Page:United States Statutes at Large Volume 90 Part 2.djvu/661

 PUBLIC LAW 94-482—OCT. 12, 1976

90 STAT. 2129

of insurance, and certificates of comprehensive insurance coverage to eligible lenders which are financial or credit institutions subject to examination and supervision by an agency of the United States or of amy State; " (B) receiving claims for payments under section 4 3 0 (a), examining those claims, and pursuant to regulations of the Commissioner, approving claims for payment, or requiring lenders to take additional collection action as a condition for payment of claims; and " (C) certifying to the central office when collection of defaulted loans has been completed, compromising or agreeing to the modification of any Federal claim against a borrower (pursuant to regulations of the Commissioner issued under section 4 3 2 (a)), and recommending litigation with respect to any such claim. "INSTITUTIONAL LENDERS

" SEC. 433. (a)(1) A n eligible institution may not act as an eligible 20 USC 1083. lender or originate loans under this part unless it has in effect an agreement with the Commissioner under which it agrees (A) to make such loans to no more than 50 per centum of the students in attendance at the institution who are not graduate or professional students (as defined in regulations of the Commissioner), and (B) that it will not make such a loan under this part to a student, other than a graduate or professional student (as defined in regulations of the Commissioner), who has not previously received a loan from such institution until such student has provided the institution with either (i) a statement from an eligible lender (other than an eligible institution or a State or an agency of a State or a private nonprofit agency designated by a State) that the borrower sought a loan from it and was denied such loan, or (ii) a sworn statement by the borrower that the lender from which he sought such a loan declined to provide the statement described in clause (i). " (2) Whenever the Commissioner determines that the termination of the eligible institution's status as a lender under paragraph (1) would be a hardship to the present or prospective students of the eligible institution after considering the management of that institution, the opportunities that institution provides to economically disadvantaged students, and related factors, the Commissioner shall waive the provisions of such paragraph with respect to that institution. " (b)(1) A n eligible institution shall be deemed to have originated a loan for purposes of this section if it has had delegated to it by an eligible lender a substantial portion of the functions and responsibilities normally performed by a lender prior to the making of a loan, such as interviewing the applicant for the loan, explaining the applicant's responsibilities under the loan, obtaining completion of necessary foims, obtaining necessary documentation, or verifying that the student is eligible for the loan. " (2) For purposes of this section, a loan is made or originated on the date of the first disbursement of any proceeds of the loan. "PARTICIPATION BY FEDERAL CREDIT UNIONS I N FEDERAL, STATE, AND PRIVATE STUDENT LOAN INSURANCE PROGRAMS

" SEC. 434. Notwithstanding any other provision of law. Federal 20 USC 1084. credit unions shall, pursuant to regulations of the Director of the Bureau of Federal Credit Unions, have power to make insured loans to student members in accordance with the provisions of this part

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