Christopher Bryski Student Loan Protection Act and Christopher's Law - (Sec. 2) Amends the Truth in Lending Act to require institutions of higher education (IHEs) that provide student loan counseling to new borrowers and cosigners at the time of any student loan application, origination, or consolidation, or at the time the cosigner assumes responsibility for repayment, to include information on creating a durable power of attorney for financial decisionmaking.
Requires private educational lenders to provide borrowers and cosigners of student loans with that information at the time of loan application.
Requires lenders of private educational loans for which cosigners are held jointly liable to describe clearly and conspicuously, in writing, the cosigners' obligations regarding such loans, including the effect a borrower's or cosigner's death, disability, or inability to engage in any substantial gainful activity would have on such obligations.
Directs the Board of Governors of the Federal Reserve System to publish model forms for the information this Act requires to be provided regarding: (1) the creation of a durable power of attorney; and (2) a cosigner's obligation.
(Sec. 3) Amends the Higher Education Act of 1965 to require IHEs to provide borrowers of federal educational loans information at their entrance counseling regarding: (1) the effect their death, disability, or inability to engage in any substantial gainful activity would have on their federal and private educational loans; and (2) their state's model form, published by the Board of Governors of the Federal Reserve System, for creating a durable power of attorney.
[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5458 Introduced in House (IH)]
111th CONGRESS
2d Session
H. R. 5458
To amend the Truth in Lending Act and the Higher Education Act of 1965
to require additional disclosures and protections for students and
cosigners with respect to student loans, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 28, 2010
Mr. Adler of New Jersey (for himself, Mr. Pascrell, Mr. Cummings, and
Mr. Rothman of New Jersey) introduced the following bill; which was
referred to the Committee on Financial Services, and in addition to the
Committee on Education and Labor, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Truth in Lending Act and the Higher Education Act of 1965
to require additional disclosures and protections for students and
cosigners 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'' and ``Christopher's Law''.
(b) Findings.--The Congress finds the following:
(1) There is no requirement for Federal or private
education lenders to provide information with respect to, and
discuss the benefit of, creating an advance directive (such as
durable power of attorney, living will, etc.) for financial,
legal, and medical decisionmaking in accordance with State law
to be used in the event of the death, incapacitation, or
disability of the student or such cosigner (if any).
(2) In harsh contrast to existing comprehensive policies of
the Secretary of Education, no requirement exists for private
education lenders to provide information with respect to, and
discuss the benefit of, credit insurance in connection with
private education loans that would protect the signer, and any
such cosigner, in the event of their death, incapacitation, or
disability.
(3) No requirement exists for private education lenders'
master promissory notes to include the same clear and concise
wording in regards to the responsible party in the event the
signer or cosigner becomes disabled, incapacitated, or dies. A
clear and concise definition would provide standard terms and
conditions within private education lenders' master promissory
notes with respect to signer and cosigner obligations. Not
requiring clear and concise obligations allows for a very
unclear delineation of responsibility on the part of the
private education lender, which is a great example of the
freedom large private education lenders currently have.
(4) No standard forms exist for defining disability,
incapacity or death of a private education loan signer, or
cosigner.
(5) No requirement exists for eligible lending
institutions, as defined with the Higher Education Act of 1965,
to disclose to the borrower, information on the conditions
required to discharge the loan due to the disability,
incapacity or death of the signer or cosigner (if any).
(6) Congress modeled the definition of disability in the
Americans with Disabilities Act of 1990 on the definition in
section 504 of the Rehabilitation Act of 1973, which, through
the time of the enactment of the Americans with Disabilities
Act of 1990, had been construed broadly to encompass both
actual and perceived limitations, and limitations imposed by
society.
(7) Of the 1,400,000 people who sustain a traumatic brain
injury each year in the United States, 50,000 die; 235,000 are
hospitalized; and 1,100,000 are treated and released from an
emergency department.
(8) It is estimated that the annual incidence of spinal
cord injury, not including those who die at the scene of the
accident, is approximately 40 cases per 1,000,000 people in the
United States or approximately 12,000 new cases each year.
Since there have not been any overall incidence studies of
spinal cord injuries in the United States since the 1970s, it
is not known if incidence has changed in recent years.
(9) The number of disabled veterans has jumped by 25
percent since 2001 to 2,900,000. Today's veterans, disabled or
not, number nearly 24,000,000.
(10) In the 2007-2008 academic year, 13 percent of students
attending a 4-year public school, and 26.2 percent of students
attending a 4-year private school, borrowed monies from private
loan providers.
(11) According to Sallie Mae, in 2009, the number of
cosigned private educational loans increased from 66 percent to
84 percent of all private educational loans.
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 new subsection:
``(f) Additional Protections Relating to Death or Disability of
Signer or Cosigner of a Private Education Loan.--
``(1) Obligation to discuss advance directives.--In
conjunction with--
``(A) any student loan counseling provided by a
covered educational institution to any new signer and
cosigner (if any) at the time of any loan origination,
loan reapplication, or loan consolidation, or at the
time the cosigner assumes responsibility for repayment,
the institution shall provide information with respect
to, and discuss the benefit of, creating an advance
directive (such as a durable power of attorney, living
will, etc.) for financial, legal, and medical
decisionmaking, in accordance with State law, in the
event of the death, incapacitation, or disability of
the signer or cosigner (if any); and
``(B) any negotiation or other discussion with
respect to any private education loan, the private
educational lender involved in such loan shall discuss
with the signer, and cosigner (if any), the benefit of
creating an advance directive (such as a durable power
of attorney, living will, etc.) for financial, legal,
and medical decisionmaking, in accordance with State
law, with respect to such loan, in the event of the
death, incapacitation, or disability of the student or
such cosigner (if any).
``(2) Clear and complete description of cosigner's
obligation.--In the case of any private education lender who
extends a private education loan for which any cosigner is
jointly liable, the lender shall define, clearly and concisely,
the terms of such person's obligations with respect to the
loan, including the effect the death, incapacitation, or
disability of the signer or cosigner (if any) would have on any
such obligation, in language that the Board determines would
give a reasonable person a reasonable apprehension of the
obligation being assumed by becoming a cosigner for the loan.
``(3) Credit insurance.--In the case of any private
education loan for which there is a cosigner, the private
educational lender involved in such loan--
``(A) shall provide information with respect to,
and discuss the benefit of credit insurance with the
signer, and the cosigner, in connection with such loan
that would protect the signer and any cosigner in the
event of the death, incapacitation, or disability of
the signer or any such cosigner;
``(B) shall discuss with the student and the
cosigner the benefit of credit insurance in connection
with such loan that would protect the student and any
cosigner in the event of the death or disability of the
student or any such cosigner;
``(C) may provide or make arrangements for the
provision of any credit insurance referred to in
subparagraph (A) in conjunction with the loan; and
``(D) may not--
``(i) establish any condition or
requirement that the signer and cosigner (if
any) has or has not obtained any such consumer
credit insurance from the private educational
lender, and affiliate of the private education
lender or any other consumer credit insurance
provider; or
``(ii) extend or deny a loan, or fix or
vary the terms of the loan, on the basis that
the signer and cosigner (if any) has or has not
obtained any such consumer credit insurance
from the private educational lender, and
affiliate of the private education lender, or
any other consumer credit insurance provider.
``(4) Model forms.--The Board shall publish model forms
under section 105 for describing a cosigner's obligation for
purposes of paragraph (2).
``(5) Regulations defining death or disability.--
``(A) In general.--The Board shall--
``(i) prescribe regulations defining the
manner and standards for establishing that a
private education loan signer, or consigner (if
any), has died or become incapacitated or
disabled; and
``(ii) implement and enforce such
regulations in connection with any private
education loan.
``(B) Coordination with secretary of education.--In
prescribing regulations under subparagraph (A), the
Board shall--
``(i) consult with the Secretary of
Education; and
``(ii) conform such regulations with the
regulations prescribed by such Secretary under
section 437(a)(1) of the Higher Education Act
of 1965 (20 U.S.C. 1087(a)(1)) to the fullest
extent practicable, including safeguards to
prevent fraud and abuse.
``(C) Determination by the secretary of veterans
affairs.--The regulations prescribed under subparagraph
(A) shall provide that a determination described in
section 437(a)(2) of the Higher Education Act of 1965
(20 U.S.C. 1087(a)(2)) by the Secretary of Veterans
Affairs with respect to any person shall be dispositive
for such person for purposes of this subsection and any
agreement covered by this subsection.''.
(b) Definitions.--Subsection (a) of section 140 of the Truth in
Lending Act (15 U.S.C. 1650(a)) is amended by adding at the end the
following new paragraphs:
``(9) Advance directive.--The term `advance directive'
means a written instruction, such as a living will or durable
power of attorney for health care, recognized under State law
(whether statutory or as recognized by the courts of the
State), relating to the provision of health care when the
individual is incapacitated.
``(10) Cosigner.--The term `cosigner'--
``(A) means any individual who is liable for the
obligation of another without compensation, regardless
of how designated in the contract or instrument;
``(B) includes any person whose signature is
requested as condition to grant credit or to forebear
on collection; and
``(C) does not include a spouse of an individual
referred to in subparagraph (A) whose signature is
needed to perfect security interest individual.
``(11) Credit insurance.--The term `credit insurance' has
the meaning given to such term by the Board in regulations for
purposes of this section.
``(12) Disability.--The term `disability' has the meaning
given to such term in section 3 of the Americans with
Disabilities Act of 1990.
``(13) Durable power of attorney.--The term `durable power
of attorney' meaning given to such term in the Uniform Durable
Power of Attorney Act of 1979 and sections 5-501 through 5-505
of the Uniform Probate Code, as in effect in any State.
``(14) Incapacity.--The terms `incapacity',
`incapacitated', or `incapacitation' have the meanings given to
such terms in the Family and Medical Leave Act of 1968, and
regulations prescribed under such Act.''.
SEC. 3. FEDERAL STUDENT LOANS.
(a) Federal PLUS Loans.--Section 428B of the Higher Education Act
of 1965 (20 U.S.C. 1078-2) is amended by adding at the end the
following:
``(g) Disclosure.--An eligible lender shall disclose to a
prospective borrower, in simple and understandable terms, at the time
the lender provides an application for a PLUS loan, information with
respect to creating a durable power of attorney to be used in the event
of the death or disability of the borrower (or the student on whose
behalf the loan is borrowed by the parent borrower) including the uses
and benefits of creating such a power of attorney with respect to
student loans and other financial obligations of the borrower.''.
(b) Federal Consolidation Loans.--Section 428C(b)(1)(F) of the
Higher Education Act of 1965 (20 U.S.C. 1078-3(b)(1)(F)) is amended--
(1) by redesignating clauses (vi) and (vii) as clauses
(vii) and (viii), respectively; and
(2) by inserting after clause (v) the following new clause:
``(vi) information with respect to creating
an advanced directive (such as a durable power
of attorney, living will, etc.) for financial
legal and medical decisionmaking in accordance
with State law in the event of the death,
incapacitation, or disability of the borrower,
including the uses and benefits of such an
advanced directive with respect to student
loans and other financial obligations of the
borrower;''.
(c) Entrance Counseling for Federal Loans.--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 on the conditions required to
discharge the loan due to the death, incapacitation, or
disability of the borrower, in accordance with section
437(a), and an explanation that, in the case of a
private education loan made through a private lender,
the borrower, the borrower's estate, and any consigner
of a such a private education loan may be obligated to
repay the full amount of the loan, regardless of the
death, incapacitation, or disability of the borrower.
``(M) Information with respect to creating an
advanced directive (such as a durable power of
attorney, living will, etc.) for financial legal and
medical decisionmaking in accordance with State law a
durable power of attorney to be used in the event of
the death, incapacitation, or disability of the
borrower, including an explanation of the uses and
benefits of such an advanced directive with respect to
student loans and other financial obligations of the
borrower.''.
<all>
Introduced in House
Introduced in House
Referred to House Financial Services
Referred to the Committee on Financial Services, and in addition to the Committee on Education and Labor, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to House Education and Labor
Mr. Adler (NJ) moved to suspend the rules and pass the bill, as amended.
Considered under suspension of the rules. (consideration: CR H7077-7079)
DEBATE - The House proceeded with forty minutes of debate on H.R. 5458.
Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote.(text: CR H7078)
On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H7078)
Motion to reconsider laid on the table Agreed to without objection.
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Received in the Senate and Read twice and referred to the Committee on Health, Education, Labor, and Pensions.