Colorado § 5-20-204 - Cosigner disclosures.

§ 5-20-204. Cosigner disclosures.

(1) Before extending a private education credit obligation that requires a cosigner, a private education creditor shall disclose to the cosigner:

(a) How the private education credit obligation will appear on the cosigner's credit;

(b) How the cosigner will be notified if the private education credit obligation becomes delinquent, including how the cosigner can cure the delinquency in order to avoid negative credit furnishing and loss of cosigner release eligibility; and

(c) Eligibility for release of the cosigner's obligation on the private education credit obligation, including the number of on-time payments and any other criteria required to approve the release of the cosigner from the credit obligation.

(2) For any private education credit obligation that obligates a cosigner, a creditor shall provide the private education credit borrower and the cosigner an annual written notice containing information about cosigner release, including the administrative, objective criteria the creditor requires to approve the release of the cosigner from the credit obligation and the process for applying for cosigner release. If the private education credit borrower has met the applicable payment requirement to be eligible for cosigner release, the creditor shall send the private education credit borrower and the cosigner a written notification by mail, and by electronic mail if a private education credit borrower or cosigner has elected to receive electronic communications from the creditor, informing the private education credit borrower and cosigner that the payments requirement to be eligible for cosigner release has been met. The notification must also include information about any additional criteria to qualify for cosigner release and the procedure to apply for cosigner release.

(3) A creditor shall provide written notice to a private education credit borrower who applies for cosigner release but whose application is incomplete. The written notice must include a description of the information needed to consider the application complete and the date by which the applicant must furnish the missing information in order to complete the application.

(4) Within thirty days after a private education credit borrower submits a completed application for cosigner release, the creditor shall send the private education credit borrower and cosigner a written notice that informs the private education credit borrower and cosigner whether the creditor has approved or denied the cosigner release application. If the creditor denies a request for cosigner release, the private education credit borrower may request copies of any documents or information used in the determination, including the credit score threshold used by the creditor, the private education credit borrower's consumer report, the private education credit borrower's credit score, and any other documents or information specific to the private education credit borrower. The creditor shall also provide any adverse action notices required under applicable federal law if the denial is based in whole or in part on any information contained in a consumer report.

(5) In response to a written or oral request by the private education credit borrower for cosigner release, a creditor shall provide to the private education credit borrower the information described in subsection (2) of this section.

Source: L. 2021: Entire part added, (SB 21-057), ch. 378, p. 2520, § 5, effective June 29. L. 2023: Entire section amended, (SB 23-248), ch. 360, p. 2158, § 19, effective August 7.