ENGROSSED ORIGINAL
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A BILL 1
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25-37 3
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IN THE COUNCIL OF THE DISTRICT OF COLUMBIA 5
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To amend the Department of Insurance and Securities Regulation Establishment Act of 1996 to 10
prevent abusive acts or practices related to student education loans and private education 11
loans, require the creation of a revised Student Loan Borrower Bill of Rights by January 12
1, 2025, to clarify that student loan servicers under contract with the United States 13
Department of Education shall be automatically issued a limited student loan servicing 14
license upon meeting certain criteria, to clarify the rights and obligations regarding 15
denials of applications for approval, to prescribe prohibited conduct on the part of student 16
loan servicers and private education lenders, to assign duties to student loan servicers and 17
private education lenders, to establish responsibilities of private education lenders 18
regarding disability discharge and cosigner release, to authorize the Attorney General to 19
bring an action for a violation of certain provisions, and to make a conforming 20
amendment. 21
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BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this 23
act may be cited as the “New Student Loan Borrower Bill of Rights Amendment Act of 2024”. 24
Sec. 2. The Department of Insurance and Securities Regulation Establishment Act of 25
1996, effective May 21, 1997 (D.C. Law 11-268; D.C. Official Code § 31-101 et seq.), is 26
amended as follows: 27
(a) Section 2 (D.C. Official Code § 31-101) is amended as follows: 28
(1) A new paragraph (1A) is added to read as follows: 29
“(1A) “Abusive act or practice” means an act or practice that: 30 ENGROSSED ORIGINAL
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“(A) Materially interferes with the ability of a student loan borrower to 31
understand a term or condition of a student education loan or private education loan; 32
“(B) Takes unreasonable advantage of: 33
“(i) A lack of understanding on the part of a student loan borrower 34
of the material risks, costs, or conditions of a student education loan or private education loan; 35
“(ii) The inability of a student loan borrower to protect the interests 36
of the student loan borrower when selecting or using: 37
“(I) A student education loan or private education loan; or 38
“(II) A feature, term, or condition of a student education 39
loan or private education loan; or 40
“(iii) The reasonable reliance by the student loan borrower on a 41
person engaged in servicing a student education loan or private education loan to act in the 42
interests of the borrower; or 43
“(C) Misrepresents the amount, nature, or terms of any fee or payment due 44
or claimed to be due on a student education loan or private education loan, the terms and 45
conditions of the student education loan agreement or private education loan agreement or the 46
student loan borrower's obligations under the student education loan or private education loan.”. 47
(2) A new paragraph (2A) is added to read as follows: 48
“(2A)(A) “Cosigner” means an individual who is liable for the obligation of a 49
student loan borrower without compensation, regardless of how the individual is designated in 50 ENGROSSED ORIGINAL
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the contract or instrument with respect to that obligation, including an obligation under a private 51
education loan extended to consolidate a student loan borrower’s pre-existing student loans. 52
“(B) The term includes an individual whose signature is requested as a 53
condition to grant credit or to forbear on collection, but does not include a spouse of a student 54
loan borrower, the signature of whom is needed to perfect the security interest in a loan.”. 55
(3) New paragraphs (6C), (6D), (6E), (6F), and (6G) are added to read as follows: 56
“(6C) “Overpayment” means a payment on a student education loan or private 57
education loan in excess of the monthly amount due from the student loan borrower on a student 58
education loan or private education loan. 59
“(6D) “Partial payment” means a payment on a student education loan account 60
that contains multiple individual loans in an amount less than the amount necessary to satisfy the 61
outstanding payment due on all loans in the student education loan account. 62
“(6E)(A) “Postsecondary education expense” means an expense related to 63
enrollment in or attendance at a postsecondary education institution regardless of whether the 64
debt incurred by a student to pay those expenses is owed to the provider of postsecondary 65
education whose school, program, or facility the student attends. 66
(B) For the purpose of this paragraph, the term “postsecondary” 67
has the same meaning as that term is defined in section 201(12B) of the Education Licensure 68
Commission Act of 1976, effective April 6, 1977 (D.C. Law 1-104; D.C. Official Code § 38-69
1302(12B)). 70 ENGROSSED ORIGINAL
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“(6F) “Private education lender” means a person engaged in the business of 71
securing, making, or extending private education loans, or a holder of a private education loan. 72
The term does not include, to the extent preempted by federal law: 73
“(A) A bank or credit union; 74
“(B) A wholly owned subsidiary of a bank or credit union; or 75
“(C) An operating subsidiary of a bank or credit union where each owner 76
of the operating subsidiary is wholly owned by the same bank or credit union. 77
“(6G)(A) “Private education loan” means an extension of credit that is not made, 78
insured, or guaranteed under Title IV of the Higher Education Act of 1965 (20 U.S.C. § 1070 et 79
seq.), and is extended to a consumer expressly, in whole or in part, for postsecondary education 80
expenses regardless of whether the loan is provided by the educational institution that the student 81
attends. 82
“(B) The term does not include: 83
“(i) Open-end credit or any loan that is secured by real property or 84
a dwelling; or 85
“(ii) An extension of credit in which the covered educational 86
institution is the creditor if the term is 90 days or less or an interest rate shall not be applied to 87
the credit balance and the term of the extension of credit is one year or less, even if the credit is 88
payable in more than 4 installments. 89
(4) Paragraph (9) is amended to read as follows: 90 ENGROSSED ORIGINAL
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“(9) “Student loan borrower” means a resident of the District of Columbia who 91
has received or agreed to pay a student education loan or a private education loan to fund his or 92
her postsecondary education.”. 93
(5) A new paragraph (13) is added to read as follows: 94
“(13) “Total and permanent disability” is the condition of an individual who: 95
“(A) Has been determined by the United State Secretary of Veterans 96
Affairs to be unemployable due to a service-connected disability; or 97
“(B) Is unable to engage in any substantial gainful activity by reason of 98
any medically determinable physical or mental impairment that can be expected to result in 99
death, has lasted for a continuous period of not less than 12 months, or can be expected to last for 100
a continuous period of not less than 12 months.”. 101
(b) Section 7a(c)(10) (D.C. Official Code § 31-106.01(c)(10)) is amended to read as 102
follows: 103
“(10) By January 1, 2025, develop an updated consumer-facing student loan borrower bill 104
of rights, and make it available on the Department’s website.”. 105
(c) Section 7b (D.C. Official Code § 31-106.02) is amended as follows: 106
(1) Subsection (c) is amended as follows: 107
(A) Paragraph (1)(B) is amended by striking the phrase “Application fees 108
and other fees” and inserting the phrase “Application fees, investigation fees, and other fees” in 109
its place. 110 ENGROSSED ORIGINAL
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(B) A new paragraph (3) is added to read as follows: 111
“(3) The Commissioner shall automatically issue a limited, irrevocable license to 112
a person or entity servicing a student education loan under contract with the United States 113
Department of Education provided that: 114
“(A)(i), A person or entity seeking to act within the District of Columbia 115
as a student loan servicer is exempt from the application procedures established pursuant to this 116
subsection, other than the requirements of paragraphs (1)(B) and (1)(D) of this subsection, to the 117
extent that the student loan servicing performed is conducted pursuant to a contract awarded by 118
the United States Secretary of Education under 20 U.S.C. § 1087f. 119
“(ii) The Commissioner shall prescribe the procedure to document 120
eligibility for the exemption and maintain records documenting each person and entity issued a 121
license pursuant to this paragraph. 122
“(B) A person or entity meeting the criteria set forth in subparagraph (A) 123
of this paragraph shall be issued a license by the Commissioner for the student loan servicing of 124
student education loans under contract with the United States Department of Education and shall 125
be deemed by the Commissioner to have met all the requirements established by subparagraphs 126
(1)(A) and (C) of this subsection. 127
“(C) The provisions of subsection (h) of this section shall not apply to a 128
person or entity issued a limited license pursuant to this section to the extent that the person or 129
entity is servicing a federal student education loan. 130 ENGROSSED ORIGINAL
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“(D)(i) A person or entity issued a license pursuant to this section shall 131
provide the Commissioner with written notice within 7 days following the notification of the 132
expiration, revocation, or termination of any contract awarded by the United States Secretary of 133
Education under 20 U.S.C § 1087f (“written notice”). 134
“(ii) After providing the written notice required by sub-135
subparagraph (i) of this subparagraph, the person or entity shall have 30 days to satisfy all the 136
requirements established under this section in order to continue to act within the District of 137
Columbia as a student loan servicer for federal student education loans. 138
“(iii) At the expiration of the 30-day period provided in sub-139
subparagraph (ii) of this subparagraph, if the person or entity has not satisfied the requirements 140
established pursuant to this section, the Commissioner shall immediately suspend any license 141
granted under this section. 142
“(E) In the case of student loan servicing that is not conducted pursuant to 143
a contract awarded by the United States Secretary of Education under 20 U.S.C. § 1087f, nothing 144
in this section shall prevent the Commissioner from issuing an order to temporarily or 145
permanently prohibit a person or entity from acting as a student loan servicer. 146
“(F) In the case of student loan servicing conducted pursuant to a contract 147
awarded by the United States Secretary of Education under 20 U.S.C § 1087f, nothing in this 148
section shall prevent the Commissioner from issuing a cease-and-desist order or an injunction 149 ENGROSSED ORIGINAL
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against a student loan servicer to cease activities in violation of this act or D.C. Official Code 150
§28-3901 et seq.”. 151
(2) Subsection (g)(1)(C) is amended by striking the phrase “The Commissioner 152
may deny an application for renewal” and inserting the phrase “Except as provided under 153
subsection (c)(3) of this section, the Commissioner may deny an application for renewal” in its 154
place. 155
(3) A new subsection (k) is added to read as follows: 156
“(k) In a format prescribed by the Commissioner, a licensee shall maintain the 157
contact information for the Department and the Ombudsman, as defined in section 7c(6B), on the 158
licensee’s website.”. 159
(d) New sections 7b-1, 7b-2, 7b-3, 7b-4, and 7b-5 are added to read as follows: 160
“Sec. 7b-1. Prohibited conduct –student loan servicers. 161
“(a) No student loan servicer shall: 162
“(1) Directly or indirectly employ any scheme, device, or artifice to defraud a 163
student loan borrower; 164
“(2) Directly or indirectly employ any scheme, device, or artifice to mislead a 165
student loan borrower; 166
“(3) Engage in any unfair or deceptive practice toward any person or misrepresent 167
or omit any material information in connection with the servicing of a student education loan, 168
including an abusive act and practice; 169 ENGROSSED ORIGINAL
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“(4) Obtain property by fraud; 170
“(5) Obtain property by misrepresentation; 171
“(6) Misapply student education loan payments to the outstanding balance of a 172
student education loan; 173
“(7) Provide inaccurate information to a credit bureau, harming a student loan 174
borrower's creditworthiness; 175
“(8) Fail to report both the favorable and unfavorable payment history of the 176
student loan borrower to a nationally recognized consumer credit bureau at least annually if the 177
student loan servicer regularly reports information to a credit bureau; 178
“(9) Refuse to communicate with an authorized representative of the student loan 179
borrower who provides a written authorization signed by the student loan borrower; except, that 180
the student loan servicer may adopt procedures reasonably related to verifying that the 181
representative is authorized to act on behalf of the student loan borrower; 182
“(10) Make a false statement or make an omission of a material fact in connection 183
with any information or report filed with a governmental agency or in connection with any 184
investigation conducted by the Commissioner or another governmental agency; 185
“(11) Fail to respond within 15 business days to a communication from the 186
Department, or the Office of the Attorney General, or within such shorter reasonable period of 187
time as may be requested by the Department or the Attorney General; or 188 ENGROSSED ORIGINAL
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“(12)(A) Fail to respond within 15 business days to a consumer complaint 189
submitted to the student loan servicer by the Department or the Office of the Attorney General. 190
“(B) A student loan servicer may request additional time to respond to the 191
complaint, up to a maximum of 45 business days, provided that the request is accompanied by an 192
explanation as to why additional time is reasonable and necessary. 193
“Sec. 7b-2. Affirmative duties – student loan servicers. 194
“(a) Except as otherwise provided pursuant to federal law or a student education loan 195
agreement, a student loan servicer shall: 196
“(1) Respond to any written inquiry from a student loan borrower or the 197
representative of a student loan borrower by: 198
“(A) Acknowledging receipt of the inquiry within 10 business days; and 199
“(B) Providing information relating to the inquiry, and, if applicable, the 200
action the student loan servicer will take to correct the account or an explanation of the student 201
loan servicer's determination that the borrower's account is correct within 30 business days, 202
including copies of all information and account information used by the student loan servicer in 203
reaching the determination. 204
“(2) Inquire of a student loan borrower who has an overpayment on how the 205
student loan borrower wants to apply the overpayment to a student education loan. A student 206
loan borrower's instruction on how to apply an overpayment to a student education loan shall 207 ENGROSSED ORIGINAL
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stay in effect for any future overpayments during the term of the student education loan until the 208
borrower provides different instructions. 209
“(3)(A) In the absence of direction provided by a student loan borrower pursuant 210
to paragraph (2) of this subsection, allocate an overpayment on a student loan account in a 211
manner that reduces the total cost of the student loan, including principal and balance, interest, 212
and fees. 213
“(B) A student loan servicer shall be deemed to meet the requirements of 214
this paragraph if the servicer allocates the overpayment to the loan with the highest interest rate 215
on the student loan borrower’s account, unless the student loan borrower specifies otherwise. 216
“(4)(A) In the absence of direction provided by a student loan borrower pursuant 217
to paragraph (2) of this subsection, apply partial payments in a manner that minimizes late fees 218
and negative credit reporting. 219
“(B) If there are multiple loans on a student loan borrower’s account with 220
an equal stage of delinquency, apply the partial payment in a way that satisfies as many 221
individual loan payments as possible on a student loan borrower's account. 222
“(b) Except as otherwise provided by federal law or regulation, the following 223
requirements shall be applicable to a student loan servicer in the event of the sale, assignment, or 224
other transfer of the servicing of a student education loan that results in a change in the identity 225
of the student loan servicer to whom a student loan borrower is required to send payments or 226
direct any communication concerning the student education loan: 227 ENGROSSED ORIGINAL
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“(1)(A) As a condition of a sale, an assignment, or any other transfer of the 228
servicing of a student education loan, a student loan servicer shall require the new student loan 229
servicer to honor all benefits originally represented as available to a student loan borrower during 230
the repayment of the student education loan and preserve the availability of those benefits, 231
including any benefits for which the student loan borrower has not yet qualified. 232
“(B) If a student loan servicer is not also the loan holder or is not acting on 233
behalf of the loan holder, the student loan servicer satisfies the requirement established by this 234
paragraph by providing the new student loan servicer with the information necessary for the new 235
student loan servicer to honor all benefits originally represented as available to a student loan 236
borrower during the repayment of the student education loan and preserve the availability of the 237
benefits, including any benefits for which the student loan borrower has not yet qualified. 238
“(2) A student loan servicer shall transfer to the new student loan servicer for the 239
student education loan all information regarding the student loan borrower, the account of the 240
student loan borrower, and the student education loan of the student loan borrower. The 241
information shall include the repayment status of the student loan borrower and any benefits 242
associated with the student education loan of the borrower. 243
“(3) The student loan servicer shall complete the transfer of information required 244
pursuant to paragraph (2) of this subsection within 45 calendar days after the sale, assignment, or 245
other transfer of the servicing of the student education loan. 246 ENGROSSED ORIGINAL
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“(4) The transferring student loan servicer shall notify affected student loan 247
borrowers of the sale, assignment, or other transfer of the servicing of the student education loan 248
at least 7 days before the next payment on the loan is due, which notice shall include: 249
“(A) The identity of the new student loan servicer; 250
“(B) The effective date of the transfer of the student loan borrower’s 251
student education loan to the new student loan servicer; 252
“(C) The date on which the existing student loan servicer will no longer 253
accept payments and whether and by when any action will need to be taken to update auto-debit 254
payments; and 255
“(D) The contact information for the new student loan servicer, including 256
phone number, email address, mailing address, and fax number. 257
“(c) A student loan servicer who obtains the right to service a student education loan shall 258
adopt policies and procedures to verify that the student loan servicer has received all information 259
regarding the student loan borrower, the account of the student loan borrower, and the student 260
education loan of the student loan borrower, including the repayment status of the student loan 261
borrower and any benefits associated with the student education loan of the student loan 262
borrower. 263
“(d) A student loan servicer shall evaluate a student loan borrower for eligibility for an 264
income-driven repayment program prior to placing the student loan borrower in forbearance or 265
default if an income-driven repayment program is available to the student loan borrower. 266 ENGROSSED ORIGINAL
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“Sec. 7b-3. Prohibited acts – private education lenders. 267
“(a)(1) A private education loan executed after the applicability date of this section shall 268
not include a provision that permits the private education lender to accelerate, in whole or in part, 269
payments on a private education loan except in cases of payment default or place any loan or 270
account into default or accelerate a loan for any reason other than for payment default. 271
“(2) A private education loan executed prior to the applicability date of this 272
section shall permit the private education lender to accelerate payments only if the promissory 273
note or private education loan agreement explicitly authorizes an acceleration and only for the 274
reasons stated in the note or agreement. 275
“(3) In the event of the death of a cosigner, the lender shall not attempt to collect 276
against the cosigner’s estate other than for payment default. 277
“(4) Upon receiving notification of the death or bankruptcy of a cosigner, when 278
the private education loan is not more than 60 days delinquent at the time of the notification, the 279
private education lender shall not change any terms or benefits under the promissory note, 280
repayment schedule, repayment terms, or monthly payment amount or any other provision 281
associated with the private education loan. 282
“(5) A private education lender shall not place any private education loan or 283
account into default or accelerate a private education loan while a student loan borrower is 284
seeking a loan modification or enrollment in a flexible repayment plan; except, that a private 285 ENGROSSED ORIGINAL
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education lender may place a private education loan or account into default or accelerate a 286
private education loan for payment default 90 days after the student loan borrower’s default. 287
“(b) A private education lender shall not: 288
“(1) Directly or indirectly employ any scheme, device, or artifice to defraud a 289
student loan borrower; 290
“(2) Directly or indirectly employ any scheme, device, or artifice to mislead a 291
student loan borrower; 292
“(3) Engage in any unfair or deceptive practice toward any person or misrepresent 293
or omit any material information in connection with the servicing of a private education loan, 294
including, abusive acts and practices; 295
“(4) Obtain property by fraud; 296
“(5) Obtain property by misrepresentation; 297
“(6) Misapply private education loan payments to the outstanding balance of a 298
private education loan; 299
“(7) Provide inaccurate information to a credit bureau, thereby harming a student 300
loan borrower’s creditworthiness; 301
“(8) Fail to report both the favorable and unfavorable payment history of the 302
student loan borrower to a nationally recognized consumer credit bureau at least annually if the 303
private education lender regularly reports information to a credit bureau; 304 ENGROSSED ORIGINAL
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“(9) Refuse to communicate with an authorized representative of the student loan 305
borrower who provides a written authorization signed by the student loan borrower; except, that 306
the private education lender may adopt procedures reasonably related to verifying that the 307
representative is authorized to act on behalf of the student loan borrower; 308
“(10) Make any false statement or make any omission of a material fact in 309
connection with any information or reports filed with a governmental agency or in connection 310
with any investigation conducted by the Commissioner or another governmental agency; 311
“(11) Fail to respond within 15 business days to communications from the 312
Department or the Office of the Attorney General, or within such shorter reasonable period of 313
time as may be requested by the Commissioner or the Attorney General; or 314
“(12)(A) Fail to respond within 15 business days to a consumer complaint 315
transmitted to the private education lender by the Department or the Office of the Attorney 316
General. 317
“(B) A private education lender may request additional time to respond to 318
the complaint, up to a maximum of 45 business days, provided that the request is accompanied 319
by an explanation as to why additional time is reasonable and necessary. 320
“Sec. 7b-4. Affirmative duties – private education lenders. 321
“(a) For a private education loan issued on or after the applicability date of this section: 322
“(1) A private education lender or student loan servicer acting on behalf of a 323
private education lender when notified of the total and permanent disability of a student loan 324 ENGROSSED ORIGINAL
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borrower or cosigner shall release any cosigner from the obligations under the private education 325
loan. The private education lender shall not attempt to collect a payment from a cosigner after 326
being notified of the total and permanent disability of the cosigner or borrower. 327
“(2) A private education lender shall notify a student loan borrower and cosigner 328
for a private education loan if either a cosigner or the student loan borrower is released from the 329
obligations of the private education loan under this subsection within 30 days of the release. 330
“(3) A private education lender that extends a private education loan to a student 331
loan borrower shall provide the student loan borrower an option to designate an individual to 332
have the legal authority to act on behalf of the student loan borrower with respect to the private 333
education loan in the event of the total and permanent disability of the student loan borrower. 334
“(4) In the event a cosigner is released from the obligations of a private education 335
loan pursuant to paragraph (1) of this subsection, the private education lender shall not require 336
the student loan borrower to obtain another cosigner on the private education loan obligation. 337
“(5) A private education lender shall not declare a default or accelerate the debt 338
against the student loan borrower on the sole basis of the release of the cosigner from the private 339
education loan obligation. 340
“(6) A private education lender shall when notified of the total and permanent 341
disability of a student loan borrower discharge the liability of the student loan borrower and 342
cosigner on the private education loan. 343 ENGROSSED ORIGINAL
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“(7) After receiving a notification pursuant to paragraph (1) of this subsection, the 344
private education lender shall not attempt to collect on the outstanding liability of the student 345
loan borrower or cosigner or monitor the disability status of the student loan borrower after the 346
date of discharge. 347
“(b) Availability of alternative repayment plans. 348
“(1) If a private education lender offers a student loan borrower flexible or 349
modified repayment options in connection with a private education loan, those flexible 350
repayment options shall be made available to all borrowers and the private education lender 351
shall: 352
“(A) Provide on its website a description of any alternative repayment 353
options offered by the private education lender for a private education loan; and 354
“(B) Establish policies and procedures to facilitate evaluation of private 355
education loan flexible repayment option requests, including providing accurate information 356
regarding any private education loan alternative repayment options that may be available to the 357
student loan borrower through a promissory note or that may have been marketed to the student 358
loan borrower through marketing materials. 359
“(2) A private education lender or a student loan servicer acting on behalf of a 360
private education lender shall consistently present and offer flexible or modified private 361
education loan repayment options to student loan borrowers with similar financial circumstances, 362
if the private education lender offers such repayment options. 363 ENGROSSED ORIGINAL
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“(c)(1) Prior to the extension of a private education loan that requires a cosigner, a private 364
education lender shall deliver the following information to the cosigner: 365
“(A) How the private education loan obligation shall appear on the 366
cosigner’s credit; 367
“(B) How the cosigner shall be notified if the private education loan 368
becomes delinquent, including how the cosigner can cure the delinquency in order to avoid 369
negative credit furnishing and loss of cosigner release eligibility; and 370
“(C) Eligibility for release of the cosigner’s obligation on the private 371
education loan, including the number of on-time payments and any other criteria required to 372
approve the release of the cosigner from the private education loan obligation. 373
“(2) Prior to offering a person a private education loan that is being used to 374
refinance an existing education loan, a private education lender shall provide the person a 375
disclosure that benefits and protections applicable to the existing loan may be lost due to the 376
refinancing. 377
“(3) The information provided pursuant to this section shall be provided on a one-378
page information sheet in a 12-point font and shall be written in simple, clear, understandable 379
and easily readable language as provided in the Plain Writing Act of 2010 (5 U.S.C. § 301, note). 380
“(d)(1) For any private education loan that obligates a cosigner, a private education 381
lender shall provide the student loan borrower and the cosigner an annual written notice 382
containing information about cosigner release, including the administrative, objective criteria the 383 ENGROSSED ORIGINAL
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private education lender requires to approve the release of the cosigner from the private 384
education loan obligation and the process for applying for cosigner release. 385
“(2) If the student loan borrower has met the applicable requirements to be 386
eligible for cosigner release, the private education lender shall send the student loan borrower 387
and the cosigner a written notification by U.S. mail, and by electronic mail when a student loan 388
borrower or cosigner has elected to receive electronic communications from the private 389
education lender, informing the student loan borrower and cosigner that the requirements to be 390
eligible for cosigner release have been met. 391
“(3) A private education lender shall provide written notice to a borrower who 392
applies for cosigner release, but whose application is incomplete. The written notice shall include 393
a description of the information needed to consider the application complete and the date by 394
which the applicant must furnish the missing information. 395
“(4)(A) Within 30 days after a student loan borrower submits a completed 396
application for cosigner release, the private education lender shall send the student loan borrower 397
and the cosigner a written notice that informs the student loan borrower and cosigner whether the 398
cosigner release application has been approved or denied. 399
“(B) If the private education lender denies the request for cosigner release, 400
the student loan borrower may request any documents or information used in the determination, 401
including the credit score threshold used by the private education lender, the student loan 402
borrower’s consumer report, the student loan borrower’s credit score, and any other documents 403 ENGROSSED ORIGINAL
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specific to the student loan borrower. The private education lender shall also provide any adverse 404
action notices required under applicable federal law if the denial is based in whole or in part on 405
any information contained in a consumer report. 406
“(5) In response to a written or oral request for cosigner release, a private 407
education lender shall provide the information described in paragraph (1) of this subsection. 408
“(6) A private education lender shall not impose any restriction that permanently 409
bars a student loan borrower from qualifying for cosigner release, including restricting the 410
number of times a student loan borrower may apply for cosigner release. 411
“(7)(A) A private education lender shall not impose any negative consequences 412
on a student loan borrower or cosigner during the 60 days following the issuance of the notice 413
required pursuant to paragraph (3) of this subsection or until the private education lender makes 414
a final determination about a borrower’s cosigner release application. 415
“(B) For the purpose of this paragraph, the term “negative consequences” 416
includes the imposition of additional eligibility criteria, negative credit reporting, lost eligibility 417
for cosigner release, late fees, interest capitalization, or other financial penalty. 418
“(8)(A) For a private education loan executed after the applicable date of this 419
section, a private education lender shall not require more than 12 consecutive, on-time payments 420
as a requirement for cosigner release. 421
“(B) A student loan borrower who has paid the equivalent of 12 months of 422
principal and interest payments within any 12-month period shall be considered to have satisfied 423 ENGROSSED ORIGINAL
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a consecutive, on-time payment requirement even if the student loan borrower has not made 424
payments monthly during the 12-month period. 425
“(9) If a student loan borrower or cosigner requests a change in terms that restarts 426
the counting of consecutive, on-time payments required for cosigner release, the private 427
education lender shall notify the student loan borrower and cosigner in writing of the impact of 428
the change and provide the student loan borrower or the cosigner the right to withdraw or reverse 429
the request to avoid that impact. 430
“(10)(A) A student loan borrower shall have the right to request a reconsideration 431
of a private education lender’s denial of a request for cosigner release, and the private education 432
lender shall permit the student loan borrower to submit additional documentation evidencing the 433
borrower’s ability to meet the payment obligations. 434
“(B) The student loan borrower may request review of the cosigner release 435
determination by a different employee than the employee who made the original determination. 436
“(11)(A) A private education lender shall establish and maintain a comprehensive 437
record-management system (“record-management system”) reasonably designed to ensure the 438
accuracy, integrity, and completeness of data and other information about cosigner release 439
applications and compliance with applicable District and federal laws, including the Equal Credit 440
Opportunity Act (15 U.S.C. § 1691 et seq.) and the Fair Credit Reporting Act (15 U.S.C. § 1681 441
et seq.). 442
“(B) The record-management system shall also include the: 443 ENGROSSED ORIGINAL
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“(i) Number of cosigner release applications received; 444
“(ii) Approval and denial rate; and 445
“(iii) primary reasons for any denial. 446
“(e)(1) A private education lender shall provide a cosigner with access to all documents 447
or records related to the cosigned private education loan that are available to the student loan 448
borrower. 449
“(2) If a private education lender provides electronic access to documents and 450
records for a student loan borrower, it shall provide the equivalent electronic access to the 451
cosigner. 452
“(3) Upon written notice from the student loan borrower or cosigner, the private 453
education lender may redact or withhold contact information for the student loan borrower and 454
cosigner. 455
“Sec. 7b-5. Enforcement. 456
“(a) In addition to complying with the requirements of the New Student Loan Borrower 457
Bill of Rights Amendment Act of 2024, as approved by the Committee on Business and 458
Economic Development on June 17, 2024 (Committee print of Bill 25-37), a student loan 459
servicer shall comply with all applicable federal laws relating to student loan servicing, as from 460
time to time amended, and the regulations promulgated pursuant to those federal laws. 461
“(b) A violation of section 7b-1 or 7b-3 is an unfair or deceptive trade practice pursuant 462
to D.C. Official Code § 28-3904. 463 ENGROSSED ORIGINAL
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“(c) Any person who suffers damage as a result of the failure of a student loan servicer or 464
private education lender to comply with sections 7b, 7b-1, 7b-2, 7b-3, 7b-4, or 7b-5(a) may bring 465
an action on their own behalf and on behalf of a similarly situated class of consumers against that 466
student loan servicer or private education lender to recover or obtain: 467
“(1) Actual damages, but in no case shall the total award of damages be less than 468
$500 per plaintiff, per violation; 469
“(2) An order enjoining the methods, acts, or practices; 470
“(3) Restitution of property; 471
“(4) Punitive damages; 472
“(5) Attorney’s fees; or 473
“(6) Any other relief that the court considers proper. 474
“(d) In addition to any other remedies provided by this section or otherwise provided by 475
law, whenever it is proven by a preponderance of the evidence that a student loan servicer or 476
private education lender has engaged in conduct that substantially interferes with a student 477
borrower’s right to an alternative payment arrangement, loan forgiveness, cancellation, or 478
discharge, or any other financial benefit, as established under the terms of a student loan 479
borrower’s promissory note or under the Higher Education Act of 1965 (20 U.S.C. § 1070a et 480
seq.), (“Higher Education Act”), as from time to time amended, and regulations promulgated 481
pursuant to the Higher Education Act, the court shall award treble actual damages to the plaintiff, 482
but in no case shall the award of damages be less than $1,500 per violation. 483 ENGROSSED ORIGINAL
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“(e) The remedies provided in this section are not the exclusive remedies available to a 484
student loan borrower or cosigner, nor must the student loan borrower exhaust any administrative 485
remedies provided in this section or any other applicable law before proceeding pursuant to this 486
section. 487
“(f) The Attorney General may bring an action for any violation of sections 7b, 7b-1, 7b-488
2, 7b-3, 7b-4 or 7b-5(a) under the authority granted in § 28-3909. 489
“(g) The Department shall share information on a quarterly basis related to the 490
implementation, execution, and enforcement of sections 7b, 7b-1, 7b-2, 7b-3, 7b-4 and 7b-5(a) 491
with the Office of the Attorney General. 492
(e) Section 7c is amended by striking the phrase “sections 7a and 7b.” and inserting the 493
phrase “sections 7b, 7b-1, 7b-2, 7b-3, 7b-4 and 7b-5(a).” in its place. 494
Sec. 3. Conforming amendment. 495
Section 28-3903 of the District of Columbia Official Code is amended by adding a new 496
subsection (d) to read as follows: 497
“(d) The Attorney General may bring an action pursuant to section 7b-5(f) of the 498
Department of Insurance and Securities Regulation Establishment Act of 1996, as approved by 499
the Committee on Business and Economic Development on June 17, 2024 (Committee print of 500
Bill 25-37) (“act”) for a violation of sections 7b, 7b-1, 7b-2, 7b-3, 7b-4 or 7b-5(a) of the act. 501
Sec. 4. Applicability. 502
This act shall apply as of October 1, 2024. 503 ENGROSSED ORIGINAL
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Sec. 5. Fiscal impact statement. 504
The Council adopts the fiscal impact statement in the committee report as the fiscal 505
impact statement required by section 4a of the General Legislative Procedures Act of 1975, 506
approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1-301.47a). 507
Sec. 6. Effective date. 508
This act shall take effect following approval by the Mayor (or in the event of veto by the 509
Mayor, action by the Council to override the veto) and a 30-day period of congressional review 510
as provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 511
24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(1)). 512