’ noted 

4 many private education loan borrowers, who sought 

5 to negotiate a modified repayment plan when they 

6 were experiencing a period of financial distress, were 

7 unable to get assistance from their loan holders, 

8 which often resulting in them defaulting on their 

9 loans. This pattern resembles the difficulty that a 

10 significant number of mortgage loan borrowers expe11 rienced when they sought to take responsible steps 

12 to work with their mortgage loan servicer to avoid 

13 foreclosure during the Great Recession. 

14 (2) Although private student loan holders may 

15 allow a borrower to postpone payments while en16 rolled in school full-time, many limit this option to 

17 a certain time period, usually 48 to 66 months. This 

18 limited time period may not be sufficient for those 

19 who need additional time to obtain their degree or 

20 who want to continue their education by pursing a 

21 graduate or professional degree. The Consumer Bu22 reau found that borrowers who were unable to make 

23 payments often defaulted or had their accounts sent 

24 to collections before they were even able to graduate. 


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1 SEC. 3. REMOVES ADVERSE INFORMATION FOR CERTAIN 

2 DEFAULTED OR DELINQUENT PRIVATE EDU3 CATION LOAN BORROWERS WHO DEM4 ONSTRATE A HISTORY OF LOAN REPAYMENT. 

5 (a) IN GENERAL.—The Fair Credit Reporting Act 

6 (15 U.S.C. 1681 et seq.) is amended by inserting after 

7 section 605B the following new section: 

8 ‘‘§ 605C. Credit rehabilitation for distressed private 

9 education loan borrowers who dem10 onstrate a history of loan repayment 

11 ‘‘(a) IN GENERAL.—A consumer reporting agency 

12 may not furnish any consumer report containing any ad13 verse item of information relating to a delinquent or de14 faulted private education loan of a borrower if the bor15 rower has rehabilitated the borrower’s credit with respect 

16 to such loan by making 9 on-time monthly payments (in 

17 accordance with the terms and conditions of the bor18 rower’s original loan agreement or any other repayment 

19 agreement that antedates the original agreement) during 

20 a period of 10 consecutive months on such loan after the 

21 date on which the delinquency or default occurred. 

22 ‘‘(b) INTERRUPTION OF 10-MONTH PERIOD FOR

23 CERTAIN CONSUMERS FACING UNUSUAL EXTENUATING

24 LIFE EVENTS.— 

25 ‘‘(1) PERMISSIBLE INTERRUPTION OF THE 10- 

26 MONTH PERIOD.—A borrower may stop making conVerDate Sep 11 2014 02:19 Jul 10, 2019 Jkt 034408 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3621.IH H3621

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1 secutive monthly payments and be granted a grace 

2 period after which the 10-month period described in 

3 subsection (a) shall resume. Such grace period shall 

4 be provided under the following circumstances: 

5 ‘‘(A) With respect to a borrower who is a 

6 member of the Armed Forces entitled to incen7 tive pay for the performance of hazardous duty 

8 under section 301 of title 37, United States 

9 Code, hazardous duty pay under section 351 of 

10 such title, or other assignment or special duty 

11 pay under section 352 of such title, the grace 

12 period shall begin on the date on which the bor13 rower begins such assignment or duty and end 

14 on the date that is 6 months after the comple15 tion of such assignment or duty. 

16 ‘‘(B) With respect to a borrower who re17 sides in an area affected by a major disaster or 

18 emergency declared under the Robert T. Staf19 ford Disaster Relief and Emergency Assistance 

20 Act (42 U.S.C. 5121 et seq.), the grace period 

21 shall begin on the date on which the major dis22 aster or emergency was declared and end on the 

23 date that is 3 months after such date. 

24 ‘‘(2) OTHER CIRCUMSTANCES.— 


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1 ‘‘(A) IN GENERAL.—The Bureau may 

2 allow a borrower demonstrating hardship to 

3 stop making consecutive monthly payments and 

4 be granted a grace period after which the 10- 

5 month period described in subsection (a) shall 

6 resume. 

7 ‘‘(B) BORROWER DEMONSTRATING HARD8 SHIP DEFINED.—In this paragraph, the term 

9 ‘borrower demonstrating hardship’ means a 

10 borrower or a class of borrowers who, as deter11 mined by the Bureau, is facing or has experi12 enced unusual extenuating life circumstances or 

13 events that result in severe financial or personal 

14 barriers such that the borrower or class or bor15 rowers does not have the capacity to comply 

16 with the requirements of subsection (a). 

17 ‘‘(c) PROCEDURES.—The Bureau shall establish pro18 cedures to implement the credit rehabilitation described 

19 in this section, including— 

20 ‘‘(1) the manner, content, and form for request21 ing credit rehabilitation; 

22 ‘‘(2) the method for validating that the bor23 rower is satisfying the requirements of subsection 

24 (a); 


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1 ‘‘(3) the manner, content, and form for noti2 fying the private educational loan holder of— 

3 ‘‘(A) the borrower’s participation in credit 

4 rehabilitation under subsection (a); 

5 ‘‘(B) the requirements of subsection (d); 

6 and 

7 ‘‘(C) the restrictions of subsection (f); 

8 ‘‘(4) the manner, content, and form for noti9 fying a consumer reporting agency of— 

10 ‘‘(A) the borrower’s participation in credit 

11 rehabilitation under subsection (a); and 

12 ‘‘(B) the requirements of subsection (d); 

13 ‘‘(5) the method for verifying whether a bor14 rower qualifies for the grace period described in sub15 section (b); 

16 ‘‘(6) the manner, content, and form of notifying 

17 a consumer reporting agency and private educational 

18 loan holder that a borrower was granted a grace pe19 riod; and 

20 ‘‘(7) the method for a borrower to demonstrate 

21 that the borrower has successfully satisfied the re22 quirements under subsection (a) and for notifying a 

23 consumer reporting agency and private educational 

24 loan holder. 


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1 ‘‘(d) STANDARDIZED REPORTING CODES.—A con2 sumer reporting agency shall develop standardized report3 ing codes for use by any private educational loan holder 

4 to identify and report a borrower’s status of making and 

5 completing 9 on-time monthly payments during a period 

6 of 10 consecutive months on a delinquent or defaulted pri7 vate education loan, including codes specifying the grace 

8 period described in subsection (b) and any agreement to 

9 modify monthly payments. Such codes shall not appear on 

10 any report provided to a third party, and shall be removed 

11 from the consumer’s credit report upon the consumer’s 

12 completion of the rehabilitation period under this section. 

13 ‘‘(e) ELIMINATING BARRIERS TO CREDIT REHABILI14 TATION.—A consumer report in which a private edu15 cational loan holder furnishes the standardized reporting 

16 codes described in subsection (d) to a consumer reporting 

17 agency, or in which a consumer reporting agency includes 

18 such codes, shall be deemed to comply with the require19 ments for accuracy and completeness required under sec20 tions 623(a)(1) and 630. 

21 ‘‘(f) PROHIBITION ON CIVIL ACTIONS FOR CON22 SUMERS PURSUING REHABILITATION.—A private edu23 cational loan holder may not commence or proceed with 

24 any civil action against a borrower with respect to a delinVerDate Sep 11 2014 02:19 Jul 10, 2019 Jkt 034408 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3621.IH H3621

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1 quent or defaulted loan during the period of rehabilitation 

2 if the loan holder has been notified— 

3 ‘‘(1) under subsection (c)(3) of a borrower’s in4 tent to participate in rehabilitation; 

5 ‘‘(2) under subsection (c)(6) that a borrower 

6 was granted the grace period; or 

7 ‘‘(3) under subsection (c)(7) that the borrower 

8 has successfully satisfied the requirements under 

9 subsection (a). 

10 ‘‘(g) REHABILITATION DOES NOT AFFECT STATUTE

11 OF LIMITATIONS FOR PRIOR DEBT.—Payments by a bor12 rower on a private education loan that are made during 

13 and after a period of rehabilitation under this section shall 

14 have no effect on the statute of limitations with respect 

15 to payments that were due on such private education loan 

16 before the beginning of the period of rehabilitation. 

17 ‘‘(h) REQUIREMENT FOR PAYMENT PLANS.—If a pri18 vate educational loan holder enters into a payment plan 

19 with a borrower on a private education loan during a pe20 riod of rehabilitation, such payment plan shall be reason21 able and affordable, as determined by the Bureau. 

22 ‘‘(i) RULES OF CONSTRUCTION.— 

23 ‘‘(1) APPLICATION TO SUBSEQUENT DEFAULT

24 OR DELINQUENCY.—A borrower who satisfies the re25 quirements under subsection (a) shall be eligible for 


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1 additional credit rehabilitation described in sub2 section (a) with respect to any subsequent default or 

3 delinquency of the borrower on the rehabilitated pri4 vate education loan. 

5 ‘‘(2) INTERRUPTION OF THE CONSECUTIVE

6 PAYMENT PERIOD REQUIREMENT.—The grace period 

7 described in subsection (b)(1)(A) shall not apply if 

8 any regulation promulgated under section 987 of 

9 title 10, United States Code (commonly known as 

10 the Military Lending Act), or the Servicemembers 

11 Civil Relief Act (50 U.S.C. App. 501 et seq.) allows 

12 for a grace period or other interruption of the 10- 

13 month period described in subsection (a) and such 

14 grace period or other interruption is longer than the 

15 period described in subsection (b)(1)(A) or otherwise 

16 provides greater protection or benefit to the bor17 rower who is a member of the Armed Forces.’’. 

18 (b) CONFORMING AMENDMENT.—Section 623(a)(1) 

19 of the Fair Credit Reporting Act (15 U.S.C. 1681s– 

20 2(a)(1)) is amended by striking subparagraph (E). 

21 (c) TABLE OF CONTENTS AMENDMENT.—The table 

22 of contents of the Fair Credit Reporting Act is amended 

23 by inserting after the item relating to section 605B the 

24 following new item: 

‘‘605C. Credit rehabilitation for distressed private education loan borrowers who 

demonstrate a history of loan repayment.’’. 


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1 SEC. 4. PRIVATE EDUCATION LOAN DEFINITIONS. 

2 Section 603 of the Fair Credit Reporting Act (15 

3 U.S.C. 1681a) is amended by adding at the end the fol4 lowing new subsection: 

5 ‘‘(bb) PRIVATE EDUCATION LOAN DEFINITIONS.— 

6 The terms ‘private education loan’ and ‘private edu7 cational lender’ have the meanings given such terms, re8 spectively, in section 140(a) of the Truth in Lending 

9 Act.’’. 

10 SEC. 5. GENERAL BUREAU RULEMAKING. 

11 Except as otherwise provided, not later than the end 

12 of the 2-year period beginning on the date of the enact13 ment of this Act, the Bureau of Consumer Financial Pro14 tection shall issue final rules to implement the amend15 ments made by this Act. 

Æ 


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