H.R. 3621 would require the Consumer Financial Protection Agency (CFPB) to establish procedures by which borrowers could rehabilitate their credit if they are delinquent or have defaulted on a private-sector education loan. Under the bill, if a borrower makes at least 9 of 10 consecutive monthly payments on time, after the date of the delinquency or default, consumer reporting agencies (CRAs) could not include adverse information related to that delinquency or default in a consumer report. Payments during the 10-month period could be interrupted and resumed without consequences for members of the U.S. Armed Forces on assignment, people residing in areas affected by disaster, and people demonstrating hardship. Finally, H.R. 3621 would require the CFPB to issue rules that regulate payment plans between private education lenders and borrowers during credit rehabilitation periods.
Using information from the CFPB, CBO expects that issuing rules and establishing procedures under the bill would require the work of 13 agency employees for one year at an average cost of $200,000 each. On that basis, CBO estimates that enacting H.R. 3621 would increase direct spending by $3 million over the 2020-2021 period. (The CFPB has permanent authority, not subject to annual appropriation, to spend amounts transferred from the Federal Reserve.)