Justice for Student Borrowers Act

I 116TH CONGRESS 1ST SESSION H. R. 3764 To amend title 9 of the United States Code to prohibit predispute arbitration agreements that force arbitration of disputes arising from private edu- cation loans, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JULY 15, 2019 Ms. SCANLON (for herself, Mrs. DAVIS of California, Mr. CICILLINE, and Mr. NADLER) introduced the following bill; which was referred to the Com- mittee on the Judiciary A BILL To amend title 9 of the United States Code to prohibit predispute arbitration agreements that force arbitration of disputes arising from private education loans, and for other purposes. 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 ‘‘Justice for Student 4 Borrowers Act’’. 5 SEC. 2. PURPOSE. 6 The purpose of this Act is to— 7 VerDate Sep 11 2014 21:49 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3764.IH H3764 kjohnson on DSK79L0C42 with BILLS 2 •HR 3764 IH (1) prohibit private educational lenders from 1 using predispute arbitration agreements in their pri- 2 vate education loans; and 3 (2) to prohibit private educational lenders from 4 using predispute joint-action waivers in their private 5 education loans. 6 SEC. 3. ARBITRATION OF PRIVATE EDUCATION LOAN DIS- 7 PUTES. 8 (a) IN GENERAL.—Title 9 of the United States Code 9 is amended by adding at the end the following: 10 ‘‘CHAPTER 4—ARBITRATION OF PRIVATE 11 EDUCATION LOAN DISPUTES 12 ‘‘401. Definitions. ‘‘402. No validity or enforceability. ‘‘§ 401. Definitions 13 ‘‘In this chapter— 14 ‘‘(1) the term ‘private education loan’ has the 15 meaning given that term under section 140 of the 16 Truth in Lending Act; 17 ‘‘(2) the term ‘predispute arbitration agree- 18 ment’ means an agreement to arbitrate a dispute 19 that has not yet arisen at the time of the making 20 of the agreement; and 21 ‘‘(3) the term ‘predispute joint-action waiver’ 22 means an agreement, whether or not part of a 23 predispute arbitration agreement, that would pro- 24 VerDate Sep 11 2014 21:49 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3764.IH H3764 kjohnson on DSK79L0C42 with BILLS 3 •HR 3764 IH hibit, or waive the right of, one of the parties to the 1 agreement to participate in a joint, class, or collec- 2 tive action in a judicial, arbitral, administrative, or 3 other forum, concerning a dispute that has not yet 4 arisen at the time of the making of the agreement. 5 ‘‘§ 402. No validity or enforceability 6 ‘‘(a) IN GENERAL.—Notwithstanding any other pro- 7 vision of this title, no predispute arbitration agreement or 8 predispute joint-action waiver shall be valid or enforceable 9 with respect to a dispute relating to a private education 10 loan. 11 ‘‘(b) APPLICABILITY.— 12 ‘‘(1) IN GENERAL.—An issue as to whether this 13 chapter applies with respect to a dispute shall be de- 14 termined under Federal law. The applicability of this 15 chapter to an agreement to arbitrate and the validity 16 and enforceability of an agreement to which this 17 chapter applies shall be determined by a court, rath- 18 er than an arbitrator, irrespective of whether the 19 party resisting arbitration challenges the arbitration 20 agreement specifically or in conjunction with other 21 terms of the contract containing such agreement, 22 and irrespective of whether the agreement purports 23 to delegate such determinations to an arbitrator. 24 VerDate Sep 11 2014 21:49 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3764.IH H3764 kjohnson on DSK79L0C42 with BILLS 4 •HR 3764 IH ‘‘(2) COLLECTIVE BARGAINING AGREEMENTS.— 1 Nothing in this chapter shall apply to any arbitra- 2 tion provision in a contract between an employer and 3 a labor organization or between labor organizations, 4 except that no such arbitration provision shall have 5 the effect of waiving the right of a worker to seek 6 judicial enforcement of a right arising under a provi- 7 sion of the Constitution of the United States, a 8 State constitution, or a Federal or State statute, or 9 public policy arising therefrom.’’. 10 (b) TECHNICAL AND CONFORMING AMENDMENTS.— 11 (1) IN GENERAL.—Title 9 of the United States 12 Code is amended— 13 (A) in section 1 by striking ‘‘of seamen,’’ 14 and all that follows through ‘‘interstate com- 15 merce,’’ and inserting in its place ‘‘of individ- 16 uals, regardless of whether such individuals are 17 designated as employees or independent con- 18 tractors for other purposes’’; 19 (B) in section 2 by inserting ‘‘or as other- 20 wise provided in chapter 4’’ before the period at 21 the end; 22 (C) in section 208— 23 (i) in the section heading by striking 24 ‘‘CHAPTER 1; RESIDUAL APPLICA- 25 VerDate Sep 11 2014 21:49 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3764.IH H3764 kjohnson on DSK79L0C42 with BILLS 5 •HR 3764 IH TION’’ and inserting ‘‘APPLICATION’’; 1 and 2 (ii) by adding at the end the fol- 3 lowing: ‘‘This chapter applies to the extent 4 that this chapter is not in conflict with 5 chapter 4.’’; and 6 (D) in section 307— 7 (i) in the section heading by striking 8 ‘‘CHAPTER 1; RESIDUAL APPLICA- 9 TION’’ and inserting ‘‘APPLICATION’’; 10 and 11 (ii) by adding at the end the fol- 12 lowing: ‘‘This chapter applies to the extent 13 that this chapter is not in conflict with 14 chapter 4.’’. 15 (2) TABLE OF SECTIONS.— 16 (A) CHAPTER 2.—The table of sections of 17 chapter 2 of title 9, United States Code, is 18 amended by striking the item relating to section 19 208 and inserting the following: 20 ‘‘208. Application.’’. (B) CHAPTER 3.—The table of sections of 21 chapter 3 of title 9, United States Code, is 22 amended by striking the item relating to section 23 307 and inserting the following: 24 ‘‘307. Application.’’. VerDate Sep 11 2014 21:49 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6211 E:\BILLS\H3764.IH H3764 kjohnson on DSK79L0C42 with BILLS 6 •HR 3764 IH (3) TABLE OF CHAPTERS.—The table of chap- 1 ters of title 9, United States Code, is amended by 2 adding at the end the following: 3 ‘‘4. Arbitration of private education loan disputes’’. SEC. 4. EFFECTIVE DATE. 4 This Act, and the amendments made by this Act, 5 shall take effect on the date of enactment of this Act and 6 shall apply with respect to any dispute or claim that arises 7 or accrues on or after such date. 8 Æ VerDate Sep 11 2014 21:49 Jul 23, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6301 E:\BILLS\H3764.IH H3764 kjohnson on DSK79L0C42 with BILLS