PORTLAND, Maine (4/8/13)--The Maine Legislature overwhelmingly has passed a Maine Credit Union League-backed bill that would authorize providing loan insurance on supplemental student loans.
Credit unions and the league "worked cooperatively with others to help draft and pass this legislation," said league President John Murphy (Weekly Update April 5).
Murphy noted that "all of the hard work resulted in legislation that had strong bi-partisan support, and will enable more credit unions to provide a sound student lending product to consumers. Having the financial education component included reinforces our strong advocacy in this area."
The bill modifies the Finance Authority of Maine's Higher Education (FAME) Loan Program to specify that FAME may provide the insurance and renames it the Higher Education Loan and Loan Insurance Program. It also includes a financial education requirement that students must satisfy as a condition for receiving the loan.
The votes in the state House and Senate occurred last week, and the bill has been sent to Gov. Paul LePage for signature. If he signs it, the bill will become effective immediately as emergency legislation, said the league. A signature means the bill will become effective immediately as emergency legislation, said the league.
On a national level, the Credit Union National Association is developing a working group to address credit union student loan issues with the National Credit Union Administration and the Consumer Financial Protection Bureau, which has received thousands of complaints related to student loans, according CUNA President/CEO Bill Cheney, writing in last week's The Cheney Report. Only one of the 3,525 student loan-related complaints in CFPB's complaint database is against a credit union.