Private Loan Disability Discharge Act of 2019

IB Union Calendar No. 565 116TH CONGRESS 2D SESSION H. R. 4545 [Report No. 116–682, Part I] To provide for the discharge of a private education loan in the case of death or total and permanent disability of a student obligor, and for other purposes. IN THE HOUSE OF REPRESENTATIVES SEPTEMBER 27, 2019 Ms. DEAN introduced the following bill; which was referred to the Committee on Financial Services, and in addition to the Committee on Ways and Means, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdic- tion of the committee concerned DECEMBER 21, 2020 Additional sponsors: Mr. CASTEN of Illinois, Mr. SHERMAN, Mr. PALLONE, and Mr. KILDEE DECEMBER 21, 2020 Reported from the Committee on Financial Services with an amendment [Strike out all after the enacting clause and insert the part printed in italic] DECEMBER 21, 2020 Committee on Ways and Means discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed [For text of introduced bill, see copy of bill as introduced on September 27, 2019] VerDate Sep 11 2014 23:56 Dec 22, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6652 E:\BILLS\H4545.RH H4545 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 4545 RH A BILL To provide for the discharge of a private education loan in the case of death or total and permanent disability of a student obligor, and for other purposes. VerDate Sep 11 2014 23:56 Dec 22, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6652 E:\BILLS\H4545.RH H4545 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 4545 RH 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 ‘‘Private Loan Disability 4 Discharge Act of 2019’’. 5 SEC. 2. PROTECTIONS FOR OBLIGORS AND COSIGNERS IN 6 CASE OF DEATH OR TOTAL AND PERMANENT 7 DISABILITY. 8 (a) IN GENERAL.—Section 140(g) of the Truth in 9 Lending Act (15 U.S.C. 1650(g)) is amended— 10 (1) in paragraph (2)— 11 (A) in the heading, by striking ‘‘IN CASE OF 12 DEATH OF BORROWER’’; 13 (B) in subparagraph (A), by inserting after 14 ‘‘of the death’’, the following: ‘‘or total and per- 15 manent disability’’; and 16 (C) in subparagraph (C), by inserting after 17 ‘‘of the death’’, the following: ‘‘or total and per- 18 manent disability’’; and 19 (2) by adding at the end the following: 20 ‘‘(3) DISCHARGE IN CASE OF DEATH OR TOTAL 21 AND PERMANENT DISABILITY OF BORROWER.—The 22 holder of a private education loan shall, when notified 23 of the death or total and permanent disability of a 24 student obligor, discharge the liability of the student 25 VerDate Sep 11 2014 23:56 Dec 22, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6203 E:\BILLS\H4545.RH H4545 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 4545 RH obligor on the loan and may not, after such notifica- 1 tion— 2 ‘‘(A) attempt to collect on the outstanding 3 liability of the student obligor; and 4 ‘‘(B) in the case of total and permanent dis- 5 ability, monitor the disability status of the stu- 6 dent obligor at any point after the date of dis- 7 charge. 8 ‘‘(4) TOTAL AND PERMANENT DISABILITY DE- 9 FINED.—For the purposes of this subsection and with 10 respect to an individual, the term ‘total and perma- 11 nent disability’ means the individual is totally and 12 permanently disabled, as such term is defined in sec- 13 tion 685.102(b) of title 34 of the Code of Federal Reg- 14 ulations. 15 ‘‘(5) PRIVATE DISCHARGE IN CASES OF CERTAIN 16 DISCHARGE FOR DEATH OR DISABILITY.—The holder 17 of a private education loan shall, when notified of the 18 discharge of liability of a student obligor on a loan 19 described under section 108(f)(5)(A) of the Internal 20 Revenue Code of 1986, discharge any liability of the 21 student obligor (and any cosigner) on any private 22 education loan which the private education loan hold- 23 er holds and may not, after such notification— 24 VerDate Sep 11 2014 23:56 Dec 22, 2020 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6203 E:\BILLS\H4545.RH H4545 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 4545 RH ‘‘(A) attempt to collect on the outstanding 1 liability of the student obligor; and 2 ‘‘(B) in the case of total and permanent dis- 3 ability, monitor the disability status of the stu- 4 dent obligor at any point after the date of dis- 5 charge.’’. 6 (b) TAX LIABILITY.—Section 108(f)(5)(A) of the Inter- 7 nal Revenue Code of 1986 (26 U.S.C. 108(f)(5)(A)) is 8 amended— 9 (1) by striking ‘‘, and before January 1, 2026’’; 10 (2) in clause (ii), by striking ‘‘or’’; 11 (3) by redesignating clause (iii) as clause (iv); 12 and 13 (4) by inserting after clause (ii) the following: 14 ‘‘(iii) pursuant to paragraph (3) or (5) 15 of section 140(g) of the Truth in Lending 16 Act, or’’. 17 (c) RULEMAKING.—The Director of the Bureau of Con- 18 sumer Financial Protection may issue rules to implement 19 the amendments made by subsection (a) as the Director de- 20 termines appropriate. 21 (d) EFFECTIVE DATE.—The amendments made by this 22 section shall take effect 1 year after the date of the enact- 23 ment of this Act. 24 VerDate Sep 11 2014 23:56 Dec 22, 2020 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6203 E:\BILLS\H4545.RH H4545 pbinns on DSKJLVW7X2PROD with BILLS Union Calendar No. 565 116TH CONGRESS 2D SESSION H. R. 4545 [Report No. 116–682, Part I] A BILL To provide for the discharge of a private education loan in the case of death or total and permanent disability of a student obligor, and for other pur- poses. DECEMBER 21, 2020 Reported from the Committee on Financial Services with an amendment DECEMBER 21, 2020 Committee on Ways and Means discharged; committed to the Committee of the Whole House on the State of the Union and ordered to be printed VerDate Sep 11 2014 23:56 Dec 22, 2020 Jkt 019200 PO 00000 Frm 00006 Fmt 6651 Sfmt 6651 E:\BILLS\H4545.RH H4545 pbinns on DSKJLVW7X2PROD with BILLS