Senate enacts Vitelli’s bill to curtail predatory student loan practices

AUGUSTA — The Maine Senate unanimously voted to enact a bill from Sen. Eloise Vitelli, D-Arrowsic, that would protect Mainers from predatory student loan practices.

LD 1507, “An Act to Establish a Student Loan Bill of Rights To License and Regulate Student Loan Servicers,” creates a “Student Loan Bill of Rights,” which strengthens consumer protection laws when it comes to student debt.

“Protecting Mainers from predatory lending and harmful debt is essential to growing our workforce and strengthening our economy. LD 1507 is an opportunity to do some good for Maine students and families,” said Sen. Vitelli. “I am pleased that lawmakers could come together and pass this bill. It is certainly long overdue.”

This legislation creates a “Student Loan Bill of Rights,” a statute that makes several changes within the Maine Bureau of Consumer Credit Protection (BCCP). The amended version of the bill does three things: it creates a registration procedure for loan services, which requires they submit an application to the Superintendent Maine BCCP for approval; it identifies prohibited acts, including misleading student loan borrowers and fraud, and requires loan servicers comply with federal law; and finally, it allows the Superintendent to investigate student loan servicers to ensure compliance with the law.

According to the federal Consumer Financial Protection Bureau (CFPB), more than 40 million borrowers have student loan debt nationwide, with a total volume of over $1.4 trillion of outstanding debt. In Maine, the average student debt load is nearly $30,000, with many Mainers owing far more than that. Predatory lending is only exacerbating this debt crisis.

Last week, LD 1507 passed the Senate in a vote of 20-15. It will now head to the governor, who has 10 days to sign it, veto it, or allow it to become law without his signature.

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