On July 7, the Connecticut governor signed SB 890, which requires student loan servicers of federal student loans to register with the Department of Banking commissioner and comply with various state requirements and consumer protection mandates. The act now requires, subject to certain exemptions, entities servicing federal student loans (directly or indirectly) to obtain a license from the commissioner. Private student loan servicers are also still required to obtain licenses from the commissioner, and no licensee or registrant will be permitted to use any name other than its legal name or a fictitious name approved by the commissioner. Among other things, the act’s amendments provide new definitions and outline servicer duties, responsibilities, and prohibitions. Additionally, the amendments grant the commissioner the authority to impose civil penalties for violations of the act’s provisions after providing notice and an opportunity for hearing, and permits the commissioner to “suspend, revoke or refuse to renew any registration filed pursuant to section 3 of this act if any fact or condition exists which, if it had existed at the time of filing for registration, would have precluded eligibility for such registration.” The amendments took effect July 1.
This content originally appeared in Buckley’s Infobytes blog, a collection of news and alerts covering the financial services industry. To read more or have the Infobytes weekly newsletter delivered to your inbox, please visit infobytesblog.com.