§ 5-20-205 — Cosigner release - definition

Colorado § 5-20-205

• Jurisdiction: Colorado
• Title 05: Consumer
• Art.: Colorado Student Loan Equity

Text

(1) A creditor shall not impose any
restriction that permanently bars a private education credit borrower from
qualifying for cosigner release, including restricting the number of times a private
education credit borrower may apply for cosigner release.

(2) A creditor shall not impose any negative consequences on a private
education credit borrower or cosigner during the sixty days following the issuance
of the notice required pursuant to section 5-20-204 (3) or until the creditor makes a
final determination about a private education credit borrower's cosigner release
application, whichever occurs later. As used in this subsection (2), negative
consequences includes the imposition of additional eligibility criteria, negative
credit reporting, lost eligibility for cosigner release, late fees, interest
capitalization, or other financial injury.

(3) For any private education credit obligation issued on or after June 29,
2021, a creditor shall not require proof of more than twelve consecutive, on-time
payments as part of the criteria for cosigner release. A private education credit
borrower who has paid the equivalent of twelve months of principal and interest
payments within any twelve-month period is deemed to have satisfied the
consecutive, on-time payment requirement even if the private education credit
borrower has not made payments monthly during the twelve-month period. If a
private education credit borrower or cosigner requests a change in terms that
restarts the count of consecutive, on-time payments required for cosigner release,
the creditor shall notify the private education credit borrower and cosigner in
writing of the impact of the change and provide the private education credit
borrower or cosigner the right to withdraw or reverse the request to avoid that
impact.

(4) A private education credit borrower may request an appeal of a creditor's
determination to deny a request for cosigner release, and the creditor shall permit
the private education credit borrower to submit additional documentation
evidencing the private education credit borrower's ability, willingness, and stability
to meet the payment obligations. The private education credit borrower may
request that another employee of the creditor review the cosigner release
determination.

(5) A creditor shall establish and maintain a comprehensive record
management system reasonably designed to ensure the accuracy, integrity, and
completeness of information about cosigner release applications and to ensure
compliance with applicable state and federal laws, including the federal Equal
Credit Opportunity Act, 15 U.S.C. sec. 1691 et seq., as amended, and the federal
Fair Credit Reporting Act, 15 U.S.C. sec. 1681 et seq., as amended. This system
must include the number of cosigner release applications received, the approval
and denial rate, and the primary reasons for any denial.

Legislative History

Source: L. 2021: Entire part added, (SB 21-057), ch. 378, p. 2521, � 5, effective June 29. L. 2023: Entire section amended, (SB 23-248), ch. 360, p. 2159, � 20, effective August 7.