Team I
Lender and Guaranty Agency Issues

Second Meeting
February 16-17, 1999
Washington, DC

This meeting commenced at approximately 8:30 a.m. on February 16, 1999, as scheduled, and adjourned on February 17, 1999, at approximately 5:00 p.m.

All members, except Legal Services Counsel; and the facilitators were present. The meeting summary of the Team's first meeting was distributed. In order to give members ample opportunity to read that Summary, approval was not requested.

Two organizations, The Lender CEO Caucus, and The Coalition of Higher Education Assistance Organizations applied for membership on the Team. Both applications were rejected when certain members dissented.

The Team recognized that certain aspects of the "lender due diligence" regulations were reassigned from Team II to Team I.

The negotiator for the Department of Education advised the Team that two "Dear Guaranty Agency Director" letters covering the subjects "Provisions of the Higher Education Amendments of 1998 (Pub. L. 105-244) that relate to the Loan Processing and Issuance Fee paid to guaranty agencies in the Federal Family Education Loan Program" and "Provisions of the Higher Education Amendments of 1998 (Pub. L. 105-244) that relate to the Federal Fund and Operating Fund used by guaranty agencies in the Federal Family Education Loan Program" issued during the period following the Team's first meeting. He explained that such guidance was necessary for the proper administration of the program pending the development of regulation and that this guidance did not preclude consensus determination of regulations covering the same matters in the negotiated rulemaking. In addition, he stated that it may be possible in some instances to issue additional guidance documents to reflect consensus decisions reached by the Team. Following discussions, including various caucuses, all of the other team members in attendance except AACRAO prepared a letter to be sent to the Secretary of the Department of Education stating that the issuance of the guidance was potentially inconsistent with the negotiated rulemaking process and requesting that future interim guidance be kept to a minimum, and that any such guidance be subject to discussions with the Team prior to issuance.

The Department of Education distributed a document captioned "Negotiated rulemaking draft NPRM - February 11, 1999 Committee I - FFEL guaranty agency and lender issues," to be used as text for discussions during this meeting. This document consisted mainly of "category 2" and a few "category 3" items identified at the Team's first meeting. These items were discussed more thoroughly by the members and a number of understandings were reached, however, there was no attempt to specify tentative agreements.

It was agreed that the Department of Education would attempt to produce a draft text of pertinent regulations to comprise the main agenda item of the Team's third meeting, and distribute that text in time for study by members before that meeting. The Team's third meeting is scheduled for March 22, 23 and 24, 1999.

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