< Back to H.R. 4511 (113th Congress, 2013–2015)

Text of the Protecting Students From Automatic Default Act of 2014

This bill was introduced on April 29, 2014, in a previous session of Congress, but was not enacted. The text of the bill below is as of Apr 29, 2014 (Introduced).

I

113th CONGRESS

2d Session

H. R. 4511

IN THE HOUSE OF REPRESENTATIVES

April 29, 2014

(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.

1.

Short title

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

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.