1. Proposed Congressional Legislation That Would Impact Private Student Lending Mary Dwyer Pembroke Discover Financial Services

2. Current Legislative Proposals in the House and Senate H.R. 100 “Stopping Abusive Student Loan collection Practices in Bankruptcy Act of 2015” Representative Conyers (D-MI) Amends federal bankruptcy law to allow individual whose loan debt is discharged due to proving “undue hardship” to recover the costs of, and attorney’s fee for the discharge proceeding if court finds credit not substantially justified H.R. 1352 “Student Loan Borrowers’ Bill of Rights Act of 2015” Representative Wilson (D-FL) Removes all educational loans from the list of debts non-dischargeable in bankruptcy H.R. 1131 “Fairness in Student Loan Lending Act” Representative McDermott (D-WA) Permits refinancing of all federal and private loans issued before July 1, 2015, as fixed rate direct loans at interest rate equal to high yield 10-year Treasury notes plus one percent S. 729 “Fairness to Struggling Students Act of 2015” Senator Durbin (D-IL) H.R. 449 “Discharge Student Loan in Bankruptcy Act of 2015” Representative Delaney (D-MD) Identical bills: Would discharge private student loan debt in bankruptcy S. 793 “Banking on Students Emergency Loan Refinancing Act” Senator Warren (D-MA) H.R. 1434 “Bank on Student s Emergency Loan Refinancing Act” Representative Courtney (D-CT) Identical bills: Sets interest rates on private student loans back to July 1, 2013 levels Requires private education lenders to report specific loan information to Education Secretary, Congress, Treasury Secretary, and Director, CFPB, in order to assess the private education loan market S. 1309 “FAIR Student Credit Act of 2015” Senators Peters (D-MI) and Capito (R-WV) H.R. 2363 “FAIR Student Credit Act of 2015” Representative Carney (D-MD) – Referred to Financial Services Identical bills: Previously delinquent borrowers could repair their credit scores by making required consecutive payments, mirroring current practice for federal loans Available only once per loan

3. Legislation Continued S. 445 “Simplifying Access to Student Loan Information Act of 2015” Senator Shaheen (D-NH) Amends Truth in Lending Act to require private educational lenders to submit to Secretary of Education information regarding each loan made and ensure borrower privacy H.R. 2718 “The Servicemember Student Loan Affordability Act” Representative Duckworth (D-IL) S. 1557 “The Servicemember Student Loan Affordability Act” Senator Durbin (D-IL) Identical bills: Consolidation loans made while borrower on active duty and comprised of “one or more” underlying loans made prior to active duty service will be eligible for the six percent SCRA interest rate cap S. 1384 “Andrew’s Law” Senator Schumer (D-NY) Amends Truth in Lending Act to provide for discharge of private education loans upon death of student borrower H.R. 2542 “Bereaved Borrowers Bill of Rights Act of 2015” Representative Larsen (D-WA) Creates cosigner release criteria for private education loans and cosigner creditworthiness standards Following cosigner death or bankruptcy, borrower has minimum of 90 days to find new cosigner H.R. 3450 “Student Debt Repayment Fairness Act of 2015” Representative Kildee (D-MI) Amends the Truth in Lending Act to prohibit private lenders from requiring accelerated repayment of student loan following death or disability of loan cosigner H.R. 3451 “Student Loan Bankruptcy Parity Act of 2015” Representative Kildee (D-MI) Allows private student loan debt to be discharged in bankruptcy

4. Student Loan Borrower Bill of Rights S. 840 “Student Loan Borrower Bill of Rights Act of 2015” Senator Durbin (D-IL) o Amends the Truth in Lending Act to require postsecondary educational lenders to disclose at least 30 days prior to first fully amortized payment to borrower, certain information regarding terms, date of first payment, name of lender and servicer, contact information and description of all repayment plans o Requires notification to borrower that a Servicemember and Veteran Liaison is available to answer inquiries regarding servicemember and veteran benefits related to the loans o Requires additional disclosures when borrower is 30 or 60 days late and make them aware of repayment plans o Requires CFPB to develop and issue model forms for borrowers to compare repayment plans o If long term repayment plan is not appropriate, lender may provide borrower with short-term option information and requires lenders to establish a process that enables borrowers to provide notice o Requires CFPB to develop and issue model forms to allow borrowers to compare postsecondary repayment plans, as well as forbearance and deferment options o Establishes a student loan borrower bill of rights under the Truth in Lending Act o Imposes specified notification and payment transfer and receipt obligations on transferors and transferees of student loans if the transfer of those loans results in a change of party to whom the borrower must direct communications and send payments o Prohibits student loan servicers from imposing late payment fees of finance charges on borrowers whose late payment is due to a change in the servicer’s mailing address, office, or payment handling procedures o Requires postsecondary education loan servicers, absent instructions from borrower, to apply first to interest and fees a borrower owes on the payment due date and then to the principal of the borrower’s loan that bears the highest interest rate o Allows borrowers to voluntarily increase their periodic payment amount while maintaining the right to return to their original amortization schedule at any time, and requires servicers to provide borrowers with simple, online method to make payments

5. Student Loan Borrower Bill of Rights Continued o Prohibits imposition of a late fee: – on per loan basis, if borrower has multiple loans in billing group; in amount greater than 4%; before end of 15 day period beginning on payment due date; more than once for a single late payment; and if borrower fails to make singular, non-successive regularly scheduled payment; o Considers private loan rehabilitated if borrower makes nine payments over ten consecutive months, or brings loan current after charge off o Establishes procedures for student loan servicers in investigating and addressing borrower inquiries concerning perceived inaccuracies in borrower accounts o Requires student loan servicers to designate a single point of contact for borrowers who are delinquent in loan repayment; seek information regarding resolution of a repayment option, or seek to modify terms due to hardship o Requires servicers to designate a servicemember and veteran Liaison, and provide toll free number for the Liaison o Prohibits private lenders of servicers from charging-off or reporting a loan as delinquent, assigned to collection, in default, or charged-off to a credit reporting agency if borrower is on active duty in a combat zone o Requires servicers to make available to borrowers: through secure website or in writing upon request, their loan history and upon request at no charge, copies of original loan documents o Requires CFPB to promulgate rules requiring student loan serves to establish error resolution procedures o Prohibits any rights and remedies available to borrowers from being waived by any agreement, policy, or form o Requires consumer credit information required to be disclosed to borrowers under the Truth in Lending Act to be available at no charge to such borrowers o Amends the Truth in Lending Act to require a lender, prior to issuing loan for a student attending an institution of higher learning, (IHE), to obtain the IHE’s certification of: - the student’s enrollment status - the student’s cost of attendance - the difference between the cost and the student’s estimated financial assistance. This eliminates the requirement that lenders obtain a self-certification form from the loan applicant