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ABA: The American Bankers Association
Compliance News

Agencies Issue Advisory on Education Loan Rehabilitation Programs

The Federal Reserve and FDIC issued an advisory on voluntary private education loan rehabilitation programs to alert banks to an amendment to the Fair Credit Reporting Act that was included in the S. 2155 regulatory reform law. Under the law, consumers may request that a financial institution remove a reported default regarding a private education loan under certain conditions. The law only applies to banks that have established loan rehabilitation programs. Those banks, provided they meet the statutory requirements, become 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.