Amendment ID: S2380-4-R2
2nd Redraft Amendment 4
Division of Banks
Mr. Tarr moves to amend the bill in section 1, by striking out the last paragraph of proposed section 34 of chapter 12 and inserting in place thereof the following 3 paragraphs:-
“Annually, not later than January 1, the ombudsman shall file a report on activities related to student loans and student loan servicers, as defined in section 1 of chapter 93L, with the clerks of the senate and house of representatives, the chairs of the house and senate committees on ways and means and the house and senate chairs of the joint committee on financial services.
The report shall include, but not be limited to: (i) the number of complaints received by the ombudsman from student loan borrowers and the names of the student loan servicers against whom complaints are filed; (ii) the types of complaints received by the ombudsman from student loan borrowers; (iii) the types of resolutions reached for complaints received; and (iv) recommendations to improve the effectiveness of the position of student loan ombudsman. The report shall also include an overview of any information received from the division of banks concerning: (i) the number of complaints received by the division of banks concerning student loans: (ii) the types of complaints received by the division of banks concerning student loans; (iii) the types of resolutions reached by the division of banks; and (iv) recommendations to improve the regulation, oversight and enforcement efforts of the division of banks with respect to student loan servicers. The report shall ensure that all information included in the report is aggregated and de-identified.
The ombudsman shall receive information from the division of banks to assist the ombudsman in fulfilling its duties under this section.”; and
in section 2, by striking out proposed subsection (b) of proposed section 3A of chapter 26 and inserting in place thereof the following subsection:- “(b) The unit shall share information with the student loan ombudsman to assist the ombudsman in fulfilling the ombudsman’s duties under section 34 of chapter 12.”; and
by inserting after said section 2 the following section:-
“SECTION 2A. Section 24A of chapter 93 of the General Laws is hereby amended by inserting after subsection (d) the following subsection:-
(e) A student loan servicer licensed under chapter 93L who is engaged solely in the activities of a student loan servicer shall not be required to: (i) register as a third party loan servicer pursuant to subsection (b) or (ii) obtain a debt collector license pursuant to subsection (a); provided, however, that if a student loan servicer acts, represents, operates or holds themselves out as a third party loan servicer or debt collector outside of the scope of chapter 93L, then the student loan servicer shall either register as a third party loan servicer or obtain a debt collector license, or both, as appropriate. A licensed student loan servicer who engages in third party loan servicing activities or debt collection activities within the scope of chapter 93L shall comply with all state and federal laws and regulations governing third party loan servicers and debt collection when acting in such capacity.”; and
in section 3, in proposed section 2 of proposed chapter 93L, by striking out proposed subsection (c) and inserting in place thereof the following subsection:-
“(c) A person seeking to act as a student loan servicer shall submit an application for a student loan servicer license in such form as the commissioner shall prescribe, which may include a requirement that an applicant shall provide: (i) a financial statement prepared by a certified public accountant or a public accountant; (ii) a history of criminal convictions of the applicant; (iii) a surety bond providing for coverage for the applicant in an amount determined by the commissioner and in a form prescribed by the commissioner; or (iv) any other information the commissioner considers necessary.
An application for a student loan servicer license shall be accompanied by a nonrefundable license fee and a nonrefundable investigation fee. The amount of such fees shall be determined annually by the secretary of administration and finance under section 3B of chapter 7.”; and
in said section 3, in said proposed section 2 of said proposed chapter 93L, by striking out proposed subsection (e) and inserting in place thereof the following subsection:-
“(e) A student loan servicer license shall be valid for 1 year as of a date determined by the commissioner, unless suspended or revoked, and shall not be automatically renewed.”; and
in section 3, in proposed section 5 of proposed chapter 93L, by striking out subsection (a) and inserting in place thereof the following subsection:-
“(a) If a licensee intends to carry on such business at any place in addition to the address on the license, or plans to change the location of its place of business, the licensee shall notify the commissioner, in writing, not less than 30 days before doing so, and shall pay a fee for each additional location at a reasonable cost as determined by the commissioner. Such notice shall contain the address of any additional or changed location and such other information as the commissioner may require. A student loan servicer license shall be nontransferable and nonassignable.”; and
in said section 3, in said proposed section 5 of said proposed chapter 93L, by striking out proposed subsection (c); and
in said section 3, by inserting after said proposed section 5 of said proposed chapter 93L the following section:-
“Section 5A. A student loan servicer shall comply with all applicable federal laws and regulations relating to student loan servicing. A violation of federal law or regulation shall be a violation of this chapter and the commissioner may investigate pursuant to section 6.”; and
in said section 3, in proposed section 6 of proposed chapter 93L, by inserting after the first paragraph of proposed subsection (a) of the following paragraph:-
“If there is reason to believe that a person other than a licensee has violated this chapter, the commissioner shall have the power to investigate as necessary. The commissioner may examine the person who allegedly violated this chapter and may compel the production of relevant books, records, accounts and documents.”; and
in said section 3, by striking out the words “may access”, in line 174, and inserting in place thereof the following words:- “shall have free access to the”; and
in said section 3, in proposed subsection (a) of proposed section 6 of proposed chapter 93L, by adding the following 2 paragraphs:-
“The total cost for any investigation or examination, which shall be paid by the student loan servicer not more than 30 days after the receipt of an invoice therefore, shall be in accordance with fees determined annually by the secretary of administration and finance pursuant to section 3B of chapter 7, and shall include expenses for necessary travel outside of the commonwealth to conduct the investigation or examination.
All records of investigations and reports of examinations by the commissioner, including workpapers, information derived from the reports or responses to the reports, and any copies thereof in the possession of a student loan servicer under the supervision of the commissioner, shall be confidential and privileged communications; provided, however that nothing in this subsection shall interfere with the work of the office of the student loan ombudsman established under section 34 of chapter 12 and that records shall be made public if it is in the public interest. For the purposes of this subsection, records of investigation and reports of examinations shall include records of investigation and reports of examinations conducted by a financial regulatory agency of the federal government, any other state or foreign government which are considered confidential by the agency or foreign government and which are in possession of the commissioner. In a proceeding before a court, the court may issue a protective order in appropriate circumstances to protect the confidentiality of the record and order that the record on file with the court or filed in connection with the court proceeding be sealed and that the public be excluded from any portion of the proceeding at which the record is disclosed. Copies of the reports of examination shall be furnished to a licensee for the licensee’s use only and shall not be exhibited to any other person, organization or agency without prior written approval by the commissioner. The commissioner may furnish to regulatory agencies of the federal government, other states or foreign countries, and to a law enforcement agency, information, reports and statements relating to the licensees under the commissioner’s supervision as considered appropriate.”; and
in section 5, by striking out, in line 207, the words “subsection (c) of section 3A of chapter 26” and inserting in place thereof the following words:- “section 34 of chapter 12”.