Letter to Jeb Hearsling, Chairman of the Committee on Financial Services and Maxine Waters, Ranking Member of the Committee on Finacial Services--Larsen Calls for Hearing on Bereaved Borrowers' Bill of Rights
Letter
Dear Chairman Hensarling and Ranking Member Waters:
As you consider the schedule for the Financial Services Committee, we ask that you add a hearing and markup of H.R. 4643, the Bereaved Borrowers' Bill of Rights Act of 2014, and H.R. 4511, the Protecting Students from Automatic Default Act of 2014.
We recently introduced these bills to protect private student loan borrowers from unfair lending practices identified by the Consumer Financial Protection Bureau. The Bureau's newest report on student loan complaints show that some students are sent into "auto-default" on their loans following the death or bankruptcy of a cosigner, even when the students are making loan payments on time. Many loans also advertise cosigner release, where the borrower can apply to release their cosigner after a period of timely payments. However, many lenders do not make this process accessible on their website, clear to the borrower, or available to all borrowers.
H.R. 4643 would create a robust set of protections for students facing these difficult circumstances, allowing them time to replace or release their cosigner, requiring improvements to the cosigner release process, and prohibiting defaults in these circumstances from appearing on credit reports and ruining the credit of hardworking students. H.R. 4511 is narrowly targeted to give borrowers 90 days from learning of the death or bankruptcy of a cosigner to identify a new cosigner for the loan.
These bills have received national news coverage and support from local universities, national education organizations, and other Members of Congress. We believe these important student protection initiatives are well-positioned to receive bipartisan support and we ask for prompt consideration by the Committee.
We appreciate your consideration and look forward to working with you.
Sincerely,
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