Collector - July 2017 - 21

S

tates are often at the forefront of
financial regulation. Sometimes
a new law or requirement ends
up being a unique feature of a state's legal
framework, but often states borrow the
legislation of other states, which can signal a
new trend that may become common across
the country.
With so much happening at the state level,
it's important to keep up with changes in the
law not only to remain in compliance today,
but also to see what trends may be on the
horizon for other states that could impact
your business.

STUDENT LOAN SERVICER
LICENSING REQUIREMENTS
One emerging trend in the credit and
collection industry is an interest in licensing
requirements for student loan servicers.
Since 2015, California, Connecticut and the
District of Columbia have all passed student
loan servicer licensing requirements.
Connecticut was the first of several states
to enact a student loan servicer licensing
statute. Its Student Loan Bill of Rights
was enacted in 2015, and the servicer
requirements and prohibitions went into
effect in July 2016.
Connecticut's measure broadly defines
a "student loan servicer" as any person,
wherever located, who is responsible for the
servicing of any student education loan to
any student loan borrower.
"Servicing" is defined as:
* Receiving any scheduled periodic
payments from a student loan borrower
pursuant to the terms of a student
education loan;
* Applying the payments of principal
and interest and such other payments
with respect to the amounts received
from a student loan borrower, as may
be required pursuant to the terms of a
student education loan; and
* Performing other administrative
services with respect to a student
education loan.
"Student loan borrower" is defined as any
resident of Connecticut who has received
or agreed to pay a student education loan
or any person who shares responsibility

COLLECTOR 07.17

with such resident for repaying the student
education loan.
Exempt entities include banks, credit
unions and their wholly owned subsidiaries.
Nonexempt entities were required to obtain a
license by July 1, 2016.
Notably, the Connecticut Department
of Banking clarified that it will take a "no
action" position regarding the student
loan servicer licensing requirement for
consumer collection agencies that already
hold a Connecticut collection agency license
if the servicing of student loans is limited
to receiving payments from Connecticut
consumers on delinquent or defaulted
student loan debt for "a third party or such
person's own account if the indebtedness
was acquired from another person and the
indebtedness was either delinquent or in
default at the time it was acquired."
The department also stated that "consumer
collection agencies still remain subject to
all other requirements of and standards
imposed on student loan servicers"
pursuant to the new law. You can read that
memorandum at http://ow.ly/EdIZ30bn0aB.
For more information on the law,
review the Connecticut Act at http://
ow.ly/3fQq30bn0eT.
California recently became the second
state to enact a student loan servicer
licensing requirement, which goes into
effect July 1, 2018. The state's Student Loan
Servicing Act authorized the commissioner
of business oversight to take any necessary
actions to prepare for the July 1, 2018,
operative date, beginning on or after Jan. 1,
2017.
California's new law requires student loan
servicers located in California servicing
loans made to residents of any state, and
servicers located outside of California
servicing loans made to California residents,
to obtain a license from the commissioner of
business oversight. Under the act, "servicing"
is defined broadly to mean any of the
following activities:
* Receiving any scheduled periodic
payments from a borrower or any
notification that a borrower made
a scheduled periodic payment and
applying payments to the borrower's

21


http://www.ow.ly/EdIZ30bn0aB http://ow.ly/3fQq30bn0eT http://ow.ly/3fQq30bn0eT

Table of Contents for the Digital Edition of Collector - July 2017

Upfront
Industry News
Best Practices
FYI
Collection Tips
What’s in Your Policy?
State Licensing Laws: What’s New and Trending
The Question of Rule 68
Calendar
Honor Roll
Healthcare Data at Risk
ACA Members Meet in D.C. to Advocate on Behalf of Industry
Fixing What’s Broken
Credit Listening Considerations
U.S. Supreme Court Hands Collection Industry a Win in ACA-Supported Case
Compliance
ACA SearchPoint
Last Word
Collector - July 2017 - Cover1
Collector - July 2017 - Cover2
Collector - July 2017 - 1
Collector - July 2017 - 2
Collector - July 2017 - Upfront
Collector - July 2017 - Industry News
Collector - July 2017 - 5
Collector - July 2017 - 6
Collector - July 2017 - 7
Collector - July 2017 - Best Practices
Collector - July 2017 - 9
Collector - July 2017 - FYI
Collector - July 2017 - 11
Collector - July 2017 - Collection Tips
Collector - July 2017 - 13
Collector - July 2017 - What’s in Your Policy?
Collector - July 2017 - 15
Collector - July 2017 - 16
Collector - July 2017 - 17
Collector - July 2017 - 18
Collector - July 2017 - 19
Collector - July 2017 - State Licensing Laws: What’s New and Trending
Collector - July 2017 - 21
Collector - July 2017 - 22
Collector - July 2017 - 23
Collector - July 2017 - The Question of Rule 68
Collector - July 2017 - 25
Collector - July 2017 - 26
Collector - July 2017 - 27
Collector - July 2017 - Calendar
Collector - July 2017 - Honor Roll
Collector - July 2017 - Healthcare Data at Risk
Collector - July 2017 - 31
Collector - July 2017 - ACA Members Meet in D.C. to Advocate on Behalf of Industry
Collector - July 2017 - 33
Collector - July 2017 - 34
Collector - July 2017 - 35
Collector - July 2017 - Fixing What’s Broken
Collector - July 2017 - 37
Collector - July 2017 - 38
Collector - July 2017 - 39
Collector - July 2017 - Credit Listening Considerations
Collector - July 2017 - 41
Collector - July 2017 - U.S. Supreme Court Hands Collection Industry a Win in ACA-Supported Case
Collector - July 2017 - 43
Collector - July 2017 - Compliance
Collector - July 2017 - 45
Collector - July 2017 - ACA SearchPoint
Collector - July 2017 - 47
Collector - July 2017 - Last Word
Collector - July 2017 - Cover3
Collector - July 2017 - Cover4
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