Vote Smart's Synopsis:

Vote to pass a bill that requires private education loan collectors to provide certain information to a student loan borrower in a certain manner and on the request of the borrower.

Highlights:

• Defines the following terms related to private loan collection (Sec. 1):

• “Cosigner”- an individual who is liable for the financial obligation of another:

• “Creditor”- The person or institution who owns the private education loan; 

• “Original creditor”- the private education lender who originated the loan; 

• “Private education lender”- a person or institution that is in the charge of making or securing private education loans; 

• “Private education loan”- a loan that expressly is for the purposes of education; 

• “Private education Loan collection action”- a judicial action with the aims of collecting on a private education loan;

• “Private education loan collector”-a person or institution that collects on a private education loan; and

• “Student loan borrower”- a person who agrees to receive a private education loan.

• Establishes that a private education lender may not collect on a loan unless a lender or collector possesses the following documents, including, but not limited to (Sec. 2):  

• The name of the owner of the loan; 

• The original creditors name; 

• The last four digits of the creditors account number if they have defaulted; 

• The amount due at default;  

• An itemization of interest and fees; 

• A record of the date when it was incurred; 

• Record of the last payment; 

• Any other payments;

• A copy of the self certification form conducted by the original creditor; 

• A record of all collection attempts;

• A statement by the creditor that they are willing to renegotiate the terms of the debt;

• Documentation that the creditor is the original owner of the specific individual private education loan;  

• A copy of the contract between the creditor and the borrower; 

• An affidavit concerning evidence and confirming the factual accuracy of the allegation set forth in the collection agreement; and

• A statement on whether the debt can be repaid through and income based repayment plan.

• Establishes that a court cannot enter into a judgment in favor of a private lender unless they have the above documents and materials (Sec. 2).

• Establishes that a private education loan collector must present the borrower with said information on the request of the borrower at the first communication (Sec. 3).

• Establishes that the failure to do the above will constitute an unfair, abusive, or dishonest trade practice according to Maryland commercial law (Sec. 3).

• Establishes that Individuals suffering damage do to the above breach of Maryland commercial law may collect the following (Sec. 4): 

• An order vacating the decision; 

• A judgment in favor of the person; 

• Actual damages totalling $500 in person; 

• Punitive damages; 

• Attorney’s fees; and 

• Any other relief that the court considers proper. 

• Establishes that individuals who suffered damages due to creditors or loan collectors presenting false information may collect additional damages of $1,500 per person (Sec. 4).

Full Bill Text