CUNA COMMENT CALL - Proposed Regulation Z Disclosures for Private Student Loans

CUNA
April 22, 2009 | COMMENTS

The Federal Reserve Board (Fed) has issued a proposed rule to amend Regulation Z, the Truth in Lending Act, to incorporate provisions of the Higher Education Opportunity Act (HEOA) that were enacted last year. Provisions of the HEOA amend Regulation Z by including disclosure and other requirements for lenders offering private student loans that are made expressly for post-secondary educational expenses. This will exclude open-end credit; real estate-secured loans; and loans made, insured, or guaranteed by the federal government under the Higher Education Act of 1965.

This proposal also implements provisions of the HEOA that limit certain practices by creditors. This includes limitations on "co- branding" loan products with educational institutions in the marketing of private student loans. However, this will not impact credit unions that share their name with colleges or universities.

The proposal will also require creditors to obtain a self-certification form signed by the consumer before consummating the loan and requires creditors with preferred lender arrangements with educational institutions to provide certain information to those institutions.

The Fed will provide model forms for the required disclosures.

Comments in response to this proposal are due by May 26, 2009. The Fed will then review the comments and finalize the rule, which will become effective no later than February 14, 2010.

Please submit your comments to CUNA by May 15, 2009. Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Senior Vice President and Deputy General Counsel Mary Dunn at mdunn@cuna.com or to Senior Assistant General Counsel Jeff Bloch at jbloch@cuna.com; or mail them to Mary or Jeff in c/o CUNA's Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, 6th Floor, Washington, DC 20004. If commenting directly to the Fed, you must refer to Docket No. R-1353. You may also contact us if you would like a copy of the proposal or you may access it on the Internet here.

> Read the Full CUNA Comment Call with Background & Questions to Consider