EXPLANATION: CAPITALS INDICATE MATTER ADDE D TO EXISTING LAW .
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb0111*
HOUSE BILL 111
D3, F2, I3 2lr0815
HB 26/21 – APP & JUD (PRE–FILED) CF SB 732
By: Delegate Lopez
Requested: October 19, 2021
Introduced and read first time: January 12, 2022
Assigned to: Appropriations and Judiciary
Committee Report: Favorable with amendments
House action: Adopted
Read second time: March 2, 2022
CHAPTER ______
AN ACT concerning 1
Action to Collect a Private Education Loan – Required Documents 2
FOR the purpose of prohibiting private education lenders and private education loan 3
collectors from initiating a certain action unless the private education lenders or 4
private education loan collectors possess certain documents; requiring a private 5
education lender or private education loan collector to introduce certain information 6
in a certain action; requiring a private education loan collector to provide certain 7
information to a student loan borrower in a certain communication and on request 8
of the student loan borrower; and generally relating to documents required in an 9
action to collect a private education loan. 10
BY adding to 11
Article – Courts and Judicial Proceedings 12
Section 5–1301 through 5–1304 to be under the new subtitle “Subtitle 13. Action to 13
Collect a Private Education Loan” 14
Annotated Code of Maryland 15
(2020 Replacement Volume and 2021 Supplement) 16
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 17
That the Laws of Maryland read as follows: 18
Article – Courts and Judicial Proceedings 19
SUBTITLE 13. ACTION TO COLLECT A PRIVATE EDUCATION LOAN. 20 2 HOUSE BILL 111
5–1301. 1
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 2
INDICATED. 3
(B) (1) “COSIGNER” MEANS AN INDIVIDUAL WHO IS LIABLE FOR TH E 4
OBLIGATION OF ANOTHE R WITHOUT COMPENSATION , REGARDLESS OF HOW TH E 5
INDIVIDUAL IS DESIGN ATED IN THE AGREEMEN T WITH RESPECT TO TH AT 6
OBLIGATION. 7
(2) “COSIGNER” INCLUDES: 8
(I) AN INDIVIDUAL WHO IS LIABLE FOR AN OBLIGA TION UNDER 9
A PRIVATE EDUCATION LOAN EXTENDED TO CON SOLIDATE A BORROWER ’S 10
PREEXISTING PRIVATE EDUCATION LOANS ; AND 11
(II) AN INDIVIDUAL WHOSE S IGNATURE IS REQUESTE D AS A 12
CONDITION TO GRANT C REDIT OR TO FORBEAR FROM COLLECTION . 13
(3) “COSIGNER” DOES NOT INCLUDE THE SPOUSE OF AN INDIVID UAL 14
UNDER PARAGRAPH (1) OF THIS SUBSECTION. 15
(C) (1) “CREDITOR” MEANS: 16
(I) THE ORIGINAL CREDITOR , IF OWNERSHIP OF A PR IVATE 17
EDUCATION LOAN HAS N OT BEEN SOLD, ASSIGNED, OR TRANSFERRED ; 18
(II) THE PERSON, NONDEPOSITORY INSTIT UTION, OR TRUST 19
ENTITY THAT OWNED THE PRIVA TE EDUCATION LOAN AT THE TIME THE PRIVATE 20
EDUCATION LOAN DEFAU LTED, EVEN IF THE PERSON , NONDEPOSITORY 21
INSTITUTION, OR TRUST ENTITY DID NOT ORIGINATE TH E PRIVATE EDUCATION 22
LOAN IF THE PRIVATE EDUCATION LOAN WAS N OT SUBSEQUENTLY SOLD , 23
TRANSFERRED , OR ASSIGNED; OR 24
(III) A PERSON, NONDEPOSITORY INSTIT UTION, OR TRUST 25
ENTITY THAT PURCHASED A DEF AULTED PRIVATE EDUCA TION LOAN FOR 26
COLLECTION PURPOSES , REGARDLESS OF WHETHE R THE PERSON, NONDEPOSITORY 27
INSTITUTION, OR TRUST ENTITY : 28
1. COLLECTED THE PRIVATE EDUCATION LOAN ; 29
2. HIRED A THIRD PARTY T O COLLECT THE PRIVAT E 30
EDUCATION LOAN ; OR 31 HOUSE BILL 111 3
3. HIRED AN ATTORNEY FOR COLLECTION LITIGATIO N. 1
(2) “CREDITOR” DOES NOT INCLUDE : 2
(I) A BANK AS DEFINED IN T HE FEDERAL DEPOSIT INSURANCE 3
ACT; OR 4
(II) A FEDERAL CREDIT UNIO N OR STATE CREDIT UN ION AS 5
THOSE TERMS ARE DEFI NED IN THE FEDERAL CREDIT UNION ACT. 6
(D) “ORIGINAL CREDITOR ” MEANS THE PRIVATE ED UCATION LENDER 7
IDENTIFIED IN THE PR OMISSORY NOTE , LOAN AGREEMENT , OR LOAN CONTRACT 8
ENTERED INTO WITH A STUDENT LOAN BORROWE R OR COSIGNER. 9
(E) (1) “PRIVATE EDUCATION LEN DER” MEANS: 10
(I) A PERSON, NONDEPOSITORY INSTIT UTION, OR TRUST 11
ENTITY ENGAGED IN THE BUSIN ESS OF SECURING , MAKING, OR EXTENDING PRIVATE 12
EDUCATION LOANS ; OR 13
(II) A HOLDER OF A PRIVATE EDUCATION LOAN . 14
(2) “PRIVATE EDUCATION LEN DER” DOES NOT INCLUDE : 15
(I) A BANK AS DEFINED IN T HE FEDERAL DEPOSIT INSURANCE 16
ACT; OR 17
(II) A FEDERAL CREDIT UNION OR STATE CREDIT UNIO N AS 18
THOSE TERMS ARE DEFI NED IN THE FEDERAL CREDIT UNION ACT. 19
(F) “PRIVATE EDUCATION LOA N” MEANS AN EXTENSION O F CREDIT THAT: 20
(1) IS NOT MADE, INSURED, OR GUARANTEED UNDER TITLE IV OF 21
THE HIGHER EDUCATION ACT OF 1965; 22
(2) IS EXTENDED TO A CONS UMER EXPRESSLY , WHOLLY OR PARTLY , 23
FOR POSTSECONDARY ED UCATIONAL EXPENSES , REGARDLESS OF WHETHE R THE 24
LOAN IS PROVIDED BY THE INSTITUTION THAT THE STUDENT ATTENDS ; 25
(3) DOES NOT INCLUDE OPEN –END CREDIT OR ANY LO AN THAT IS 26
SECURED BY REAL PROP ERTY OR A DWELLING ; AND 27
(4) DOES NOT INCLUDE AN E XTENSION OF CREDIT I N WHICH THE 28
COVERED INSTITUTION IS THE CREDITOR IF: 29 4 HOUSE BILL 111
(I) THE TERM OF THE EXTEN SION OF CREDIT IS NO T MORE 1
THAN 90 DAYS; OR 2
(II) AN INTEREST RATE WILL NOT BE APPLIED TO TH E CREDIT 3
BALANCE AND THE TERM OF THE EXTENSION OF CREDIT IS NOT MORE T HAN 1 YEAR, 4
EVEN IF THE CREDIT I S PAYABLE IN MO RE THAN FOUR INSTALL MENTS. 5
(G) “PRIVATE EDUCATION LOA N COLLECTION ACTION ” MEANS A JUDICIAL 6
ACTION IN WHICH A CL AIM IS ASSERTED TO C OLLECT A PRIVATE EDU CATION LOAN. 7
(H) (1) “PRIVATE EDUCATION LOA N COLLECTOR ” MEANS A PERSON , 8
NONDEPOSITORY INSTIT UTION, OR TRUST ENTITY THAT COLLECTS OR ATT EMPTS TO 9
COLLECT ON A DEFAULT ED PRIVATE EDUCATION LOAN. 10
(2) “PRIVATE EDUCATION LOA N COLLECTOR ” DOES NOT INCLUDE : 11
(I) A BANK AS DEFINED IN T HE FEDERAL DEPOSIT INSURANCE 12
ACT; OR 13
(II) A FEDERAL CREDIT UNION OR STATE CREDIT UNION A S 14
THOSE TERMS ARE DEFI NED IN THE FEDERAL CREDIT UNION ACT. 15
(I) “STUDENT LOAN BORROWER ” MEANS AN INDIVIDUAL WHO RECEIVES OR 16
AGREES TO PAY A PRIV ATE EDUCATION LOAN . 17
5–1302. 18
(A) A PRIVATE EDUCATION LE NDER OR A PRIVATE ED UCATION LOAN 19
COLLECTOR MAY NOT INI TIATE A PRIVATE EDUC ATION LOAN COLLECTIO N ACTION 20
UNLESS THE PRIVATE E DUCATION LENDER OR P RIVATE EDUCATION LOA N 21
COLLECTOR POSSESSES ALL OF THE DOCUMENTS DESCRIBED UNDER SUBS ECTION 22
(B)(3) OF THIS SECTION. 23
(B) (1) THIS SUBSECTION APPLIES: 24
(I) TO A PRIVATE EDUCATION LOAN COLLECTION ACTI ON, 25
INCLUDING A SMALL CL AIM ACTION UNDER § 4–405 OF THIS ARTICLE , THAT IS 26
MAINTAINED BY A PRIV ATE EDUCATION LENDER OR A PRIVATE EDUCATI ON LOAN 27
COLLECTOR; AND 28
(II) REGARDLESS OF THE LEG AL STATUS OF THE TRUST ’S 29
TRUSTEE. 30
HOUSE BILL 111 5
(2) IN ADDITION TO ANY OT HER PROVISION OF LAW , A COURT MAY 1
NOT ENTER A JUDGMENT IN FAVOR OF A PRIVAT E EDUCATION LENDER O R A 2
PRIVATE EDUCATION LO AN COLLECTOR UNLESS THE PRIVATE EDUCATIO N LENDER 3
OR PRIVATE EDUCATION LOAN COLLECTO R INTRODUCES INTO EV IDENCE THE 4
DOCUMENTS SPECIFIED IN PARAGRAPH (3) OF THIS SUBSECTION I N ACCORDANCE 5
WITH THE RULES OF EV IDENCE APPLICABLE TO ACTIONS THAT ARE NOT SMALL 6
CLAIMS ACTIONS BROUG HT UNDER § 4–405 OF THIS ARTICLE. 7
(3) THE PRIVATE EDUCATION LENDER OR PRIVATE EDUCAT ION LOAN 8
COLLECTOR SHALL INTR ODUCE THE FOLLOWING EVIDENCE IN A PRIVAT E 9
EDUCATION LOAN COLLE CTION ACTION: 10
(I) THE NAME OF THE OWNER OF THE PRIVATE EDUCA TION 11
LOAN; 12
(II) THE ORIGINAL CREDITOR ’S NAME AT THE TIME O F 13
DEFAULT, IF APPLICABLE; 14
(III) IF THE ORIGINAL CREDI TOR USED AN ACCOUNT NUMBER AT 15
THE TIME OF DEFAULT , THE LAST FOUR DIGITS OF THE ORIGINAL CREDITO R’S 16
ACCOUNT NUMBER ; 17
(IV) THE AMOUNT DUE AT DEF AULT; 18
(V) AN ITEMIZATION OF INT EREST AND FEES , IF ANY, 19
INCURRED AFTER DEFAULT THAT ARE CLA IMED TO BE OWED AND WHETHER THE 20
INTEREST AND FEES WE RE IMPOSED BY THE OR IGINAL CREDITOR OR B Y 21
SUBSEQUENT OWNERS OF THE PRIVATE EDUCATIO N LOAN; 22
(VI) A RECORD OF THE DATE T HAT THE PRIVATE EDUC ATION 23
LOAN WAS INCURRED ; 24
(VII) A RECORD OF THE DATE OF TH E FIRST PARTIAL PAYM ENT 25
OR THE DATE THAT A P AYMENT WAS FIRST MIS SED, WHICHEVER IS EARLIER ; 26
(VIII) A RECORD OF THE DATE A ND AMOUNT OF THE LAS T 27
PAYMENT, IF APPLICABLE; 28
(IX) ANY PAYMENTS , SETTLEMENT , OR FINANCIAL 29
REMUNERATION OF ANY KIND PAID TO THE CREDITOR BY A GUARAN TOR, COSIGNER, 30
OR SURETY, AND THE AMOUNT OF TH E PAYMENT RECEIVED ; 31
(X) A COPY OF THE SELF –CERTIFICATION FORM A ND ANY 32
OTHER NEEDS ANALYSIS CONDUCTED BY THE ORI GINAL CREDITOR BEFOR E THE 33 6 HOUSE BILL 111
ORIGINATION OF THE L OAN, REDACTED TO WITHHOLD TH E STUDENT LOAN 1
BORROWER ’S SOCIAL SECURITY NUMBER , ALL BUT THE LAST FOU R DIGITS OF THE 2
STUDENT LOAN BORROWE R’S ACCOUNT NUMBER , AND ANY OTHER PERSON AL 3
IDENTIFYING INFORMAT ION; 4
(XI) IF APPLICABLE, THE NAMES OF ALL PER SONS THAT OWNED 5
THE PRIVATE EDUCATION LOAN AFTER THE TIME OF DEFAULT AND THE D ATE OF 6
EACH SALE OR TRANSFE R OF THE LOAN; 7
(XII) A RECORD OF ALL COLLEC TION ATTEMPTS MADE I N THE 8
IMMEDIATELY PRECEDIN G 12 MONTHS, INCLUDING THE DATE A ND TIME OF ALL 9
COMMUNICATIONS , IF APPLICABLE; 10
(XIII) A STATEMENT BY THE CRE DITOR INDICATING WHE THER 11
THE CREDITOR IS WILL ING TO RENEGOTIATE T HE TERMS OF THE DEBT ; 12
(XIV) 1. COPIES OF ALL SETTLEM ENT COMMUNICATIONS 13
MADE IN THE IMMEDIAT ELY PRECEDING 12 MONTHS, REDACTED TO WITHHOLD THE 14
STUDENT LO AN BORROWER ’S SOCIAL SECURITY NUMBER , ALL BUT THE LAST FOU R 15
DIGITS OF THE STUDEN T LOAN BORROWER ’S ACCOUNT NUMBER , AND ANY OTHER 16
PERSONAL IDENTIFYING INFORMATION ; OR 17
2. A STATEMENT THAT THE C REDITOR HAS NOT 18
ATTEMPTED TO SETTLE OR OTHERWISE RENEGOT IATE THE DEBT BEFORE FILI NG 19
THE PRIVATE EDUCATIO N LOAN COLLECTION AC TION; 20
(XV) 1. DOCUMENTATION ESTABLI SHING THAT THE 21
CREDITOR IS THE OWNE R OF THE SPECIFIC IN DIVIDUAL PRIVATE EDU CATION LOAN 22
AT ISSUE; AND 23
2. IF THE PRIVATE EDUCAT ION LOAN WAS ASSIGNE D 24
MORE THAN ONCE , A RECORD OF EACH ASS IGNMENT OR OTHER WRI TING, NOT 25
INCLUDING A WRITING PREPARED IN ANTICIPA TION OF LITIGATION , INDICATING 26
THE TRANSFER OF OWNE RSHIP OF THE INDIVID UAL PRIVATE EDUCATIO N LOAN 27
BEGINNING WITH THE O RIGINAL CREDITOR AND ENDING WITH T HE MOST RECENT 28
ADDITIONAL CREDITOR , INCLUDING: 29
A. THE ORIGINAL CREDITOR ’S ACCOUNT NUMBER , 30
REDACTED TO SHOW ONL Y THE LAST FOUR DIGI TS, FOR THE PRIVATE EDUC ATION 31
LOAN PURCHASED OR OT HERWISE ASSIGNED ; 32
B. THE DATE OF PURCHASE AND ASSIGNMENT ; AND 33
HOUSE BILL 111 7
C. THE STUDENT LOAN BORR OWER’S CORRECT NAME 1
ASSOCIATED WITH THE ORIGINAL ACCOUNT NUM BER; 2
(XVI) 1. A COPY OF ALL PAGES OF THE CONTRACT , 3
APPLICATION, OR OTHER DOCUMENT EV IDENCING THE STUDENT LOAN 4
BORROWER ’S LIABILITY FOR THE PRIVATE EDUCATION LO AN THAT: 5
A. STATES ALL TERMS AND CONDIT IONS APPLICABLE TO 6
THE PRIVATE EDUCATIO N LOAN; AND 7
B. IS REDACTED TO WITHHO LD THE STUDENT LOAN 8
BORROWER ’S SOCIAL SECURITY NUMBER , ALL BUT THE LAST FOU R DIGITS OF THE 9
STUDENT LOAN BORROWE R’S ACCOUNT NUMBER , AND ANY OTHER PERSONAL 10
IDENTIFYING INFORMAT ION; OR 11
2. IF A SIGNED CONTRACT , APPLICATION, OR OTHER 12
DOCUMENT EVIDENCING THE STUDENT LOAN BOR ROWER’S LIABILITY DOES NOT 13
EXIST, A COPY OF A DOCUMENT PROVIDED TO THE STUDENT LOAN BORROWER 14
BEFORE THE DEFAULT D EMONSTRA TING THAT THE PRIVAT E EDUCATION LOAN WAS 15
INCURRED BY THE STUD ENT LOAN BORROWER THAT: 16
A. INCLUDES ALL TERMS AND CONDIT IONS APPLICABLE 17
TO THE PRIVATE EDUCA TION LOAN; AND 18
B. IS REDACTED TO WITHHO LD THE STUDENT LOAN 19
BORROWER ’S SOCIAL SECURITY NUMBER , ALL BUT THE LAST FOU R DIGITS OF THE 20
STUDENT LOAN BORROWE R’S ACCOUNT NUMBER , AND ANY OTHER PERSON AL 21
IDENTIFYING INFORMAT ION; 22
(XVII) AN AFFIDAVIT STATING THAT A REPRESENTATIV E OF THE 23
CREDITOR: 24
1. PERSONALLY REVIEWED T HE EVIDENCE SUBMITTE D 25
TO THE COURT IN ACCORDANCE WITH THIS SUBSECTION FOR FACTUAL ACCURACY ; 26
AND 27
2. CONFIRMED THE FACTUAL ACCURACY OF : 28
A. THE ALLEGATIONS SET F ORTH IN THE COMPLAIN T; 29
B. ANY SUPPORTING AFFIDA VITS OR AFFIRMATIONS 30
FILED WITH THE COURT ; AND 31
8 HOUSE BILL 111
C. ANY NOTARI ZATIONS CONTAINED IN THE 1
SUPPORTING DOCUMENTS FILED TO THE COURT ; 2
(XVIII) AN AFFIDAVIT STATING COMPLIANCE WITH § 5–1303 3
OF THIS SUBTITLE; 4
(XIX) A STATEMENT AS TO WHET HER A DEBT IS ELIGIB LE FOR AN 5
INCOME–BASED REPAYMENT PLAN ; 6
(XX) A STATEMENT AS TO WHETHER THE DE BT IS ABLE TO BE 7
DISCHARGED IN BANKRU PTCY; AND 8
(XXI) AN AFFIDAVIT STATING : 9
1. THE DATE ON WHICH THE PRIVATE EDUCATION 10
LENDER OR PRIVATE ED UCATION LOAN COLLECT OR HAS A GOOD FAITH BELIEF 11
THAT THE APPLICABLE STATUTE OF LIMITATIO NS WILL EXPIRE; AND 12
2. THAT THE PRIVATE EDUCATIO N LENDER OR PRIVATE 13
EDUCATION LOAN COLLE CTOR HAS NOT INITIAT ED THE PRIVATE EDUCATION LO AN 14
COLLECTION ACTION AF TER THE APPLICABLE S TATUTE OF LIMITATION S HAS 15
EXPIRED. 16
5–1303. 17
(A) A PRIVATE EDUCATION LO AN COLLECTOR SHALL PROV IDE THE 18
INFORMATION DESCRIBE D UNDER § 5–1302(B)(3)(I) THROUGH (XXI) OF THIS 19
SUBTITLE IN THE FIRS T COLLECTION COMMUNI CATION WITH THE STUD ENT LOAN 20
BORROWER AND ON REQU EST OF THE STUDENT L OAN BORROWER . 21
(B) FAILURE TO PRODUCE TO A STUDENT LOAN BORROWER , ON REQUEST 22
OF THE STUDENT LOAN BORROWER , THE DOCUMENTATION DE SCRIBED IN 23
SUBSECTION (A) OF THIS SECTION IS A N UNFAIR, ABUSIVE, OR DECEPTIVE TRADE 24
PRACTICE UNDER § 13–301 OF THE COMMERCIAL LAW ARTICLE. 25
5–1304. 26
(A) A PERSON THAT SUFFERS DAMAGE AS A RESULT OF T HE FAILURE OF A 27
CREDITOR TO COMPLY W ITH § 5–1302(B)(3) OF THIS SUBTITLE MAY BRING AN 28
ACTION AGAINST THE C REDITOR TO RECOVER O R OBTAIN THE FOLLOWI NG: 29
(1) AN ORDER VACATING ANY DEFAULT JUDGMENT ENT ERED 30
AGAINST THE PERSON ; 31
HOUSE BILL 111 9
(2) A JUDGMENT IN FAVOR OF THE PERSON; 1
(3) ACTUAL DAMAGES IN AN AMOUNT NOT LESS THAN $500 PER 2
PERSON, PER VIOLATION; 3
(4) RESTITUTION OF ALL MO NEY TAKEN FROM OR PA ID BY THE 4
PERSON AFTER A JUDGM ENT WAS OBTAINED BY A CREDITOR; 5
(5) PUNITIVE DAMAGES ; 6
(6) ATTORNEY’S FEES; AND 7
(7) CORRECTION OF THE PER SON’S CREDIT REPORT ; AND 8
(8) ANY OTHER RELIEF THAT THE COURT CONSIDERS PROPER. 9
(B) IN ADDITION TO ANY JU DGMENT UNDER SUBSECT ION (A) OF THIS 10
SECTION, IF A CREDITOR OR COU NSEL REPRESENTING A CREDITOR WILLFULLY 11
FILED AN AFFIDAVIT R EQUIRED UNDER THIS T ITLE CONTAINING FALS E 12
INFORMATION , THE COURT MAY AWARD TREBLE ACTUAL DAMAGE S TO THE PERSON 13
IN AN AMOUNT NOT LES S THAN $1,500 PER PERSON FOR EACH VIOLATION. 14
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 15
October 1, 2022. 16
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.