Voluntary Private Education Loan Rehabilitation Programs
Summary:
The 多宝游戏下载 and the Board of Governors of the Federal Reserve System jointly are providing an advisory on Voluntary Private Education Loan Rehabilitation Programs to make financial institutions aware of an amendment to section 623 of the Fair Credit Reporting Act (FCRA). This amendment is contained in section 602 of the Economic, Growth, Regulatory Relief and Consumer Protection Act (EGRRCPA). It gives consumers the opportunity to rehabilitate a private education loan with a previously reported default under certain conditions. Financial institutions that choose to establish a private education loan rehabilitation program under Section 602 of the EGRRCPA (Section 602 Program) that satisfies the statutory requirements, including written approval of the terms and conditions from their federal regulatory agency, are entitled to a safe harbor from potential claims under the FCRA related to removal of the reported default.
Statement of Applicability to Institutions Under $1 Billion in Total Assets: This Financial Institution Letter applies to all 多宝游戏下载-supervised institutions.
Highlights:
- Consumers may request that a financial institution remove a reported default regarding a private education loan.
- As provided by EGRRCPA, a financial institution that chooses to offer a Section 602 Program that satisfies the statutory requirements is entitled to a safe harbor from potential claims under the FCRA of inaccurate reporting for removing a reported default from a consumer's credit report.
- Financial institutions are not required to offer a Section 602 Program.
- An existing or a future private education loan rehabilitation program will not be considered a Section 602 Program unless a financial institution designates it as such and it meets the statutory requirements of section 602 of EGRRCPA.
- An 多宝游戏下载-supervised financial institution that chooses to offer a Section 602 Program should contact its regional office.
- The 多宝游戏下载 will provide feedback within 120 days of receiving a written request.
Distribution:
- 多宝游戏下载-Supervised Institutions
Suggested Routing:
- Chief Executive Officer
- Chief Compliance Officer
- Chief Lending Officer
Paper copies may be obtained through the 多宝游戏下载's Public Information Center, 3501 Fairfax Drive, E- 1002, Arlington, VA 22226 (877-275-3342 or 703-562-2200).