Title: Christopher's Law
Policy area: Education

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:
Additionally, this bill amendsthe Higher Education Act of 1965 to expand the required elements of entrance counseling for a federal student loan borrower to include:
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.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2180 Introduced in Senate (IS)]

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115th CONGRESS
  1st Session
                                S. 2180

 To establish additional protections and disclosures for students and 
   co-signers with respect to student loans, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           November 30, 2017

Mr. Menendez (for himself, Ms. Warren, Mr. Booker, and Mrs. Gillibrand) 
introduced the following bill; which was read twice and referred to the 
          Committee on Health, Education, Labor, and Pensions

_______________________________________________________________________

                                 A BILL


 
 To establish additional protections and disclosures for students and 
   co-signers with respect to student loans, and for other purposes.

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

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) The Bureau of Consumer Financial Protection (referred 
        to in this section as the ``CFPB'') Student Loan Ombudsman 
        stated the following:
                    (A) ``The CFPB received more than 7,700 private 
                student loan complaints and approximately 2,300 debt 
                collection complaints related to student loans between 
                September 1, 2016, and August 31, 2017.''.
                    (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 2,500,000 individuals sustain a traumatic 
        brain injury each year and older adolescents between 15 and 19 
        years of age are more likely to sustain a traumatic brain 
        injury than individuals in other age groups.
            (3) It has been estimated that the annual incidence of 
        spinal cord injury, not including those individuals who die at 
        the scene of an accident, is approximately 54 cases per 
        1,000,000 individuals in the United States, or approximately 
        17,000 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 obligation of 
        borrower and co-signer.--In the case of any private educational 
        lender that provides a private education loan, the lender shall 
        clearly and conspicuously describe, in writing, the obligations 
        of a co-signer with respect to the loan, including the effect 
        that 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--
                            ``(i) the death, disability, or inability 
                        to engage in any substantial gainful activity 
                        of the co-signer; or
                            ``(ii) the bankruptcy of the 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--
                            ``(i) the death, disability, or inability 
                        to engage in any substantial gainful activity 
                        of the borrower; or
                            ``(ii) the 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, shall 
                        require the private educational lender with 
                        respect to, or servicer of, the private 
                        education loan, as applicable, to 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 paragraph; 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.--If a private 
                education loan has a co-signer, the private educational 
                lender with respect to, or servicer of, the private 
                education loan, as applicable, may not modify the 
                criteria under which the co-signer may be released from 
                the obligation of the co-signer under the private 
                education loan without the consent of the borrower and 
                the co-signer if the modification would be adverse to 
                the borrower.
                    ``(D) Notification on release.--A private 
                educational lender with respect to, or servicer of, a 
                private education loan, as applicable, shall promptly 
                notify the borrower and any co-signers for the private 
                education loan if a co-signer is released from the 
                obligations of the co-signer under the private 
                education loan under this paragraph.
                    ``(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 
                with respect to, 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 that 
        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 death, disability, 
        or inability to engage in any substantial gainful activity of 
        the borrower.
            ``(5) Counseling.--In the case of any private educational 
        lender that 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 the loan, including the information required 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 the obligation of a co-signer 
        for the 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 the 
                Higher Education Act of 1965 (20 U.S.C. 1087(a)) to the 
                fullest extent practicable, including safeguards to 
                prevent fraud and abuse.''.
    (b) Definitions.--Section 140(a) 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 so redesignated, 
        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 with 
                respect to that obligation;
                    ``(B) includes any person the signature of which is 
                requested as condition to grant credit or to forbear on 
                collection; and
                    ``(C) does not include a spouse of an individual 
                described in subparagraph (A), the signature of whom is 
                needed to perfect the security interest in a loan;''.
    (c) Rulemaking.--Not later than 1 year after the date of enactment 
of this Act, the Bureau of Consumer Financial Protection shall issue 
regulations to carry out subsection (g) of section 140 of the Truth in 
Lending Act (15 U.S.C. 1650), as added by paragraph (1).

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 regarding 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 the death, 
                disability, or inability to engage in any substantial 
                gainful activity of the borrower or co-signer.
                    ``(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 any amendment made by this Act, may 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 (20 U.S.C. 1087-51 et seq. and 20 
U.S.C. 1088 et seq.) based on a designation, or the lack of a 
designation, under section 484(a)(4)(B) of that Act (20 U.S.C. 
1091(a)(4)(B)), as added by section 3(b)(1).
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