Bereaved Borrowers' Bill of Rights Act of 2015

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. Short title This Act may be cited as the Bereaved Borrowers’ Bill of Rights Act of 2015 2. Requirements for private educational lenders Section 140 of the Truth in Lending Act ( 15 U.S.C. 1650 (g) Requirements regarding cosigners for a private education loan (1) Cosigner release requirements If a private education loan has a cosigner who is jointly liable for such loan, a private educational lender shall include a process for releasing the cosigner from any obligations on the loan and in such process the lender— (A) shall make the criteria for obtaining the release clear, transparent, and easily accessible via the website of the private educational lender; (B) shall notify the borrower if the borrower is eligible to release a cosigner; (C) shall, if denying a request to release a cosigner, provide an explanation for the denial and offer the borrower an opportunity to correct the request; and (D) may not change the terms of the release to impose additional duties on, or be detrimental to the interests of, the borrower or cosigner over the duration of the private education loan. (2) Additional requirements Notwithstanding any provision in a private education loan agreement that contains a process for releasing a cosigner from obligations on the loan, a private educational lender shall, upon receiving notification of the death or bankruptcy of a cosigner— (A) notify the borrower about the borrower’s rights under the private education loan agreement regarding the release of the cosigner; and (B) if the borrower continues to make on-time payments (in the amount determined prior to the death or bankruptcy of the cosigner) on the private education loan, provide a period of time of not less than 90 days for the borrower to follow the process for release of the cosigner before deeming that the borrower has failed to repay the loan, changing the terms of the loan, accelerating the repayment terms of the loan, referring the loan to a debt collector (as defined in section 803 of the Fair Debt Collection Practices Act ( 15 U.S.C. 1692a (3) Credit worthiness standards A private educational lender may not evaluate the credit worthiness, credit standing, or credit capacity of a borrower or a cosigner at the time at which a cosigner is released from obligations on a private education loan using a different standard than was used to evaluate the credit worthiness, credit standing, or credit capacity of the borrower or cosigner at the time of the origination of the loan. (4) Requirements for new cosigners Notwithstanding any provision in a private education loan agreement, a private educational lender shall, upon receiving notification of the death or bankruptcy of a cosigner who is jointly liable for the private education loan— (A) notify the borrower about the borrower’s rights under the private education loan agreement regarding identifying a new cosigner or refinancing the loan; and (B) if the borrower continues to make on-time payments (in the amount determined prior to the death or bankruptcy of the cosigner) on the private education loan, provide a period of time of not less than 90 days for a borrower to identify a new cosigner or refinance the loan before deeming that the borrower has failed to repay the loan, changing the terms of the loan, accelerating the repayment terms of the loan, referring the loan to a debt collector (as defined in section 803 of the Fair Debt Collection Practices Act ( 15 U.S.C. 1692a (5) New cosigner credit worthiness A private educational lender may not evaluate the credit worthiness, credit standing, or credit capacity of a new cosigner using a stricter standard than used to evaluate the credit worthiness, credit standing, or credit capacity of the original cosigner. . 3. Prohibitions for consumer reporting agencies and furnishers of information to consumer reporting agencies related to private education loans (a) Prohibition for consumer reporting agencies Subsection (a) of section 605 of the Fair Credit Reporting Act ( 15 U.S.C. 1681c(a) (7) Failure to repay a private education loan (as defined in section 140(a)) due to accelerated repayment terms of the loan after the death or bankruptcy of a cosigner who is jointly liable for the loan. . (b) Prohibition for furnishers of information to consumer reporting agencies Paragraph (1) of section 623(a) of such Act is amended by adding the following new subparagraph: (E) Reporting information on private education loans A private educational lender (as defined in section 140(a)) or the servicer of a private education loan (as defined in such section) shall not furnish any information relating to the loan to any consumer reporting agency if the consumer failed to repay the loan due to accelerated repayment terms after the death or bankruptcy of a cosigner who is jointly liable for the loan. .

Summary: Bereaved Borrowers' Bill of Rights Act of 2015 Amends the Truth in Lending Act to require a private educational lender to include in a private education loan for which the cosigner is jointly liable a process for releasing the cosigner from obligations on the loan. Requires a lender who receives notification of the death or bankruptcy of a cosigner who is jointly liable for the loan to notify the borrower about the borrower's rights under the loan agreement regarding: (1) release of the cosigner, and (2) identification of a new cosigner or refinancing of the loan. Amends the Fair Credit Reporting Act to prohibit: (1) consumer reporting agencies from containing in any consumer report default on a private education loan that results from accelerated repayment terms of the loan after the death or bankruptcy of a jointly liable cosigner, and (2) the lender or servicer of a private educational loan from furnishing loan information to a consumer reporting agency if the consumer defaulted on the loan due to accelerated repayment terms after the death or bankruptcy of such a cosigner.