CFPB Student Loan Integrity and Transparency Act of 2019

II 116TH CONGRESS 1ST SESSION S. 720 To require the student loan ombudsman of the Department of Education to provide student loan data to the Bureau of Consumer Financial Protection, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 7, 2019 Mr. UDALL (for himself, Ms. WARREN, Mr. BLUMENTHAL, Mr. BROWN, Mr. VAN HOLLEN, Mr. SCHATZ, Ms. HARRIS, Ms. KLOBUCHAR, Ms. DUCKWORTH, and Mr. MENENDEZ) introduced the following bill; which was read twice and referred to the Committee on Health, Education, Labor, and Pensions A BILL To require the student loan ombudsman of the Department of Education to provide student loan data to the Bureau of Consumer Financial Protection, and for other pur- poses. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘CFPB Student Loan 4 Integrity and Transparency Act of 2019’’. 5 SEC. 2. FINDINGS. 6 Congress finds the following: 7 VerDate Sep 11 2014 01:30 Mar 19, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S720.IS S720 kjohnson on DSK79L0C42 with BILLS 2 •S 720 IS (1) The total amount of outstanding student 1 loans just surpassed $1,500,000,000,000. 2 (2) Student loans are the biggest category of 3 consumer borrowing after mortgages. 4 (3) Since the Consumer Financial Protection 5 Act of 2010 (12 U.S.C. 5481 et seq.) established the 6 Consumer Financial Protection Bureau, the Bureau 7 has fought to ensure families receive a fair shake as 8 they strive for the American Dream. 9 (4) The Consumer Financial Protection Act of 10 2010 established the Consumer Financial Protection 11 Bureau’s Office of Students and Young Consumers 12 in 2012 to assist students who are mistreated or 13 misled by predatory lenders. 14 (5) Since its creation, the Office of Students 15 and Young Consumers, led by the Student Loan 16 Ombudsman, has defended military families in the 17 United States from predatory lenders and for-profit 18 colleges, and other unscrupulous businesses. 19 (6) The Office of Students and Young Con- 20 sumers helped tens of thousands of active-duty mili- 21 tary service members who were being overcharged 22 for student loans, and coordinating with the United 23 States Justice Department, succeeded in returning 24 VerDate Sep 11 2014 01:30 Mar 19, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S720.IS S720 kjohnson on DSK79L0C42 with BILLS 3 •S 720 IS $60,000,000 to the service members, and required 1 the industry to improve its practices. 2 (7) The Office of Students and Young Con- 3 sumers has collected and analyzed hundreds of thou- 4 sands of student complaints. 5 (8) The Office of Students and Young Con- 6 sumers has recovered more than $750,000,000 on 7 behalf of defrauded students. 8 (9) The Office of Students and Young Con- 9 sumers has been instrumental in the shutdown of 10 for-profit universities and colleges that had been ac- 11 cused of predatory practices. 12 (10) The Office of Students and Young Con- 13 sumers collected data and authored a report that 14 showed large banks overcharged college students fees 15 that were higher than many of their competitors. 16 The report remained unpublished by the Administra- 17 tion until a recent FOIA request opened it to the 18 public. 19 (11) The Department of Education Office of 20 Inspector General released a concerning report on 21 February 12, 2019, that highlighted the alarming 22 frequency at which student loan contractors and 23 vendors engaged in noncompliance with Federal re- 24 quirements for servicing student loans. 25 VerDate Sep 11 2014 01:30 Mar 19, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S720.IS S720 kjohnson on DSK79L0C42 with BILLS 4 •S 720 IS SEC. 3. DEPARTMENT OF EDUCATION STUDENT LOAN IN- 1 FORMATION. 2 Section 141(f)(3) of the Higher Education Act of 3 1965 (20 U.S.C. 1018(f)(3)) is amended— 4 (1) by redesignating subparagraphs (A) and 5 (B) as subparagraphs (B) and (C), respectively; and 6 (2) by inserting before subparagraph (B) the 7 following: 8 ‘‘(A) provide information relating to stu- 9 dent loans to the Director of the Consumer Fi- 10 nancial Protection Bureau or the ombudsman 11 of the Consumer Financial Protection Bureau 12 designated under section 1035 of the Consumer 13 Financial Protection Act of 2010 (12 U.S.C. 14 5535) as requested by the Director of the Con- 15 sumer Financial Protection Bureau or that om- 16 budsman;’’. 17 SEC. 4. STUDENT LOAN CONTRACTOR AND VENDOR AGREE- 18 MENTS. 19 Part G of title IV of the Higher Education Act of 20 1965 (20 U.S.C. 1088 et seq.) is amended by inserting 21 after section 486A the following: 22 ‘‘SEC. 486B. CONTRACTOR AND VENDOR AGREEMENTS. 23 ‘‘The Secretary shall not enter into an agreement 24 with a contractor or vendor that services loans under this 25 title unless, as part of that agreement, such contractor or 26 VerDate Sep 11 2014 01:30 Mar 19, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S720.IS S720 kjohnson on DSK79L0C42 with BILLS 5 •S 720 IS vendor asserts that the contractor or vendor will provide 1 information to the Director of the Consumer Financial 2 Protection Bureau or the ombudsman of the Consumer Fi- 3 nancial Protection Bureau designated under section 1035 4 of the Consumer Financial Protection Act of 2010 (12 5 U.S.C. 5535) as requested by the Director of the Con- 6 sumer Financial Protection Bureau or that ombudsman.’’. 7 SEC. 5. DUTY TO PROVIDE ADEQUATE STAFFING; MEMO- 8 RANDA OF UNDERSTANDING. 9 (a) DUTY TO PROVIDE ADEQUATE STAFFING.—Sec- 10 tion 1013(a)(1) of the Consumer Financial Protection Act 11 of 2010 (12 U.S.C. 5493(a)(1)) is amended by adding at 12 the end the following: 13 ‘‘(D) DUTY TO PROVIDE ADEQUATE 14 STAFFING.—Notwithstanding subparagraph 15 (A), the Director shall ensure that each specific 16 functional unit and office described under sub- 17 sections (b), (c), (d), (e), and (g) and any other 18 unit and office with supervisory and enforce- 19 ment duties, is provided with sufficient staff to 20 carry out the functions, duties, and coordina- 21 tion of that unit or office, as applicable.’’. 22 (b) MEMORANDA OF UNDERSTANDING.— 23 (1) REESTABLISHMENT OF MEMORANDA OF UN- 24 DERSTANDING.—The memoranda of understanding 25 VerDate Sep 11 2014 01:30 Mar 19, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S720.IS S720 kjohnson on DSK79L0C42 with BILLS 6 •S 720 IS between the Bureau of Consumer Financial Protec- 1 tion and the Department of Education entitled 2 ‘‘Memorandum of Understanding Between the Bu- 3 reau of Consumer Financial Protection and the U.S. 4 Department of Education Concerning the Sharing of 5 Information’’ (October 19, 2011) and ‘‘Memo- 6 randum of Understanding Concerning Supervisory 7 and Oversight Cooperation and Related Information 8 Sharing Between the U.S. Department of Education 9 and the Consumer Financial Protection Bureau’’ 10 (January 9, 2014)— 11 (A) shall remain in effect and may not be 12 terminated by any party to such memoranda; 13 and 14 (B) may only be amended or revised if the 15 parties to the memoranda determine that such 16 amendment or revision would promote better 17 interagency coordination to the benefit of con- 18 sumers. 19 (2) REPORT ON CURRENT MOUS.—Not later 20 than the end of the 30-day period beginning on the 21 date of enactment of this Act, the Director of the 22 Bureau of Consumer Financial Protection shall sub- 23 mit to the Committee on Banking, Housing, and 24 Urban Affairs of the Senate and the Committee on 25 VerDate Sep 11 2014 01:30 Mar 19, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S720.IS S720 kjohnson on DSK79L0C42 with BILLS 7 •S 720 IS Financial Services of the House of Representatives 1 a report listing— 2 (A) each memorandum of understanding in 3 effect on November 24, 2017, to which the Bu- 4 reau of Consumer Financial Protection was a 5 party; 6 (B) any changes made to a memorandum 7 described in subparagraph (A) after November 8 24, 2017, including any memorandum of under- 9 standing rescinded since that date; and 10 (C) a justification for each change or re- 11 scission described in subparagraph (B). 12 (3) SEMI-ANNUAL REPORT ON MOUS.—Section 13 1016(c) of the Consumer Financial Protection Act 14 of 2010 (12 U.S.C. 5496(c)) is amended— 15 (A) in paragraph (8), by striking ‘‘and’’ at 16 the end; 17 (B) in paragraph (9), by striking the pe- 18 riod at the end and inserting a semicolon; and 19 (C) by adding at the end the following: 20 ‘‘(10) a list of each memorandum of under- 21 standing in effect, as of the date on which the report 22 is submitted, to which the Bureau is a party; 23 ‘‘(11) any changes made to a memorandum of 24 understanding to which the Bureau is a party after 25 VerDate Sep 11 2014 01:30 Mar 19, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S720.IS S720 kjohnson on DSK79L0C42 with BILLS 8 •S 720 IS the date on which the previous report required under 1 subsection (b) was submitted; and 2 ‘‘(12) a justification for each change described 3 in paragraph (11).’’. 4 Æ VerDate Sep 11 2014 01:30 Mar 19, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\S720.IS S720 kjohnson on DSK79L0C42 with BILLS