CFPB Student Loan Integrity and Transparency Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 2833 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 HOUSE OF REPRESENTATIVES MAY 17, 2019 Ms. PORTER (for herself, Ms. BONAMICI, Mr. SARBANES, Mr. TAKANO, Ms. ADAMS, Mr. FOSTER, Ms. PRESSLEY, and Mr. LEVIN of Michigan) intro- duced the following bill; which was referred to the Committee on Edu- cation and Labor, and in addition to the Committee on Financial Serv- ices, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 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 VerDate Sep 11 2014 04:16 May 30, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2833.IH H2833 kjohnson on DSK79L0C42 with BILLS 2 •HR 2833 IH SEC. 2. FINDINGS. 1 Congress finds the following: 2 (1) The total amount of outstanding student 3 loans just surpassed $1,500,000,000,000. 4 (2) Student loans are the biggest category of 5 consumer borrowing after mortgages. 6 (3) Since the Consumer Financial Protection 7 Act of 2010 (12 U.S.C. 5481 et seq.) established the 8 Consumer Financial Protection Bureau, the Bureau 9 has fought to ensure families receive a fair shake as 10 they strive for the American Dream. 11 (4) The Consumer Financial Protection Act of 12 2010 created a Student Loan Ombudsman at the 13 Consumer Financial Protection Bureau. In 2011, 14 the Consumer Financial Protection Bureau estab- 15 lished an Office for Students and Young Consumers, 16 led by the Student Loan Ombudsman, to assist stu- 17 dents who are mistreated or misled by predatory 18 lenders. 19 (5) Since its creation, the Office of Students 20 and Young Consumers, led by the Student Loan 21 Ombudsman, has defended military families in the 22 United States from predatory lenders and for-profit 23 colleges, and other unscrupulous businesses. 24 (6) The Office of Students and Young Con- 25 sumers helped tens of thousands of active-duty mili- 26 VerDate Sep 11 2014 04:16 May 30, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2833.IH H2833 kjohnson on DSK79L0C42 with BILLS 3 •HR 2833 IH tary service members who were being overcharged 1 for student loans, and coordinating with the United 2 States Justice Department, succeeded in returning 3 $60,000,000 to the service members, and required 4 the industry to improve its practices. 5 (7) The Office of Students and Young Con- 6 sumers has collected and analyzed hundreds of thou- 7 sands of student complaints. 8 (8) The Office of Students and Young Con- 9 sumers has recovered more than $750,000,000 on 10 behalf of defrauded students. 11 (9) The Office of Students and Young Con- 12 sumers has been instrumental in the shutdown of 13 for-profit universities and colleges that had been ac- 14 cused of predatory practices. 15 (10) The Office of Students and Young Con- 16 sumers collected data and authored a report that 17 showed large banks overcharged college students fees 18 that were higher than many of their competitors. 19 The report remained unpublished by the Administra- 20 tion until a recent FOIA request opened it to the 21 public. 22 (11) The Department of Education Office of 23 Inspector General released a concerning report on 24 February 12, 2019, that highlighted the alarming 25 VerDate Sep 11 2014 04:16 May 30, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2833.IH H2833 kjohnson on DSK79L0C42 with BILLS 4 •HR 2833 IH frequency at which student loan contractors and 1 vendors engaged in noncompliance with Federal re- 2 quirements for servicing student loans. 3 SEC. 3. DEPARTMENT OF EDUCATION STUDENT LOAN IN- 4 FORMATION. 5 Section 141(f)(3) of the Higher Education Act of 6 1965 (20 U.S.C. 1018(f)(3)) is amended— 7 (1) by redesignating subparagraphs (A) and 8 (B) as subparagraphs (B) and (C), respectively; and 9 (2) by inserting before subparagraph (B) the 10 following: 11 ‘‘(A) provide information relating to stu- 12 dent loans to the Director of the Consumer Fi- 13 nancial Protection Bureau or the ombudsman 14 of the Consumer Financial Protection Bureau 15 designated under section 1035 of the Consumer 16 Financial Protection Act of 2010 (12 U.S.C. 17 5535) as requested by the Director of the Con- 18 sumer Financial Protection Bureau or that om- 19 budsman;’’. 20 SEC. 4. STUDENT LOAN CONTRACTOR AND VENDOR AGREE- 21 MENTS. 22 Part G of title IV of the Higher Education Act of 23 1965 (20 U.S.C. 1088 et seq.) is amended by inserting 24 after section 486A the following: 25 VerDate Sep 11 2014 04:16 May 30, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2833.IH H2833 kjohnson on DSK79L0C42 with BILLS 5 •HR 2833 IH ‘‘SEC. 486B. CONTRACTOR AND VENDOR AGREEMENTS. 1 ‘‘The Secretary shall not enter into an agreement 2 with a contractor or vendor that services loans under this 3 title unless, as part of that agreement, such contractor or 4 vendor asserts that the contractor or vendor will provide 5 information to the Director of the Consumer Financial 6 Protection Bureau or the ombudsman of the Consumer Fi- 7 nancial Protection Bureau designated under section 1035 8 of the Consumer Financial Protection Act of 2010 (12 9 U.S.C. 5535) as requested by the Director of the Con- 10 sumer Financial Protection Bureau or that ombudsman.’’. 11 SEC. 5. DUTY TO PROVIDE ADEQUATE STAFFING; MEMO- 12 RANDA OF UNDERSTANDING. 13 (a) DUTY TO PROVIDE ADEQUATE STAFFING.—Sec- 14 tion 1013(a)(1) of the Consumer Financial Protection Act 15 of 2010 (12 U.S.C. 5493(a)(1)) is amended by adding at 16 the end the following: 17 ‘‘(D) DUTY TO PROVIDE ADEQUATE 18 STAFFING.—Notwithstanding subparagraph 19 (A), the Director shall ensure that each specific 20 functional unit and office described under sub- 21 sections (b), (c), (d), (e), and (g) and any other 22 unit and office with supervisory and enforce- 23 ment duties, is provided with sufficient staff to 24 carry out the functions, duties, and coordina- 25 tion of that unit or office, as applicable.’’. 26 VerDate Sep 11 2014 04:16 May 30, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2833.IH H2833 kjohnson on DSK79L0C42 with BILLS 6 •HR 2833 IH (b) MEMORANDA OF UNDERSTANDING.— 1 (1) REESTABLISHMENT OF MEMORANDA OF UN- 2 DERSTANDING.—The memoranda of understanding 3 between the Bureau of Consumer Financial Protec- 4 tion and the Department of Education entitled 5 ‘‘Memorandum of Understanding Between the Bu- 6 reau of Consumer Financial Protection and the U.S. 7 Department of Education Concerning the Sharing of 8 Information’’ (October 19, 2011) and ‘‘Memo- 9 randum of Understanding Concerning Supervisory 10 and Oversight Cooperation and Related Information 11 Sharing Between the U.S. Department of Education 12 and the Consumer Financial Protection Bureau’’ 13 (January 9, 2014)— 14 (A) shall remain in effect and may not be 15 terminated by any party to such memoranda; 16 and 17 (B) may only be amended or revised if the 18 parties to the memoranda determine that such 19 amendment or revision would promote better 20 interagency coordination to the benefit of con- 21 sumers. 22 (2) REPORT ON CURRENT MOUS.—Not later 23 than the end of the 30-day period beginning on the 24 date of enactment of this Act, the Director of the 25 VerDate Sep 11 2014 04:16 May 30, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2833.IH H2833 kjohnson on DSK79L0C42 with BILLS 7 •HR 2833 IH Bureau of Consumer Financial Protection shall sub- 1 mit to the Committee on Banking, Housing, and 2 Urban Affairs of the Senate and the Committee on 3 Financial Services of the House of Representatives 4 a report listing— 5 (A) each memorandum of understanding in 6 effect on November 24, 2017, to which the Bu- 7 reau of Consumer Financial Protection was a 8 party; 9 (B) any changes made to a memorandum 10 described in subparagraph (A) after November 11 24, 2017, including any memorandum of under- 12 standing rescinded since that date; and 13 (C) a justification for each change or re- 14 scission described in subparagraph (B). 15 (3) SEMI-ANNUAL REPORT ON MOUS.—Section 16 1016(c) of the Consumer Financial Protection Act 17 of 2010 (12 U.S.C. 5496(c)) is amended— 18 (A) in paragraph (8), by striking ‘‘and’’ at 19 the end; 20 (B) in paragraph (9), by striking the pe- 21 riod at the end and inserting a semicolon; and 22 (C) by adding at the end the following: 23 VerDate Sep 11 2014 04:16 May 30, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2833.IH H2833 kjohnson on DSK79L0C42 with BILLS 8 •HR 2833 IH ‘‘(10) a list of each memorandum of under- 1 standing in effect, as of the date on which the report 2 is submitted, to which the Bureau is a party; 3 ‘‘(11) any changes made to a memorandum of 4 understanding to which the Bureau is a party after 5 the date on which the previous report required under 6 subsection (b) was submitted; and 7 ‘‘(12) a justification for each change described 8 in paragraph (11).’’. 9 Æ VerDate Sep 11 2014 04:16 May 30, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6301 E:\BILLS\H2833.IH H2833 kjohnson on DSK79L0C42 with BILLS