Vote Smart's Synopsis:

Vote to pass a bill that prohibits a consumer reporting agency from furnishing a consumer report containing any adverse information relating to a delinquent or defaulted private education loan of a borrower who has a demonstrated history of loan repayment.

Highlights:

• Prohibits a consumer reporting agency from furnishing any consumer report containing any adverse information relating to the delinquent or defaulted private education loan of a borrower if the borrower has rehabilitated their credit by making 9 on-time monthly payments during 10 consecutive months after the date on which the default or delinquency occurred (Sec. 301).

• Authorizes a borrower to stop making consecutive monthly payments and be granted a grace period, after which the 10-month period will resume (Sec. 301).

• Specifies that such a grace period will be provided under the following circumstances (Sec. 301):

• For a borrower who is a member of the Armed Forces entitled to incentive pay for the performance of hazardous duty, the grace period will begin on the date on which the borrower begins such assignment or duty and will end on the date that is 6 months after the completion of such duty or assignment; or

• For a borrower who resides or works in an area affected by a major disaster or emergency declared, the grace period will begin on the initial date of the incident period of the major disaster or emergency, and end on the date that is the earlier of:

• 6 months after the date on which the major disaster or emergency was declared; and 

• The later of:

• 3 months after the date on which the major disaster or emergency was declared; or

• The date that the Director of the Consumer Financial Protection Bureau (CFPB) determines is the date on which substantially all provision of assistance by the Federal Emergency Management Agency under such major disaster or emergency, declaration concluded. 

• Authorizes the CFPB to allow a borrower demonstrating hardship to stop making consecutive monthly payments and be granted a grace period after which the 10-month period will resume (Sec. 301).

• Defines “borrower demonstrating hardship” as a borrower or a class of borrowers who, as determined by the CFPB, is facing or has experienced unusual extenuating life circumstances or events that result in severe financial or personal barriers, including homelessness, such that the borrower or class of borrowers does not have the capacity to comply with monthly payments (Sec. 301).

• Prohibits a private educational loan holder from proceeding with any civil action against a borrower for a delinquent or defaulted loan during the period of rehabilitation if the private educational loan holder has been notified (Sec. 301):

• Of such borrower’s intent to participate in rehabilitation; 

• That such borrower has satisfied the requirements for rehabilitation described above; or

• That such borrower was granted a grace period. 

• Requires that if a private educational loan holder enters into a payment plan with a borrower on a private education loan during a period of rehabilitation, such a payment plan will be reasonable and affordable, as determined by the CFPB (Sec. 301).

• Specifies that a borrower satisfying the requirements for rehabilitation will be eligible for additional credit rehabilitation for any subsequent default or delinquency of the borrower on the rehabilitated private education loan (Sec. 301).

• Prohibits a credit scoring model from taking into consideration, in a manner adverse to a consumer’s credit score or educational credit score, any information in a consumer report concerning the consumer’s participation in credit restoration or rehabilitation (Sec. 407).

• Prohibits a credit scoring model from treating negatively, in a manner adverse to a consumer’s credit score or educational credit score, the absence of payment history data for an existing account, where the absence of such information is the result of a consumer’s participation in credit restoration or rehabilitation (Sec. 407).

Full Bill Text

Full Bill Text