S.Amdt. 2125

SA 2125. Mr. REED submitted an amendment intended to be proposed by
him 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 appropriate place, insert the following:

SEC. __. PROTECTING STUDENT LOAN BORROWERS.

(a) 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
section 128(g) from applying to any postsecondary education
lender, loan holder, or student loan servicer (as those terms
are defined in section 128(g)(3)).''.
(b) Terms and Disclosures for Private Education Loans and
Postsecondary Education Loans.--
(1) In general.--Section 128 of the Truth in Lending Act
(15 U.S.C. 1638) is amended--
(A) in subsection (e)--
(i) in paragraph (1)--

(I) by striking subparagraph (D) and inserting the
following:

``(D) requirements for a co-borrower, including--

[[Page S1490]]

``(i) any changes in the applicable interest rates without
a co-borrower; and
``(ii) any conditions the borrower is required meet in
order to release a co-borrower from the private education
loan obligation;'';

(II) by redesignating subparagraphs (O), (P), (Q), and (R)
as subparagraphs (P), (Q), (R), and (S), respectively; and
(III) by inserting after subparagraph (N) the following:

``(O) in the case of a refinancing of education loans that
include a Federal student loan made, insured, or guaranteed
under title IV of the Higher Education Act of 1965 (20 U.S.C.
1070 et seq.)--
``(i) a list containing each loan to be refinanced, which
shall identify whether the loan is a private education loan
or a Federal student loan made, insured, or guaranteed under
title IV of the Higher Education Act of 1965 (20 U.S.C. 1070
et seq.); and
``(ii) benefits that the borrower may be forfeiting,
including income-driven repayment options, opportunities for
loan forgiveness, forbearance or deferment options, interest
subsidies, and tax benefits;'';
(ii) in paragraph (2)--

(I) by redesignating subparagraphs (O) and (P) as
subparagraphs (P) and (Q), respectively; and
(II) by inserting after subparagraph (N) the following:

``(O) in the case of a refinancing of education loans that
include a Federal student loan made, insured, or guaranteed
under title IV of the Higher Education Act of 1965 (20 U.S.C.
1070 et seq.)--
``(i) a list containing each loan to be refinanced, which
shall identify whether the loan is a private education loan
or a Federal student loan made, insured, or guaranteed under
title IV of the Higher Education Act of 1965 (20 U.S.C. 1070
et seq.); and
``(ii) benefits that the borrower may be forfeiting,
including income-driven repayment options, opportunities for
loan forgiveness, forbearance or deferment options, interest
subsidies, and tax benefits;'';
(iii) in paragraph (4)(B), by striking ``(P)'' and
inserting ``(Q)''; and
(iv) by adding at the end the following:
``(12) Requirement for prompt crediting of private
education loan payments.--
``(A) In general.--Except as provided in subparagraph (B),
in connection with a private education loan, no lender, loan
holder, or servicer shall fail to credit a payment to the
loan account of a borrower as of the date of receipt, except
when a delay in crediting does not result in any charge to
the borrower or in the reporting of negative information to a
consumer reporting agency (as defined in section 603(f)).
``(B) Exception.--If a servicer specifies in writing
requirements for a borrower to follow in making payments, and
accepts a payment that does not conform to those
requirements, the servicer shall credit the payment not later
than 5 days after the date on which the servicer received the
payment.
``(13) Request for payoff amounts of a private education
loan.--A creditor or servicer of a private education loan
shall make an accurate payoff balance for the private
education loan, and the information necessary to calculate
the payoff balance as of a certain date, available to a
borrower within a reasonable time, but in no case more than 7
business days after the date on which the creditor or
servicer receives a written request for the payoff balance
from or on behalf of the borrower.
``(14) Terms for co-borrowers.--Each private education loan
shall include terms that clearly define the requirements to
release a co-borrower from the obligation.''; and
(B) by adding at the end the following:
``(g) Postsecondary Education Loans.--
``(1) Requirement for prompt crediting of postsecondary
education loan payments.--
``(A) In general.--A postsecondary education lender, loan
holder, or student loan servicer shall, in connection with a
postsecondary education loan, credit a payment to the loan
account of the borrower as of the date of receipt of the
payment, except--
``(i) when a delay in crediting does not result in any
charge to the borrower or in the reporting of negative
information to a consumer reporting agency (as defined in
section 603(f)); and
``(ii) as provided in subparagraph (B).
``(B) Exception.--In any case where a student loan servicer
specifies to the borrower, in writing, the requirements to
follow in making payment on a postsecondary education loan
and accepts a payment from the borrower that does not conform
to those requirements, the student loan servicer shall credit
such payment not later than 5 days after the date on which
the servicer received the payment.
``(2) Request for payoff amounts of a postsecondary
education loan.--A postsecondary education lender, loan
holder, or student loan servicer shall make available an
accurate payoff balance for a postsecondary education loan,
and the information necessary to calculate the payoff balance
as of a certain date, to a borrower within a reasonable time,
but in no case more than 7 business days after the date on
which the postsecondary education lender, loan holder, or
student loan servicer receives a written request for the
payoff balance from or on behalf of the borrower.
``(3) Definitions.--In this subsection--
``(A) the term `loan holder' means a person who owns the
title to, or promissory note for, a postsecondary education
loan (except for a loan made under part D or E of title IV of
the Higher Education Act of 1965 (20 U.S.C. 1087a et seq., 20
U.S.C. 1087aa et seq.));
``(B) the term `postsecondary education lender'--
``(i) means an entity that--

``(I) is--

``(aa) a financial institution, as defined in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813);
``(bb) a Federal credit union, as defined in section 101 of
the Federal Credit Union Act (12 U.S.C. 1752); or
``(cc) any other person engaged in the business of
soliciting, making, or extending education loans; and

``(II) solicits, makes, or extends postsecondary education
loans; and

``(ii) does not include--

``(I) the Secretary of Education; or
``(II) an institution of higher education with respect to
any loans made by the institution under part E of title IV of
the Higher Education Act of 1965 (20 U.S.C. 1087aa et seq.);

``(C) the term `postsecondary education loan'--
``(i) 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 lender described in subparagraph
(B)(i)(I) and--

``(aa) 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
``(bb) extended for the purpose of refinancing or
consolidating 1 or more loans described in subclause (aa) or
subclause (I);
``(ii) includes a private education loan (as defined in
section 140(a)); and
``(iii) does not include a loan--

``(I) made under an open-end credit plan; or
``(II) that is secured by real property;

``(D) the term `student loan servicer'--
``(i) means a person who performs student loan servicing;
``(ii) 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;
``(iii) does not include the Secretary of Education to the
extent the Secretary directly performs student loan servicing
for a postsecondary education loan; and
``(iv) 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; and
``(E) the term `student loan servicing' includes any of the
following activities:
``(i) Receiving any scheduled periodic payments from a
borrower under a postsecondary education loan (or
notification of such payments).
``(ii) Applying payments described in clause (i) 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.
``(iii) 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 loan made under part D or E
of title IV of the Higher Education Act of 1965 (20 U.S.C.
1087a et seq., 20 U.S.C. 1087aa et seq.), the Secretary of
Education or the institution of higher education that made
the loan, respectively.

``(iv) Interacting with a borrower to facilitate the
activities described in clauses (i), (ii), and (iii),
including activities to help prevent default by the borrower
of the obligations arising from the postsecondary education
loan.''.
(2) Regulations.--
(A) In general.--Not later than 1 year after the date of
enactment of this Act, the Director of the Bureau of Consumer
Financial Protection shall issue final regulations to
implement paragraphs (1), (2), (4), (12), and (13) of section
128(e) of the Truth in Lending Act (15 U.S.C. 1638(e)), as
added and amended by this section.
(B) Effective date.--Not later than 6 months after the date
on which the Director of the Bureau of Consumer Financial
Protection issues the final regulations required under
subparagraph (A), the regulations shall become effective.
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