Dean Bills for Student Debt Relief Move Forward

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U.S. Rep. Madeleine Dean, D-4th Dist., speaks in Congress.

Blogger's Note: The following was provided by the office of U.S. Rep. Madeleine Dean, D-4th Dist.

WASHINGTON – Wednesday, Rep. Madeleine Dean (PA-04) discussed the progress of two of her bills to make the student loan system fairer and more equitable.

Private Loan Disability Discharge Act (H.R. 4545)

Wednesday, the House Financial Services Committee – on which Rep. Dean sits – voted to approve her Private Loan Disability Discharge Act by a vote of 32-25. Under current law, private lenders are not required to discharge student loans for borrowers or their cosigners if the borrower becomes totally and permanently disabled – unlike federal student loans which require this discharge. The Private Loan Disability Discharge Act would require private student lenders to discharge the loan balance for both the borrower and co-signer if the borrower becomes totally and permanently disabled.

“A constituent brought this issue to our attention,” said Rep. Dean. “Her daughter had become totally disabled, and she was left with the remaining balance of her private student loans as the cosigner. The lending company said it was their policy to forgive the debt for the borrower, but not for the cosigner on the original agreement. That felt wrong – so we wrote H.R. 4545 to fix the issue. Currently there is no industry standard backed by statute to ensure student loan borrowers are protected in the case of these terrible circumstances. Today, I’m pleased to see the bill advance out of the House Financial Services Committee, and I will continue working toward a vote on the House floor.”

H.R. 4545 is endorsed by the National Disability Rights Network, The National Council on Independent Living, the U.S. International Council on Disabilities, the National Consumer Law Center (on behalf of its low-income clients), Americans for Financial Reform, the Center for Responsible Lending, and The Institute for College Access and Success (TICAS).

Ensuring Fair Legal Recourse for Private Student Loan Borrowers Act (H.R. 4544)

Language from Rep. Dean’s Ensuring Fair Legal Recourse for Private Student Loan Borrowers Act was also included in legislation passed out of the House Financial Services Committee. The Student Borrower Protections Act, sponsored by Rep. Alma Adams (NC-12), was approved by a vote of 32-26; it sets minimum standards on student loan services and student loan transactions. 

The language included from Rep. Dean’s legislation ensures that private lenders cannot force borrowers to waive their legal rights by signing loan agreements, either by agreeing in advance to arbitration, or by agreeing not to participate in a joint or class action lawsuit.

“Students shouldn’t have to sign away basic legal protections in order to borrow money and claim their education,” said Rep. Dean.

Dean Bill Promoting Fair Debt Collection for Vets Moves Forward with Unanimous Support

Submitted Photo

U.S. Rep. Madeleine Dean, left, and PA Attorney

General Josh Shapiro speak with veterans at a

Veteran's Day service in Abington.

Blogger's Note: The following was provided by the office of U.S. Rep. Madeleine Dean.

The Fair Debt Collection Practices for Servicemembers Act (H.R. 5003), sponsored by U.S. Rep. Madeleine Dean D-4th Dist.,  passed out of the Financial Services Committee with unanimous support on Nov. 13. 

This legislation addresses a variety of abusive debt collection practices targeting members of the military.

“The Financial Services Committee is taking a hard look at unscrupulous debt collection practices, and protecting our servicemembers is a top priority," said Dean. 

"This week's unanimous vote sends a clear signal - we will stand up to defend our servicemembers," said Dean.

According to the Consumer Financial Protection Bureau, (CFPB) servicemembers are subject to a variety of unfair debt collection practices:

• Contacting the servicemember’s chain of command in order to extract payment;
• Including a clause in the loan contract that the servicemember must grant the debt collector the authority to contact the chain of command;
• Threatening punishment through the Uniform Code of Military Justice, threatening to have the servicemember’s rank reduced, or threatening to have security clearances revoked.

Nearly forty percent of complaints filed by servicemembers with the CFPB concern debt collection, and servicemembers were more likely to face debt collection challenges than all other consumers.

Dean Introduces Bill to Protect Servicemembers from Abusive Debt Collection Practices

Submitted Photo

U.S. Rep. Madeleine Dean, D-4th Dist., right, with an unnamed servicemember at the World War II memorial in Washington, D.C. 

Blogger's Note: The following was provided by the office of U.S. Rep. Madeleine Dean, D-4th Dist.

U.S. Rep. Madeleine Dean has introduced the Fair Debt Collection Practices for Servicemembers Act. This legislation addresses a variety of abusive debt collection practices targeting members of the military.

“Our servicemen and servicewomen make extraordinary sacrifices on our behalf. The last thing they need is harassment from manipulative debt collectors who take advantage of their service,” said  Dean. “This legislation will put a stop to those practices.”

According to the Consumer Financial Protection Bureau, (CFPB) servicemembers are subject to a variety of unfair debt collection practices:

• Contacting the servicemember’s chain of command in order to extract payment;
• Including a clause in the loan contract that the servicemember must grant the debt collector the authority to contact the chain of command;
• Threatening punishment through the Uniform Code of Military Justice, threatening to have the servicemember’s rank reduced, or threatening to have security clearances revoked.

The problem is significant. 

Nearly forty percent of complaints filed by servicemembers with the CFPB concern debt collection, and servicemembers were more likely to face debt collection challenges than all other consumers.