Protecting Students From Automatic Default Act of 2014

Protecting Students From Automatic Default Act of 2014 - Amends the Truth in Lending Act to require a private educational lender to notify a borrower immediately if, upon receiving notification of the death or bankruptcy of a cosigner jointly liable for the private education loan, the lender deems the borrower to be in default, changes the terms of the loan, or accelerates the loan's repayment terms.

Requires a private educational lender to give a borrower at least 90 days after such a notification to identify a new cosigner for that loan. Retains the lender's right to renegotiate loan terms based on the creditworthiness of the new cosigner.

[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4511 Introduced in House (IH)]

113th CONGRESS
  2d Session
                                H. R. 4511

  To amend the Truth in Lending Act to establish requirements for the 
treatment of a private education loan upon the death or bankruptcy of a 
                         cosigner of the loan.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             April 29, 2014

  Mr. Bishop of New York (for himself, Mrs. McCarthy of New York, Mr. 
   Hinojosa, Mr. Takano, Ms. Bonamici, Mr. Conyers, Mr. Fattah, Mr. 
Cummings, Ms. Bass, Mr. Moran, Mr. Welch, and Mr. Loebsack) introduced 
 the following bill; which was referred to the Committee on Financial 
                                Services

_______________________________________________________________________

                                 A BILL


 
  To amend the Truth in Lending Act to establish requirements for the 
treatment of a private education loan upon the death or bankruptcy of a 
                         cosigner of the loan.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Protecting Students From Automatic 
Default Act of 2014''.

SEC. 2. REQUIREMENTS FOR PRIVATE EDUCATIONAL LENDERS.

    (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:
    ``(g) Death or Bankruptcy of a Cosigner on a Private Education 
Loan.--
            ``(1) In general.--Notwithstanding any provision in a 
        private education loan agreement, a private educational lender 
        shall immediately notify a borrower if, upon receiving 
        notification of the death or bankruptcy of a cosigner who is 
        jointly liable for the private education loan, such lender 
        deems the borrower to be in default, changes the terms of the 
        loan, or accelerates the repayment terms of the loan.
            ``(2) New cosigner.--A private educational lender shall 
        provide a period of time of not less than 90 days, beginning on 
        the date such lender issues the notification described in 
        subsection (a), for a borrower to identify a new cosigner for 
        the loan. Such lender shall retain the right to renegotiate 
        loan terms based on the creditworthiness of the new 
        cosigner.''.
    (b) Rule of Construction.--The amendments made by this Act shall 
apply to any private education loan agreements in existence on the date 
of enactment of this Act or entered into after the date of enactment of 
this Act.
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