An Act To Establish a Student Loan Bill of Rights To License and Regulate Student Loan Servicers
Sec. 1. 9-A MRSA §1-202, sub-§7, as amended by PL 2005, c. 55, §1, is further amended to read:
Sec. 2. 9-A MRSA art. 14 is enacted to read:
STUDENT LOAN BILL OF RIGHTS
§ 14-101. Short title
This Article may be known and cited as "the Student Loan Bill of Rights."
§ 14-102. Applicability
This Article applies to a person who acts as a student loan servicer in this State, except that this Article does not apply to a supervised financial organization or a financial institution holding company as defined in Title 9-B, section 1011, subsection 1, to a mutual holding company as defined in Title 9-B, section 1052, subsection 2 or to a wholly owned subsidiary of a supervised financial organization, financial institution holding company or mutual holding company.
§ 14-103. Definitions
As used in this Article, unless the context otherwise indicates, the following terms have the following meanings.
§ 14-104. Student loan ombudsman
The superintendent shall, using licensing and investigation fees collected pursuant to section 14-107, support, maintain and designate a student loan ombudsman within the Department of Professional and Financial Regulation, Bureau of Consumer Credit Protection to provide timely assistance to student loan borrowers.
The student loan ombudsman, in consultation with the superintendent, shall:
§ 14-105. Annual report
The superintendent shall submit a report by January 1st of each year to the joint standing committees of the Legislature having jurisdiction over education and cultural affairs and insurance and financial services matters. The report must include:
§ 14-106. Assistance by exempt organization; report
An exempt organization that is requested by the student loan ombudsman to provide assistance pursuant to section 14-104, subsection 8 shall provide, in a timely manner, the information requested by the ombudsman necessary to investigate and resolve a student loan borrower complaint, including the steps taken by the exempt organization to resolve the complaint, or, on its own, shall resolve, in a timely manner, the complaint and provide the ombudsman with documentation regarding the resolution. Annually, an exempt organization that is involved in the resolution of a complaint pursuant to this section shall report to the ombudsman the number of complaints received and the number of complaints resolved by the exempt organization. For purposes of this section, "exempt organization" means the Finance Authority of Maine and financial institutions exempt from this Article pursuant to section 14-107, subsection 1.
§ 14-107. Licensing of student loan servicers
A person may not act as a student loan servicer, directly or indirectly, without first obtaining a license from the superintendent pursuant to this section, unless that person is exempt from licensure pursuant to subsection 1.
(1) The applicant;
(2) Partners, if the applicant is a partnership;
(3) Members, if the applicant is a limited liability company or association; and
(4) Officers, directors and principal employees, if the applicant is a corporation.
The information submitted pursuant to this paragraph must be sufficient, as determined by the superintendent, to make the findings under subsection 3;
The superintendent may require or allow applications to be made electronically through the nationwide mortgage licensing system and registry, as defined in section 13-102, subsection 8. An applicant using that system shall pay any required processing fees.
(1) An individual, the individual is in all respects properly qualified and of good character;
(2) A partnership, each partner is in all respects properly qualified and of good character;
(3) A corporation, the president, chair of the executive committee, senior officer responsible for the corporation's business and chief financial officer or any other person who performs similar functions as determined by the superintendent, each director, each trustee and each shareholder owning 10% or more of each class of the securities of the corporation is in all respects properly qualified and of good character; or
(4) A limited liability company or association, each member is in all respects properly qualified and of good character;
Upon request by the superintendent, a student loan servicer shall make such records available or shall send such records to the superintendent by registered or certified mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt, not later than 5 business days after requested by the superintendent to do so. The superintendent may grant a licensee additional time to make such records available or to send the records to the superintendent.
An abatement of the license fee may not be made if the license is surrendered, revoked or suspended.
§ 14-108. Student loan servicers
(1) Acknowledging receipt of the written inquiry within 10 days; and
(2) Providing, within 30 days after receiving the inquiry, information relating to the inquiry and, if applicable, the action the student loan servicer will take to correct the student loan borrower's account or an explanation of the student loan servicer's position that the borrower's account is correct.
(1) As a condition of the sale, assignment or transfer, the student loan servicer shall require the new student loan servicer to honor all benefits originally represented as available to the student loan borrower during the repayment of the student education loan and preserve the availability of such benefits, including any benefits for which the student loan borrower has not yet qualified;
(2) Within 45 days after the sale, assignment or transfer, the student loan servicer shall transfer to the new student loan servicer all information regarding the student loan borrower, the account of the student loan borrower and the student education loan of the student loan borrower, including the repayment status of the student loan borrower and any benefits associated with the student education loan of the student loan borrower; and
(3) The sale, assignment or transfer of the servicing of the student education loan must be completed at least 7 days before the next payment on the loan is due.
(1) Any actual damages sustained by the borrower as result of the failure;
(2) A monetary award equal to 3 times the total amount the student loan servicer collected from the borrower;
(3) Punitive damages as the court may allow; and
(4) In the case of any successful action by the borrower to enforce the liability set out in this subsection, the costs of the action, together with reasonable attorney's fees as determined by the court.
§ 14-109. Superintendent powers and duties
(1) Retain attorneys, accountants or other professionals and specialists as examiners, auditors or investigators to conduct or assist in the conduct of examinations or investigations;
(2) Enter into agreements or relationships with other government officials or regulatory associations in order to improve efficiencies and reduce regulatory burden by sharing resources, standardized or uniform methods or procedures and documents, records, information or evidence obtained under this section;
(3) Use, hire, contract for or employ public or privately available analytical systems, methods or software to examine or investigate the licensee or person subject to this Article;
(4) Accept and rely on examination or investigation reports made by other government officials, within or without this State; and
(5) Accept audit reports made by an independent certified public accountant for the licensee or person subject to this Article in the course of that part of the examination covering the same general subject matter as the audit and may incorporate the audit report in a report of examination, report of investigation or other writing of the superintendent.
§ 14-110. Compliance with federal law
A student loan servicer shall comply with all applicable federal laws and regulations relating to student education loan servicing, including, but not limited to, the federal Truth in Lending Act, 15 United States Code, Sections 1601 to 1667f (2010), as amended, and the regulations adopted pursuant to that Act. In addition to any other remedies provided by law, a violation of that Act or regulations adopted pursuant to that Act is a violation of this section and a basis upon which the superintendent may take enforcement action pursuant to this Article.
§ 14-111. Funding
The superintendent shall internally track any license, examination and investigation fees collected pursuant to this Article and any funds received from any public or private source. The superintendent shall use these funds to cover the costs of carrying out the duties of this Article, and funds received may not be used for any other purpose.
Sec. 3. Appropriations and allocations. The following appropriations and allocations are made.
PROFESSIONAL AND FINANCIAL REGULATION, DEPARTMENT OF
Bureau of Consumer Credit Protection 0091
Initiative: Provides allocation for expenses associated with the licensing, examination and investigation of student loan servicers, including travel, training, supplies and general operating expenses.
|OTHER SPECIAL REVENUE FUNDS||2019-20||2020-21|
|OTHER SPECIAL REVENUE FUNDS TOTAL||$9,300||$18,600|
Sec. 4. Effective date. This Act takes effect January 1, 2020.