Colorado Senate Bill SB248

Colorado 2023 Regular Session

• Introduced: 3/24/23
• Refer: 3/24/23
• Report Pass: 4/11/23
• Refer: 4/11/23
• Report Pass: 4/18/23
• Refer: 4/18/23
• Engrossed: 4/24/23
• Refer: 4/24/23
• Report Pass: 5/3/23
• Refer: 5/3/23
• Engrossed: 5/16/23
• Engrossed: 5/17/23
• Enrolled: 5/17/23
• Passed: 6/5/23

Caption

Attorney General Regulated Consumer Credit Transactions

Impact

If enacted, SB248 will significantly impact existing statutes related to consumer credit, particularly those governing student loan servicers and their obligations. The legislation aims to provide a more robust framework for borrower protection by standardizing procedures around cosigner releases and ensuring clear lines of communication from lenders. Additionally, it will place more stringent requirements on collection agencies, ensuring that they cannot collect debt without proper documentation and borrower notification. This change is expected to alleviate some burden on borrowers struggling with private education loan debts while enhancing their rights within the financial system.

Summary

Senate Bill 248, also known as the 'Attorney General Regulated Consumer Credit Transactions', is designed to strengthen consumer protections related to private education loans in Colorado. The bill mandates that lenders must provide borrowers and cosigners with clear information about their rights and obligations, particularly regarding the terms of the loans and the conditions under which cosigners can be released from their obligations. It stipulates that lenders should not impose unreasonable restrictions on cosigners seeking release and ensures protections are extended to borrowers in cases of disability or death. Furthermore, the bill emphasizes transparency in debt collection practices by requiring lenders and collection agencies to disclose critical information regarding the debts they are attempting to collect.

Sentiment

The sentiment around SB248 is generally positive among consumer advocacy groups and some legislators, who view it as a necessary step to protect vulnerable borrowers from aggressive debt collection practices and unreasonable lending terms. However, some industry representatives express concerns that the additional regulations could complicate the lending process and lead to higher costs for borrowers if lenders adjust their fee structures to accommodate the new requirements. The debate underscores a fundamental tension between enhancing borrower protections and maintaining a viable lending environment.

Contention

Notable points of contention regarding SB248 involve the balance between consumer protections and lender operational flexibility. Proponents argue that the bill will empower borrowers and cosigners, particularly those affected by challenging circumstances such as disability or the death of a cosigner. Critics, however, warn that the stringent requirements for disclosure and compliance could lead some lenders to exit the market or increase borrowing costs to mitigate compliance risks. As the bill moves through the legislative process, it could face amendments aimed at addressing these industry concerns while still promoting consumer protection.