S.Amdt. 2070

SA 2070. Ms. WARREN submitted an amendment intended to be proposed by
her to the bill S. 2155, to promote economic growth, provide tailored
regulatory relief, and enhance consumer protections, and for other
purposes; which was ordered to lie on the table; as follows:

At the end of title III, add the following:

SEC. 308. IMPROVED CONSUMER PROTECTIONS FOR STUDENT LOAN
SERVICING.

(a) In General.--The Truth in Lending Act (15 U.S.C. 1601
et seq.) is amended by adding at the end the following new
chapter:

``CHAPTER 6--POSTSECONDARY EDUCATION LOANS

``Sec.
``188. Definitions.
``189. Servicing of postsecondary education loans.
``190. Payments and fees.
``191. Authority of Bureau.
``192. State laws unaffected; inconsistent Federal and State
provisions.

``Sec. 188. Definitions

``In this chapter:
``(1) Alternative repayment arrangement.--The term
`alternative repayment arrangement' means an agreed upon
arrangement between a loan holder (or, for a Federal Direct
Loan or a Federal Perkins Loan, the Secretary of Education or
the institution of higher education that made such loan,
respectively) or student loan servicer and a borrower--
``(A) that is different than the terms under an existing
postsecondary education loan; and
``(B) pursuant to which remittance of a monthly payment--
``(i) satisfies the terms of the postsecondary education
loan; or
``(ii) is not required for a period of 1 or more months in
order to satisfy the terms of the postsecondary education
loan.
``(2) Billing group.--The term `billing group' means a
postsecondary education loan account that--
``(A) is serviced by a student loan servicer; and
``(B) includes 2 or more postsecondary education loans that
are in repayment status.
``(3) Bureau.--The term `Bureau' means the Bureau of
Consumer Financial Protection.
``(4) Effective date of transfer.--The term `effective date
of transfer' means the date on which the first payment is due
to a transferee servicer from a borrower under a
postsecondary education loan.
``(5) Federal direct loan.--The term `Federal Direct Loan'
means a loan made under part D of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1087a et seq.).
``(6) Federal perkins loan.--The term `Federal Perkins
Loan' means a loan made under part E of title IV of the
Higher Education Act of 1965 (20 U.S.C. 1087aa et seq.).
``(7) Institution of higher education.--The term
`institution of higher education' has the meaning given that
term in section 102 of the Higher Education Act of 1965 (20
U.S.C. 1002).
``(8) Late fee.--The term `late fee' means a late fee,
penalty, or adjustment to principal, imposed because of a
late payment or delinquency by the borrower under a
postsecondary education loan.
``(9) Loan holder.--The term `loan holder' means a person
who owns the title to or promissory note for a postsecondary
education loan (except for a Federal Direct Loan or a Federal
Perkins Loan).
``(10) Open end credit plan.--The term `open end credit
plan' has the meaning given that term in section 103.
``(11) Postsecondary education expense.--The term
`postsecondary education expense' means any expense that is
included as part of the cost of attendance (as that term is
defined in section 472 of the Higher Education Act of 1965
(20 U.S.C. 1087ll)) of a student.
``(12) Postsecondary education lender.--The term
`postsecondary education lender'--
``(A) means --
``(i) a financial institution, as defined in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813) that
solicits, makes, or extends postsecondary education loans;
``(ii) a Federal credit union, as defined in section 101 of
the Federal Credit Union Act (12 U.S.C. 1752) that solicits,
makes, or extends postsecondary education loans; and
``(iii) any other person engaged in the business of
soliciting, making, or extending postsecondary education
loans; and
``(B) does not include--
``(i) the Secretary of Education; or
``(ii) an institution of higher education with respect to
any Federal Perkins Loan made by the institution.
``(13) Postsecondary education loan.--The term
`postsecondary education loan'--
``(A) means a loan that is--
``(i) made, insured, or guaranteed under part B, D, or E of
title IV of the Higher Education Act of 1965 (20 U.S.C. 1071
et seq., 1087a et seq., 1087aa et seq.); or
``(ii) issued or made by a postsecondary education lender
and is--

``(I) extended to a borrower with the expectation that the
amounts extended will be used in whole or in part to pay
postsecondary education expenses; or
``(II) extended for the purpose of refinancing or
consolidating 1 or more loans described in subclause (I) or
clause (i);

``(B) includes a private education loan; and
``(C) does not include a loan--

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``(i) made under an open-end credit plan; or
``(ii) that is secured by real property.
``(14) Private education loan.--The term `private education
loan' has the meaning given the term in section 140(a).
``(15) Qualified written request.--
``(A) In general.--Subject to subparagraph (B), the term
`qualified written request' means a written correspondence of
a borrower (other than notice on a payment medium supplied by
the student loan servicer) transmitted by mail, facsimile, or
electronically through an email address or website designated
by the student loan servicer to receive communications from
borrowers that--
``(i) includes, or otherwise enables the student loan
servicer to identify, the name and account of the borrower;
and
``(ii) includes, to the extent applicable--

``(I) sufficient detail regarding the information sought by
the borrower; or
``(II) a statement of the reasons for the belief of the
borrower that there is an error regarding the account of the
borrower.

``(B) Correspondence delivered to other addresses.--
``(i) In general.--A written correspondence of a borrower
is a qualified written request if the written
correspondence--

``(I) meets the requirements under clauses (i) and (ii) of
subparagraph (A); and
``(II) is transmitted to and received by a student loan
servicer at a mailing address, facsimile number, email
address, or website address other than the address or number
designated by that student loan servicer to receive
communications from borrowers.

``(ii) Duty to transfer.--A student loan servicer shall,
within a reasonable period of time, transfer a written
correspondence of a borrower received by the student loan
servicer at a mailing address, facsimile number, email
address, or website address other than the address or number
designated by that student loan servicer to receive
communications from borrowers to the correct address or
appropriate office or other unit of the student loan
servicer.
``(iii) Date of receipt.--A written correspondence of a
borrower transferred in accordance with clause (ii) shall be
deemed to be received by the student loan servicer on the
date on which the written correspondence is transferred to
the correct address or appropriate office or other unit of
the student loan servicer.
``(16) Student loan servicer.--The term `student loan
servicer'--
``(A) means a person who performs student loan servicing;
``(B) includes a person performing student loan servicing
for a postsecondary education loan on behalf of an
institution of higher education or the Secretary of Education
under a contract or other agreement;
``(C) does not include the Secretary of Education to the
extent the Secretary directly performs student loan servicing
for a postsecondary education loan; and
``(D) does not include an institution of higher education,
to the extent that the institution directly performs student
loan servicing for a Federal Perkins Loan made by the
institution.
``(17) Student loan servicing.--The term `student loan
servicing' includes any of the following activities:
``(A) Receiving any scheduled periodic payments from a
borrower under a postsecondary education loan (or
notification of such payments).
``(B) Applying payments described in subparagraph (A) to an
account of the borrower pursuant to the terms of the
postsecondary education loan or of the contract governing the
servicing of the postsecondary education loan.
``(C) During a period in which no payment is required on
the postsecondary education loan--
``(i) maintaining account records for the postsecondary
education loan; and
``(ii) communicating with the borrower on behalf of the
loan holder or, with respect to a Federal Direct Loan or
Federal Perkins Loan, the Secretary of Education or the
institution of higher education that made the loan,
respectively.
``(D) Interacting with a borrower to facilitate the
activities described in subparagraphs (A), (B), and (C),
including activities to help prevent default by the borrower
of the obligations arising from the postsecondary education
loan.
``(18) Transfer of servicing.--The term `transfer of
servicing' means the assignment, sale, or transfer of any
student loan servicing of a postsecondary education loan from
a transferor servicer to a transferee servicer.
``(19) Transferee servicer.--The term `transferee servicer'
means the person to whom any student loan servicing of a
postsecondary education loan is assigned, sold, or
transferred.
``(20) Transferor servicer.--The term `transferor servicer'
means the person who assigns, sells, or transfers any student
loan servicing of a postsecondary education loan to another
person.

``Sec. 189. Servicing of postsecondary education loans

``(a) Student Loan Servicer Requirements.--A student loan
servicer may not--
``(1) charge a fee for responding to a qualified written
request under this chapter;
``(2) fail to take timely action to respond to a qualified
written request from a borrower to correct an error relating
to an allocation of payment or the payoff amount of the
postsecondary education loan;
``(3) fail to take reasonable steps to avail the borrower
of all possible alternative repayment arrangements to avoid
default;
``(4) fail to perform the obligations required under title
IV of the Higher Education Act of 1965 (20 U.S.C. 1070 et
seq.);
``(5) fail to respond within 10 business days to a request
from a borrower to provide the name, address, and other
relevant contact information of the loan holder of the
borrower's postsecondary education loan or, for a Federal
Direct Loan or a Federal Perkins Loan, the Secretary of
Education or the institution of higher education who made the
loan, respectively;
``(6) fail to comply with any applicable requirement of the
Servicemembers Civil Relief Act (50 U.S.C. App. 501 et seq.);
``(7) fail to comply with any other obligation that the
Bureau, by regulation, has determined to be appropriate to
carry out the consumer protection purposes of this chapter;
or
``(8) fail to perform other standard servicer's duties.
``(b) Borrower Inquiries.--
``(1) Duty of student loan servicers to respond to borrower
inquiries.--
``(A) Notice of receipt of request.--If a borrower under a
postsecondary education loan submits a qualified written
request to the student loan servicer for information relating
to the student loan servicing of the postsecondary education
loan, the student loan servicer shall provide a written
response acknowledging receipt of the qualified written
request within 5 business days unless any action requested by
the borrower is taken within such period.
``(B) Action with respect to inquiry.--Not later than 30
business days after the receipt from any borrower of any
qualified written request under subparagraph (A) and, if
applicable, before taking any action with respect to the
qualified written request of the borrower, the student loan
servicer shall--
``(i) make appropriate corrections in the account of the
borrower, including the crediting of any late fees, and
transmit to the borrower a written notification of such
correction (which shall include the name and toll-free or
collect-call telephone number of a representative of the
student loan servicer who can provide assistance to the
borrower);
``(ii) after conducting an investigation, provide the
borrower with a written explanation or clarification that
includes--

``(I) to the extent applicable, a statement of the reasons
for which the student loan servicer believes the account of
the borrower is correct as determined by the student loan
servicer; and
``(II) the name and toll-free or collect-call telephone
number of an individual employed by, or the office or
department of, the student loan servicer who can provide
assistance to the borrower; or

``(iii) after conducting an investigation, provide the
borrower with a written explanation or clarification that
includes--

``(I) information requested by the borrower or an
explanation of why the information requested is unavailable
or cannot be obtained by the student loan servicer; and
``(II) the name and toll-free or collect-call telephone
number of an individual employed by, or the office or
department of, the student loan servicer who can provide
assistance to the borrower.

``(C) Limited extension of response time.--
``(i) In general.--There may be 1 extension of the 30-day
period described in subparagraph (B) of not more than 15 days
if, before the end of such 30-day period, the student loan
servicer notifies the borrower of the extension and the
reasons for the delay in responding.
``(ii) Reports to bureau.--Each student loan servicer
shall, on an annual basis, report to the Bureau the aggregate
number of extensions sought by the student loan servicer
under clause (i).
``(2) Protection of credit information.--During the 60-day
period beginning on the date on which a student loan servicer
receives a qualified written request from a borrower relating
to a dispute regarding payments by the borrower, a student
loan servicer may not provide negative credit information to
any consumer reporting agency (as defined in section 603 of
the Truth in Lending Act (15 U.S.C. 1681a)) relating to the
subject of the qualified written request or to such period,
including any information relating to a late payment or
payment owed by the borrower on the borrower's postsecondary
education loan.
``(3) High-touch student loan servicing.--A student loan
servicer shall designate an office or other unit of the
student loan servicer to act as a point of contact regarding
postsecondary education loans for borrowers considered to be
at risk of default, including--
``(A) any borrower who requests information related to
options to reduce or suspend his or her monthly payment, or
otherwise indicates that he or she is experiencing or is
about to experience financial hardship or distress;
``(B) any borrower who becomes 60 calendar days delinquent
on any loan;
``(C) any borrower who has not completed the program of
study for which the borrower received the loan;
``(D) any borrower who is enrolled in discretionary
forbearance for more than 9 months of the previous 12 months;
``(E) any borrower who has rehabilitated or consolidated
one or more student loans out of default within the prior 12
months;

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``(F) a borrower under a private education loan who is
seeking to modify the terms of the repayment of the
postsecondary education loan because of hardship; and
``(G) any borrower or segment of borrowers determined by
the Director of the Bureau to be at risk of default.
``(c) Liaison for Members of the Armed Forces and
Veterans.--
``(1) Definition.--In this subsection, the term `veteran'
has the meaning given that term in section 101 of title 38,
United States Code.
``(2) Designation.--A student loan servicer shall designate
1 or more employees to act as a liaison for members of the
Armed Forces, veterans, and spouses and dependents of a
member of the Armed Forces or a veteran, who shall be--
``(A) responsible for answering inquiries relating to
postsecondary education loans from members of the Armed
Forces, veterans, and spouses and dependents of a member of
the Armed Forces or a veteran; and
``(B) specially trained on the benefits available to
members of the Armed Forces and veterans under the
Servicemembers Civil Relief Act (50 U.S.C. App. 501 et seq.)
and other Federal and State laws relating to postsecondary
education loans.
``(3) Toll free number.--A student loan servicer shall
establish and maintain a toll-free telephone number that--
``(A) may be used by a member of the Armed Forces, veteran,
or spouse or dependent of a member of the Armed Forces or a
veteran to connect directly to the liaison designated under
paragraph (2); and
``(B) shall be listed on the primary Internet website of
the student loan servicer and on monthly billing statements.

``Sec. 190. Payments and fees

``(a) Prohibition on Recommending Default.--A loan holder
or student loan servicer may not recommend or encourage
default or delinquency on an existing postsecondary education
loan prior to and in connection with the process of
qualifying for or enrolling in an alternative repayment
arrangement, including the origination of a new postsecondary
education loan that refinances all or any portion of such
existing loan or debt.
``(b) Late Fees.--
``(1) In general.--A late fee may not be charged to a
borrower under a postsecondary education loan under any of
the following circumstances, either individually or in
combination:
``(A) On a per-loan basis when a borrower has multiple
postsecondary education loans in a billing group.
``(B) In an amount greater than 4 percent of the amount of
the payment past due.
``(C) Before the end of the 15-day period beginning on the
date the payment is due.
``(D) More than once with respect to a single late payment.
``(E) The borrower fails to make a singular, non successive
regularly-scheduled payment on the postsecondary education
loan.
``(2) Coordination with subsequent late fees.--No late fee
may be charged to a borrower under a postsecondary education
loan relating to an insufficient payment if the payment is
made on or before the due date of the payment, or within any
applicable grace period for the payment, if the insufficiency
is attributable only to a late fee relating to an earlier
payment, and the payment is otherwise a full payment for the
applicable period.
``(c) Payoff Statement.--
``(1) Fees.--
``(A) In general.--Except as provided in subparagraph (B)
or (D), a loan holder or student loan servicer may not charge
a fee for informing or transmitting to a borrower or a person
authorized by the borrower the balance due to pay off the
outstanding balance on a postsecondary education loan.
``(B) Transaction fee.--If a loan holder or student loan
servicer provides the information described in subparagraph
(A) by facsimile transmission or courier service, the loan
holder or student loan servicer may charge a processing fee
to cover the cost of such transmission or service in an
amount that is not more than a comparable fee imposed for
similar services provided in connection with consumer credit
transactions.
``(C) Fee disclosure.--A loan holder or student loan
servicer shall disclose to the borrower that payoff balances
are available for free pursuant to subparagraph (A) before
charging a transaction fee under subparagraph (B).
``(D) Multiple requests.--If a loan holder or student loan
servicer has provided the information described in
subparagraph (A) without charge, other than the transaction
fee permitted under subparagraph (B), on 4 or more occasions
during a calendar year, the loan holder or student loan
servicer may thereafter charge a reasonable fee for providing
such information during the remainder of the calendar year.
``(2) Prompt delivery.--A loan holder or a student loan
servicer that has received a request by a borrower or a
person authorized by a borrower for the information described
in paragraph (1)(A) shall provide such information to the
borrower or person authorized by the borrower not later than
5 business days after receiving such request.
``(d) Interest Rate and Term Changes for Certain
Postsecondary Education Loans.--
``(1) Notification requirements.--
``(A) In general.--Except as provided in paragraph (3), a
student loan servicer shall provide written notice to a
borrower of any material change in the terms of the
postsecondary education loan, including an increase in the
interest rate, not later than 45 days before the effective
date of the change or increase.
``(B) Material changes in terms.--The Bureau shall, by
regulation, establish guidelines for determining which
changes in terms are material under subparagraph (A).
``(2) Limits on interest rate and fee increases applicable
to outstanding balance.--Except as provided in paragraph (3),
a loan holder or student loan servicer may not increase the
interest rate or other fee applicable to an outstanding
balance on a postsecondary education loan.
``(3) Exceptions.--The requirements under paragraphs (1)
and (2) shall not apply to--
``(A) an increase in any applicable variable interest rate
incorporated in the terms of a postsecondary education loan
that provides for changes in the interest rate according to
operation of an index that is not under the control of the
loan holder or student loan servicer and is published for
viewing by the general public;
``(B) an increase in interest rate due to the completion of
a workout or temporary hardship arrangement by the borrower
or the failure of the borrower to comply with the terms of a
workout or temporary hardship arrangement if--
``(i) the interest rate applicable to a category of
transactions following any such increase does not exceed the
rate or fee that applied to that category of transactions
prior to commencement of the arrangement; and
``(ii) the loan holder or student loan servicer has
provided the borrower, prior to the commencement of such
arrangement, with clear and conspicuous disclosure of the
terms of the arrangement (including any increases due to such
completion or failure); and
``(C) an increase in interest rate due to a provision
included within the terms of a postsecondary education loan
that provides for a lower interest rate based on the
borrower's agreement to a prearranged plan that authorizes
recurring electronic funds transfers if--
``(i) the borrower withdraws the borrower's authorization
of the prearranged recurring electronic funds transfer plan;
and
``(ii) after withdrawal of the borrower's authorization and
prior to increasing the interest rate, the loan holder or
student loan servicer has provided the borrower with clear
and conspicuous disclosure of the impending change in
borrower's interest rate and a reasonable opportunity to
reauthorize the prearranged electronic funds transfers plan.
``(e) Prompt and Fair Crediting of Payments.--
``(1) Prompt crediting.--Payments received from a borrower
under a postsecondary education loan by the student loan
servicer shall be posted promptly to the account of the
borrower as specified in regulations of the Bureau. Such
regulations shall prevent a fee from being imposed on any
borrower if the student loan servicer has received the
borrower's payment in readily identifiable form, by 5:00 p.m.
on the date on which such payment is due, in the amount,
manner, and location specified by the student loan servicer.
``(2) Application of payments.--
``(A) In general.--
``(i) Treatments of prepayments.--A student loan servicer
that services a billing group of a borrower shall, upon
receipt of a payment from the borrower, apply amounts in
excess of the monthly payment amount first to the principal
of the postsecondary education loan bearing the highest
interest rate, and then to each successive principal balance
bearing the next highest interest rate until the payment is
exhausted, unless otherwise specified in writing by the
borrower.
``(ii) Treatment of underpayments.--

``(I) Regulations required.--Not later than 1 year after
the date of enactment of the Economic Growth, Regulatory
Relief, and Consumer Protection Act, the Bureau shall issue
regulations establishing the manner in which a student loan
servicer shall apply amounts less than the total payment due
during the billing cycle.
``(II) Considerations.--In issuing the regulations required
under subclause (I), the Bureau shall consider--

``(aa) the impact of the regulations on--
``(AA) outstanding debt of borrowers and the imposition of
late fees;
``(BB) credit ratings of borrowers; and
``(CC) continued availability of alternative repayment
arrangements; and
``(bb) any other factors the Bureau determines are
appropriate.
``(B) Changes by student loan servicer.--If a student loan
servicer makes a material change in the mailing address,
office, or procedures for handling borrower payments, and
such change causes a material delay in the crediting of a
payment made during the 60-day period following the date on
which such change took effect, the student loan servicer may
not impose any late fee for a late payment on the
postsecondary education loan to which such payment was
credited.
``(f) Additional Requirements for Prepayments.--
``(1) Advancement of date due.--A student loan servicer may
advance the date due of the next regularly scheduled
installment payment of a postsecondary education loan upon
remittance of a prepayment by the borrower, if--

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``(A) the borrower's payment is sufficient to satisfy at
least 1 additional installment payment;
``(B) the number of billing cycles for which the date due
is advanced is equal to total number of installment payments
satisfied by the prepayment; and
``(C) upon receipt by the student loan servicer, the
prepayment is applied--
``(i) to the principal balance of the postsecondary
education loan; or
``(ii) if the student loan servicer services a billing
group of a borrower, to the principal balance of the
postsecondary education loan with the highest interest rate
in such billing group.
``(2) Borrower rights.--A student loan servicer shall
provide a clear, understandable and transparent means,
including through submission of an online form, for the
borrower to elect to--
``(A) instruct the servicer not to advance the date due of
future installment payments as described in paragraph (1);
and
``(B) voluntarily make payments in excess of the borrower's
regularly scheduled installment payment amount on a periodic
basis via recurring electronic funds transfers or other
automatic payment arrangement.
``(g) Timing of Payments.--A student loan servicer may not
treat a payment on a postsecondary education loan as late for
any purpose unless the student loan servicer has adopted
reasonable procedures designed to ensure that each billing
statement required under subsection (j)(1) is mailed or
delivered to the consumer not later than 21 days before the
payment due date.
``(h) Other Requirements for Postsecondary Education
Loans.--
``(1) Statement required with each billing cycle.--A
student loan servicer for each borrower's account that is
being serviced by that student loan servicer and that
includes a postsecondary education loan shall transmit to the
borrower, for each billing cycle at the end of which there is
an outstanding balance in that account, a statement that
includes--
``(A) the outstanding balance in the account at the
beginning of the billing cycle;
``(B) the total amount credited to the account during the
billing cycle;
``(C) the amount of any fee added to the account during the
billing cycle, itemized to show the amounts, if any, due to
the application of an increased interest rate, and the
amount, if any, imposed as a minimum or fixed charge;
``(D) the balance on which the fee described in
subparagraph (C) was computed and a statement of how the
balance was determined;
``(E) whether the balance described in subparagraph (D) was
determined without first deducting all payments and other
credits during the billing cycle, and the amount of any such
payments and credits;
``(F) the outstanding balance in the account at the end of
the billing cycle;
``(G) the date by which, or the period within which,
payment must be made to avoid late fees, if any;
``(H) the address of the student loan servicer to which the
borrower may direct billing inquiries;
``(I) the amount of any payments or other credits during
the billing cycle that was applied to pay down principal, and
the amount applied to interest;
``(J) in the case of a billing group, the allocation of any
payments or other credits during the billing cycle to each of
the postsecondary education loans in the billing group;
``(K) information on how to file a complaint with the
Bureau and with the ombudsman designated pursuant to section
1035 of the Dodd-Frank Wall Street Reform and Consumer
Protection Act (12 U.S.C. 5535); and
``(L) any other information determined by the Bureau, which
may include information in the Bureau's Student Loan Payback
Playbook.
``(2) Payment deadlines and penalties.--
``(A) Disclosure of payment deadlines.--In the case of a
postsecondary education loan account under which a late fee
or charge may be imposed due to the failure of the borrower
to make payment on or before the due date for such payment,
the billing statement required under paragraph (1) with
respect to the account shall include, in a conspicuous
location on the billing statement, the date on which the
payment is due or, if different, the date on which a late fee
will be charged, together with the amount of the late fee to
be imposed if payment is made after that date.
``(B) Payments at local branches.--If the loan holder, in
the case of a postsecondary education loan account referred
to in subparagraph (A), is a financial institution that
maintains a branch or office at which payments on any such
account are accepted from the borrower in person, the date on
which the borrower makes a payment on the account at such
branch or office shall be considered to be the date on which
the payment is made for purposes of determining whether a
late fee may be imposed due to the failure of the borrower to
make payment on or before the due date for such payment.
``(i) Corrections and Unintentional Violations.--A loan
holder or student loan servicer who, when acting in good
faith, fails to comply with any requirement under this
section will to be deemed to have not violated such
requirement if the loan holder or student loan servicer
establishes that --
``(1) not later than 30 days after the date of execution of
the postsecondary education loan and prior to the institution
of any action under subtitle E of title X of the Dodd-Frank
Wall Street Reform and Consumer Protection Act (12 U.S.C.
5561 et seq.)--
``(A) the borrower is notified of or discovers the
compliance failure;
``(B) appropriate restitution to the borrower is made; and
``(C) necessary adjustments are made to the postsecondary
education loan that are necessary to bring the postsecondary
education loan into compliance with the requirements of this
section; or
``(2) not later than 60 days after the loan holder or
student loan servicer discovers or is notified of an
unintentional violation or bona fide error and prior to the
institution of any action under subtitle E of title X of the
Dodd-Frank Wall Street Reform and Consumer Protection Act (12
U.S.C. 5561 et seq.)--
``(A) the borrower is notified of the compliance failure;
``(B) appropriate restitution to the borrower is made; and
``(C) necessary adjustments are made to the postsecondary
education loan that are necessary to bring the postsecondary
education loan into compliance with the requirements of this
section.
``(j) Rule of Construction for Federal Postsecondary
Education Loans.--Nothing in this section shall be construed
to supercede any reporting or disclosure requirement required
for a postsecondary education loan that is made, issued, or
guaranteed under part B, D, or E of title IV of the Higher
Education Act of 1965 (20 U.S.C. 1070 et seq.), if such
reporting requirement does not directly conflict with the
requirements of this section.

``Sec. 191. Authority of Bureau

``(a) Authorization.--The Bureau is authorized to prescribe
such rules and regulations, make such interpretations, and
grant such reasonable exemptions, in accordance with, and as
may be necessary to achieve the purposes of, this chapter.
``(b) Disclosure Requirements.--
``(1) In general.--The Bureau shall issue regulations
requiring disclosures to borrowers that clearly and
conspicuously inform borrowers of the protections afforded to
them under this chapter and under other provisions relating
to postsecondary education loans. The Bureau shall consider
whether special disclosures are required to accommodate the
unique needs of borrowers who are members of the Armed Forces
or veterans.
``(2) Regulations required.--The regulations issued under
paragraph (1) shall--
``(A) ensure that a borrower is made aware of--
``(i) all repayment options available to the borrower,
including the availability of refinancing products, and the
effect of each repayment option on the total amount owed
under, total cost of, and time to repay the postsecondary
education loan;
``(ii) the risks and costs associated with default; and
``(iii) the eligibility of certain borrowers for discharge
of certain postsecondary education loans; and
``(B) require provision of information about how a borrower
can file a complaint with the Bureau relating to an alleged
violation of this chapter.
``(3) Timing of disclosures.--The regulations issued under
paragraph (1) shall specify the timing of the disclosures
described in paragraph (2)(A). Such timing may include--
``(A) before the first payment is due under the
postsecondary education loan; or
``(B) when the borrower--
``(i) first exhibits difficulty in making payments under
the postsecondary education loan;
``(ii) is 30 days delinquent under the postsecondary
education loan;
``(iii) is 60 days delinquent under the postsecondary
education loan;
``(iv) notifies the student loan servicer of the intent of
the borrower to forbear or defer payment under the
postsecondary education loan;
``(v) inquires about or requests the refinancing or
consolidation of the postsecondary education loan; or
``(vi) informs the student loan servicer, or a
postsecondary education lender acting on behalf of the
borrower informs the student loan servicer, that the borrower
will be refinancing or consolidating the loan.
``(c) Unfair, Deceptive, and Abusive Acts or Lending
Practices.--The Bureau, by regulation or order, shall
prohibit acts or practices in connection with--
``(1) a postsecondary education loan that the Bureau finds
to be unfair, deceptive, or designed to evade the provisions
of this chapter; or
``(2) the refinancing of a postsecondary education loan,
including facilitation of refinancing or enrollment in an
alternative repayment arrangement, that the Bureau finds to
be associated with abusive lending practices, or that are
otherwise not in the interest of the borrower.
``(d) Consultation With Secretary of Education.--In order
to avoid duplication, to the extent practicable, the Bureau,
in consultation with the Secretary of Education, may consider
obligations of student loan servicers under title IV of the
Higher Education Act of 1965 (20 U.S.C. 1070 et seq.).

``Sec. 192. State laws unaffected; inconsistent Federal and
State provisions

``Nothing in this chapter shall annul, alter, or affect, or
exempt any person subject to

[[Page S1398]]

the provisions of this chapter from complying with the laws
of any State with respect to student loan servicing
practices, fees on postsecondary education loans, or other
requirements relating to postsecondary education loans,
except to the extent that those laws are inconsistent with
any provision of this chapter, and then only to the extent of
the inconsistency. The Bureau is authorized to determine
whether such inconsistencies exist. The Bureau may not
determine that any State law is inconsistent with any
provision of this chapter if the Bureau determines that such
law gives greater protection to the consumer. In making these
determinations the Bureau shall consult with the appropriate
Federal agencies.''.
(b) Exempted Transactions.--Section 104 of the Truth in
Lending Act (15 U.S.C. 1603) is amended--
(1) in the matter preceding paragraph (1), by striking
``This title'' and inserting ``(a) In General.--This title'';
and
(2) by adding at the end the following:
``(b) Rule of Construction.--Nothing in subsection (a)
shall prevent or be construed to prevent the provisions of
chapter 6 from applying to any postsecondary education
lender, loan holder, or student loan servicer (as those terms
are defined in section 188).''.
(c) Civil Liability.--Section 130 of the Truth in Lending
Act (15 U.S.C. 1640) is amended--
(1) in subsection (a)--
(A) in the matter preceding paragraph (1), by inserting
``and any postsecondary education lender, loan holder, or
student loan servicer (as such terms are defined in section
188) who fails to comply with any requirement imposed under
chapter 6 with respect to any person'' before ``is liable to
such person'';
(B) in paragraph (2)--
(i) in subparagraph (A)--

(I) by striking ``; or (iv)'' and inserting ``, or (iv)'';
and
(II) by inserting ``, or (v) in the case of a postsecondary
education lender, loan holder, or student loan servicer (as
such terms are defined in section 188) who fails to comply
with any requirement imposed under chapter 6, not less than
$400 or greater than $4,000'' before the semicolon; and

(ii) in subparagraph (B), by inserting ``, postsecondary
education lender, loan holder, or student loan servicer''
after ``creditor'' each place it appears; and
(C) in the matter following paragraph (4)--
(i) in the first sentence--

(I) by inserting ``, postsecondary education lender, loan
holder, or student loan servicer'' after ``creditor'' each
place it appears; and
(II) by striking ``creditor's failure'' and inserting
``failure by the creditor, postsecondary education lender,
loan holder, or student loan servicer'';

(ii) in the fourth sentence, by inserting ``other than the
disclosures required under section 128(e)(12),'' after
``referred to in section 128,''; and
(iii) in the fifth sentence, by inserting ``, postsecondary
education lender, loan holder, or student loan servicer''
after ``creditor'';
(2) in subsection (c), by striking ``creditor or assignee''
each place it appears and inserting ``creditor, assignee,
postsecondary education lender, loan holder, or student loan
servicer'';
(3) in subsection (e)--
(A) in the second sentence, by inserting ``or chapter 6''
after ``section 129, 129B, or 129C''; and
(B) in the fourth sentence, by inserting ``or chapter 6''
after ``or 129H''; and
(4) in subsection (h)--
(A) by striking ``creditor or assignee'' and inserting
``creditor, assignee, postsecondary education lender, loan
holder, or student loan servicer''; and
(B) by striking ``creditor's or assignee's liability'' and
inserting ``liability of the creditor, assignee,
postsecondary education lender, loan holder, or student loan
servicer''.

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