S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2071
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 22, 2019
                                ___________
 
 Introduced by M. of A. ZEBROWSKI, SEAWRIGHT, WALKER, ORTIZ, ENGLEBRIGHT,
   SIMON,  JAFFEE,  GOTTFRIED, COLTON, D'URSO, BLAKE, WRIGHT, DE LA ROSA,
   VANEL, FAHY,  PEOPLES-STOKES,  CUSICK,  L. ROSENTHAL,  GALEF,  MOSLEY,
   DINOWITZ,  TAYLOR,  SOLAGES,  HYNDMAN,  KIM,  MONTESANO,  DiPIETRO  --
   Multi-Sponsored by -- M. of A.  BRAUNSTEIN,  M. L. MILLER,  THIELE  --
   read once and referred to the Committee on Banks
 
 AN  ACT to amend the banking law, in relation to requiring the licensure
   of student loan servicers
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. The banking law is amended by adding a new article 14-A to
 read as follows:
                               ARTICLE XIV-A
                          STUDENT LOAN SERVICERS
 SECTION 710. DEFINITIONS.
         711. LICENSING.
         712. APPLICATION FOR A STUDENT LOAN SERVICER LICENSE; FEES.
         713. APPLICATION PROCESS TO RECEIVE LICENSE  TO  ENGAGE  IN  THE
                BUSINESS OF STUDENT LOAN SERVICING.
         714. CHANGES IN OFFICERS AND DIRECTORS.
         715. CHANGES IN CONTROL.
         716. GROUNDS FOR SUSPENSION OR REVOCATION OF LICENSE.
         717. BOOKS AND RECORDS; REPORTS AND ELECTRONIC FILING.
         718. RULES AND REGULATIONS.
         719. PROHIBITED PRACTICES.
         720. SERVICING STUDENT LOANS WITHOUT A LICENSE.
         721. RESPONSIBILITIES.
         722. EXAMINATIONS.
         723. PENALTIES FOR VIOLATION OF THIS ARTICLE.
         724. SEVERABILITY OF PROVISIONS.
         725. COMPLIANCE WITH OTHER LAWS.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD01465-01-9

 A. 2071                             2
 
   §  710. DEFINITIONS. 1. "APPLICANT" SHALL MEAN ANY PERSON APPLYING FOR
 A LICENSE TO BE A STUDENT LOAN SERVICER.
   2. "BORROWER" SHALL MEAN ANY RESIDENT OF THIS STATE WHO HAS RECEIVED A
 STUDENT  LOAN  OR  AGREED IN WRITING TO PAY A STUDENT LOAN OR ANY PERSON
 WHO SHARES A LEGAL OBLIGATION WITH SUCH RESIDENT FOR REPAYING A  STUDENT
 LOAN.
   3. "BORROWER BENEFIT" SHALL MEAN AN INCENTIVE OFFERED TO A BORROWER IN
 CONNECTION  WITH  THE  ORIGINATION  OF A STUDENT LOAN, INCLUDING BUT NOT
 LIMITED TO AN INTEREST RATE REDUCTION, PRINCIPAL REBATE, FEE  WAIVER  OR
 REBATE, LOAN CANCELLATION, OR COSIGNER RELEASE.
   4.  "EXEMPT ORGANIZATION" SHALL MEAN ANY BANKING ORGANIZATION, FOREIGN
 BANKING CORPORATION, NATIONAL BANK, FEDERAL SAVINGS ASSOCIATION, FEDERAL
 CREDIT UNION, OR ANY BANK, TRUST COMPANY, SAVINGS BANK, SAVINGS AND LOAN
 ASSOCIATION, OR CREDIT UNION ORGANIZED  UNDER  THE  LAWS  OF  ANY  OTHER
 STATE.
   5.  "PERSON"  SHALL  MEAN  ANY  INDIVIDUAL,  ASSOCIATION, CORPORATION,
 LIMITED LIABILITY COMPANY, PARTNERSHIP, TRUST, UNINCORPORATED  ORGANIZA-
 TION, OR ANY OTHER ENTITY.
   6.  "SERVICER" OR "STUDENT LOAN SERVICER" SHALL MEAN A PERSON LICENSED
 PURSUANT TO SECTION SEVEN HUNDRED ELEVEN OF THIS ARTICLE  TO  ENGAGE  IN
 THE BUSINESS OF SERVICING ANY STUDENT LOAN OF A BORROWER.
   7. "SERVICING" SHALL MEAN:
   (A) RECEIVING ANY PAYMENT FROM A BORROWER PURSUANT TO THE TERMS OF ANY
 STUDENT LOAN;
   (B) APPLYING ANY PAYMENT TO A BORROWER'S ACCOUNT PURSUANT TO THE TERMS
 OF  A  STUDENT  LOAN OR THE CONTRACT GOVERNING THE SERVICING OF ANY SUCH
 LOAN;
   (C) PROVIDING ANY NOTIFICATION OF AMOUNTS OWED ON A STUDENT LOAN BY OR
 ON ACCOUNT OF ANY BORROWER;
   (D) DURING A PERIOD WHEN A BORROWER IS NOT REQUIRED TO MAKE A  PAYMENT
 ON  A STUDENT LOAN, MAINTAINING ACCOUNT RECORDS FOR THE STUDENT LOAN AND
 COMMUNICATING WITH THE BORROWER REGARDING THE STUDENT LOAN ON BEHALF  OF
 THE OWNER OF THE STUDENT LOAN PROMISSORY NOTE;
   (E)  INTERACTING  WITH  A  BORROWER  WITH  RESPECT TO OR REGARDING ANY
 ATTEMPT TO AVOID DEFAULT ON THE BORROWER'S STUDENT LOAN, OR FACILITATING
 THE ACTIVITIES DESCRIBED IN PARAGRAPH (A) OR (B) OF THIS SUBDIVISION; OR
   (F) PERFORMING OTHER ADMINISTRATIVE SERVICES WITH RESPECT TO A BORROW-
 ER'S STUDENT LOAN.
   8. "STUDENT LOAN" SHALL MEAN ANY LOAN TO A BORROWER TO FINANCE POSTSE-
 CONDARY EDUCATION OR EXPENSES RELATED TO POSTSECONDARY EDUCATION.
   § 711. LICENSING. 1. NO PERSON SHALL ENGAGE IN THE BUSINESS OF SERVIC-
 ING STUDENT LOANS OWED BY ONE OR MORE BORROWERS RESIDING IN  THIS  STATE
 WITHOUT  FIRST  BEING  LICENSED  BY THE SUPERINTENDENT AS A STUDENT LOAN
 SERVICER IN ACCORDANCE WITH THIS ARTICLE AND SUCH REGULATIONS AS MAY  BE
 PRESCRIBED BY THE SUPERINTENDENT.
   2. THE LICENSING PROVISIONS OF THIS SUBDIVISION SHALL NOT APPLY TO ANY
 EXEMPT ORGANIZATION.
   §  712. APPLICATION FOR A STUDENT LOAN SERVICER LICENSE; FEES. 1.  THE
 APPLICATION FOR A LICENSE TO BE A STUDENT  LOAN  SERVICER  SHALL  BE  IN
 WRITING,  UNDER  OATH, AND IN THE FORM PRESCRIBED BY THE SUPERINTENDENT.
 NOTWITHSTANDING ARTICLE THREE OF THE STATE TECHNOLOGY LAW OR  ANY  OTHER
 LAW  TO THE CONTRARY, THE SUPERINTENDENT MAY REQUIRE THAT AN APPLICATION
 FOR A LICENSE OR ANY OTHER SUBMISSION OR APPLICATION FOR APPROVAL AS MAY
 BE REQUIRED BY THIS ARTICLE BE MADE OR EXECUTED BY ELECTRONIC  MEANS  IF
 HE  OR  SHE  DEEMS  IT  NECESSARY  TO ENSURE THE EFFICIENT AND EFFECTIVE
 ADMINISTRATION  OF  THIS  ARTICLE.  THE  APPLICATION  SHALL  INCLUDE   A

 A. 2071                             3
 
 DESCRIPTION  OF  THE ACTIVITIES OF THE APPLICANT, IN SUCH DETAIL AND FOR
 SUCH PERIODS AS THE SUPERINTENDENT MAY REQUIRE, INCLUDING:
   (A)  AN  AFFIRMATION  OF FINANCIAL SOLVENCY NOTING SUCH CAPITALIZATION
 REQUIREMENTS AS MAY BE REQUIRED BY THE  SUPERINTENDENT,  AND  ACCESS  TO
 SUCH CREDIT AS MAY BE REQUIRED BY THE SUPERINTENDENT;
   (B)  A  FINANCIAL STATEMENT PREPARED BY A CERTIFIED PUBLIC ACCOUNTANT,
 THE ACCURACY OF WHICH IS SWORN TO UNDER OATH BEFORE A NOTARY  PUBLIC  BY
 AN OFFICER OR OTHER REPRESENTATIVE OF THE APPLICANT WHO IS AUTHORIZED TO
 EXECUTE SUCH DOCUMENTS;
   (C) AN AFFIRMATION THAT THE APPLICANT, OR ITS MEMBERS, OFFICERS, PART-
 NERS, DIRECTORS AND PRINCIPALS AS MAY BE APPROPRIATE, ARE AT LEAST TWEN-
 TY-ONE YEARS OF AGE;
   (D)  INFORMATION  AS TO THE CHARACTER, FITNESS, FINANCIAL AND BUSINESS
 RESPONSIBILITY, BACKGROUND AND EXPERIENCES  OF  THE  APPLICANT,  OR  ITS
 MEMBERS,  OFFICERS,  PARTNERS, DIRECTORS AND PRINCIPALS AS MAY BE APPRO-
 PRIATE; AND
   (E) ANY ADDITIONAL DETAIL OR INFORMATION REQUIRED BY  THE  SUPERINTEN-
 DENT.
   2. AN APPLICATION TO BECOME A STUDENT LOAN SERVICER OR ANY APPLICATION
 WITH RESPECT TO A STUDENT LOAN SERVICER SHALL BE ACCOMPANIED BY A FEE AS
 PRESCRIBED PURSUANT TO SECTION EIGHTEEN-A OF THIS CHAPTER.
   §  713.  APPLICATION PROCESS TO RECEIVE LICENSE TO ENGAGE IN THE BUSI-
 NESS OF STUDENT LOAN SERVICING. 1. UPON THE FILING OF AN APPLICATION FOR
 A LICENSE, IF THE SUPERINTENDENT SHALL FIND THAT THE FINANCIAL RESPONSI-
 BILITY, EXPERIENCE, CHARACTER, AND GENERAL FITNESS OF THE APPLICANT AND,
 IF APPLICABLE, THE MEMBERS, OFFICERS, PARTNERS, DIRECTORS AND PRINCIPALS
 OF THE APPLICANT ARE SUCH AS TO COMMAND THE CONFIDENCE OF THE  COMMUNITY
 AND TO WARRANT BELIEF THAT THE BUSINESS WILL BE OPERATED HONESTLY, FAIR-
 LY,  AND EFFICIENTLY WITHIN THE PURPOSE OF THIS ARTICLE, THE SUPERINTEN-
 DENT SHALL THEREUPON ISSUE A LICENSE IN DUPLICATE TO ENGAGE IN THE BUSI-
 NESS OF SERVICING STUDENT LOANS DESCRIBED IN SECTION SEVEN  HUNDRED  TEN
 OF  THIS  ARTICLE  IN ACCORDANCE WITH THE PROVISIONS OF THIS ARTICLE. IF
 THE SUPERINTENDENT SHALL NOT SO FIND, THE SUPERINTENDENT SHALL NOT ISSUE
 A LICENSE, AND THE SUPERINTENDENT SHALL SO  NOTIFY  THE  APPLICANT.  THE
 SUPERINTENDENT SHALL TRANSMIT ONE COPY OF A LICENSE TO THE APPLICANT AND
 FILE ANOTHER COPY IN THE OFFICE OF THE DEPARTMENT OF FINANCIAL SERVICES.
 UPON  RECEIPT  OF SUCH LICENSE, A STUDENT LOAN SERVICER SHALL BE AUTHOR-
 IZED TO ENGAGE IN THE BUSINESS OF SERVICING STUDENT LOANS IN  ACCORDANCE
 WITH  THE  PROVISIONS OF THIS ARTICLE. SUCH LICENSE SHALL REMAIN IN FULL
 FORCE AND EFFECT UNTIL IT IS SURRENDERED BY THE SERVICER OR  REVOKED  OR
 SUSPENDED AS HEREINAFTER PROVIDED.
   2.  THE  SUPERINTENDENT MAY REFUSE TO ISSUE A LICENSE PURSUANT TO THIS
 ARTICLE IF HE OR SHE SHALL FIND THAT THE APPLICANT, OR ANY PERSON WHO IS
 A DIRECTOR, OFFICER, PARTNER, AGENT,  EMPLOYEE,  MEMBER  OR  SUBSTANTIAL
 STOCKHOLDER OF THE APPLICANT:
   (A)  LACKS  THE  GOOD  MORAL  CHARACTER AND GENERAL FITNESS SUCH AS TO
 WARRANT BELIEF THAT THE LICENSED  ENTITY  WOULD  BE  OPERATED  HONESTLY,
 FAIRLY AND EFFICIENTLY WITHIN THE PURPOSES OF THIS ARTICLE;
   (B) HAS HAD A LICENSE OR REGISTRATION REVOKED BY THE SUPERINTENDENT OR
 ANY OTHER REGULATOR OR JURISDICTION;
   (C)  HAS  BEEN  AN  OFFICER,  DIRECTOR, PARTNER, MEMBER OR SUBSTANTIAL
 STOCKHOLDER OF AN ENTITY WHICH HAS HAD A LICENSE OR REGISTRATION REVOKED
 BY THE SUPERINTENDENT OR ANY OTHER REGULATOR OR JURISDICTION; OR
   (D) HAS BEEN AN AGENT, EMPLOYEE, OFFICER, DIRECTOR, PARTNER OR  MEMBER
 OF  AN  ENTITY  WHICH  HAS  HAD A LICENSE OR REGISTRATION REVOKED BY THE

 A. 2071                             4
 
 SUPERINTENDENT WHERE SUCH PERSON SHALL HAVE BEEN  FOUND  BY  THE  SUPER-
 INTENDENT TO BEAR RESPONSIBILITY IN CONNECTION WITH THE REVOCATION.
   3.  THE TERM "SUBSTANTIAL STOCKHOLDER", AS USED IN THIS SECTION, SHALL
 BE DEEMED TO REFER TO A PERSON OWNING OR CONTROLLING DIRECTLY  OR  INDI-
 RECTLY TEN PER CENTUM OR MORE OF THE TOTAL OUTSTANDING STOCK OF A CORPO-
 RATION.
   §  714.  CHANGES  IN OFFICERS AND DIRECTORS. UPON ANY CHANGE OF ANY OF
 THE EXECUTIVE OFFICERS, DIRECTORS, PARTNERS OR MEMBERS  OF  ANY  STUDENT
 LOAN SERVICER, THE STUDENT LOAN SERVICER SHALL SUBMIT TO THE SUPERINTEN-
 DENT  THE  NAME,  ADDRESS, AND OCCUPATION OF EACH NEW OFFICER, DIRECTOR,
 PARTNER OR MEMBER, AND PROVIDE SUCH OTHER INFORMATION AS THE SUPERINTEN-
 DENT MAY REQUIRE.
   § 715. CHANGES IN CONTROL. 1. IT SHALL BE UNLAWFUL,  EXCEPT  WITH  THE
 PRIOR  APPROVAL  OF THE SUPERINTENDENT, FOR ANY ACTION TO BE TAKEN WHICH
 RESULTS IN A CHANGE OF CONTROL OF THE BUSINESS OF A STUDENT LOAN  SERVI-
 CER.  PRIOR  TO  ANY CHANGE OF CONTROL, THE PERSON DESIROUS OF ACQUIRING
 CONTROL OF THE BUSINESS OF A STUDENT LOAN SERVICER  SHALL  MAKE  WRITTEN
 APPLICATION  TO  THE  SUPERINTENDENT  AND  PAY  AN  APPLICATION  FEE  AS
 PRESCRIBED PURSUANT TO SECTION EIGHTEEN-A OF THIS CHAPTER TO THE  SUPER-
 INTENDENT.  THE APPLICATION SHALL CONTAIN SUCH INFORMATION AS THE SUPER-
 INTENDENT, BY RULE OR REGULATION, MAY PRESCRIBE AS NECESSARY  OR  APPRO-
 PRIATE   FOR  THE  PURPOSE  OF  MAKING  THE  DETERMINATION  REQUIRED  BY
 SUBDIVISION TWO OF THIS SECTION. SUCH INFORMATION SHALL INCLUDE, BUT NOT
 BE LIMITED TO, THE INFORMATION AND OTHER MATERIAL REQUIRED FOR A STUDENT
 LOAN SERVICER BY SUBDIVISION ONE OF SECTION SEVEN HUNDRED TWELVE OF THIS
 ARTICLE.
   2. THE SUPERINTENDENT SHALL APPROVE OR DISAPPROVE THE PROPOSED  CHANGE
 OF  CONTROL OF A STUDENT LOAN SERVICER IN ACCORDANCE WITH THE PROVISIONS
 OF SECTION SEVEN HUNDRED THIRTEEN OF THIS ARTICLE.
   3. FOR A PERIOD OF SIX MONTHS FROM THE DATE OF  QUALIFICATION  THEREOF
 AND  FOR  SUCH  ADDITIONAL  PERIOD  OF  TIME  AS  THE SUPERINTENDENT MAY
 PRESCRIBE, IN WRITING, THE PROVISIONS OF SUBDIVISIONS  ONE  AND  TWO  OF
 THIS  SECTION  SHALL  NOT APPLY TO A TRANSFER OF CONTROL BY OPERATION OF
 LAW TO THE LEGAL REPRESENTATIVE, AS HEREINAFTER DEFINED, OF ONE WHO  HAS
 CONTROL  OF  A  STUDENT  LOAN SERVICER. THEREAFTER, SUCH LEGAL REPRESEN-
 TATIVE SHALL COMPLY WITH THE PROVISIONS OF SUBDIVISIONS ONE AND  TWO  OF
 THIS SECTION. THE PROVISIONS OF SUBDIVISIONS ONE AND TWO OF THIS SECTION
 SHALL BE APPLICABLE TO AN APPLICATION MADE UNDER THIS SECTION BY A LEGAL
 REPRESENTATIVE.  THE  TERM  "LEGAL  REPRESENTATIVE", FOR THE PURPOSES OF
 THIS SUBDIVISION, SHALL MEAN A PERSON  DULY  APPOINTED  BY  A  COURT  OF
 COMPETENT  JURISDICTION  TO  ACT  AS  EXECUTOR,  ADMINISTRATOR, TRUSTEE,
 COMMITTEE, CONSERVATOR OR RECEIVER, INCLUDING A PERSON  WHO  SUCCEEDS  A
 LEGAL REPRESENTATIVE AND A PERSON ACTING IN AN ANCILLARY CAPACITY THERE-
 TO IN ACCORDANCE WITH THE PROVISIONS OF SUCH COURT APPOINTMENT.
   4.  AS  USED  IN THIS SECTION THE TERM "CONTROL" MEANS THE POSSESSION,
 DIRECTLY OR INDIRECTLY, OF THE POWER TO DIRECT OR CAUSE THE DIRECTION OF
 THE MANAGEMENT AND POLICIES OF A STUDENT LOAN SERVICER, WHETHER  THROUGH
 THE  OWNERSHIP OF VOTING STOCK OF SUCH STUDENT LOAN SERVICER, THE OWNER-
 SHIP OF VOTING STOCK OF ANY PERSON WHICH POSSESSES SUCH POWER OR  OTHER-
 WISE.    CONTROL  SHALL  BE PRESUMED TO EXIST IF ANY PERSON, DIRECTLY OR
 INDIRECTLY, OWNS, CONTROLS OR HOLDS WITH POWER TO VOTE TEN PER CENTUM OR
 MORE OF THE VOTING STOCK OF ANY STUDENT LOAN SERVICER OR OF  ANY  PERSON
 WHICH  OWNS, CONTROLS OR HOLDS WITH POWER TO VOTE TEN PER CENTUM OR MORE
 OF THE VOTING STOCK OF ANY STUDENT LOAN SERVICER, BUT NO PERSON SHALL BE
 DEEMED TO CONTROL A STUDENT LOAN SERVICER SOLELY BY REASON OF  BEING  AN
 OFFICER  OR  DIRECTOR  OF SUCH STUDENT LOAN SERVICER. THE SUPERINTENDENT

 A. 2071                             5
 
 MAY IN HIS DISCRETION, UPON THE APPLICATION OF A STUDENT  LOAN  SERVICER
 OR  ANY PERSON WHO, DIRECTLY OR INDIRECTLY, OWNS, CONTROLS OR HOLDS WITH
 POWER TO VOTE OR SEEKS TO OWN, CONTROL OR HOLD WITH POWER  TO  VOTE  ANY
 VOTING STOCK OF SUCH STUDENT LOAN SERVICER, DETERMINE WHETHER OR NOT THE
 OWNERSHIP,  CONTROL OR HOLDING OF SUCH VOTING STOCK CONSTITUTES OR WOULD
 CONSTITUTE CONTROL OF SUCH STUDENT LOAN SERVICER FOR  PURPOSES  OF  THIS
 SECTION.
   §  716. GROUNDS FOR SUSPENSION OR REVOCATION OF LICENSE. 1. THE SUPER-
 INTENDENT MAY REVOKE ANY LICENSE TO ENGAGE IN THE BUSINESS OF A  STUDENT
 LOAN  SERVICER  ISSUED  PURSUANT  TO THIS ARTICLE IF A DETERMINATION HAS
 BEEN MADE, AFTER NOTICE AND A HEARING, THAT:
   (A) A SERVICER HAS VIOLATED ANY PROVISION OF THIS ARTICLE, ANY RULE OR
 REGULATION PROMULGATED  BY  THE  SUPERINTENDENT  UNDER  AND  WITHIN  THE
 AUTHORITY OF THIS ARTICLE, OR ANY OTHER APPLICABLE LAW;
   (B)  A  SERVICER  ENGAGES  IN FRAUD, INTENTIONAL MISREPRESENTATION, OR
 GROSS NEGLIGENCE IN SERVICING A STUDENT LOAN;
   (C) THE COMPETENCE, EXPERIENCE, CHARACTER, OR GENERAL FITNESS  OF  THE
 SERVICER, AN INDIVIDUAL CONTROLLING, DIRECTLY OR INDIRECTLY, TEN PERCENT
 OR  MORE  OF  THE  OUTSTANDING  INTERESTS, OR ANY PERSON RESPONSIBLE FOR
 SERVICING A STUDENT LOAN FOR THE SERVICER INDICATES THAT IT  IS  NOT  IN
 THE PUBLIC INTEREST TO PERMIT THE SERVICER TO CONTINUE SERVICING STUDENT
 LOANS;
   (D) THE SERVICER IS INSOLVENT, SUSPENDS PAYMENT OF ITS OBLIGATIONS, OR
 MAKES A GENERAL ASSIGNMENT FOR THE BENEFIT OF ITS CREDITORS; OR
   (E)  THE SERVICER HAS VIOLATED THE LAWS OF THIS STATE, ANY OTHER STATE
 LAW OR ANY FEDERAL LAW INVOLVING FRAUDULENT OR DISHONEST DEALING,  OR  A
 FINAL  JUDGMENT  HAS  BEEN  ENTERED AGAINST A STUDENT LOAN SERVICER IN A
 CIVIL ACTION UPON GROUNDS OF FRAUD, MISREPRESENTATION OR DECEIT.
   2. THE SUPERINTENDENT MAY, ON GOOD CAUSE SHOWN, OR WHERE  THERE  IS  A
 SUBSTANTIAL  RISK  OF  PUBLIC HARM, SUSPEND ANY LICENSE FOR A PERIOD NOT
 EXCEEDING THIRTY DAYS, PENDING INVESTIGATION. "GOOD CAUSE", AS  USED  IN
 THIS SUBDIVISION, SHALL EXIST WHEN A STUDENT LOAN SERVICER HAS DEFAULTED
 IN PERFORMING ITS FINANCIAL ENGAGEMENTS OR ENGAGES IN DISHONEST OR INEQ-
 UITABLE  PRACTICES  WHICH  MAY  CAUSE  SUBSTANTIAL  HARM  TO THE PERSONS
 AFFORDED THE PROTECTION OF THIS ARTICLE.
   3. NO LICENSE SHALL BE REVOKED OR SUSPENDED EXCEPT AFTER NOTICE AND  A
 HEARING  THEREON.    ANY  ORDER  OF SUSPENSION ISSUED AFTER NOTICE AND A
 HEARING MAY INCLUDE AS A CONDITION OF  REINSTATEMENT  THAT  THE  STUDENT
 LOAN  SERVICER  MAKE  RESTITUTION  TO CONSUMERS OF FEES OR OTHER CHARGES
 WHICH HAVE BEEN IMPROPERLY  CHARGED  OR  COLLECTED,  INCLUDING  BUT  NOT
 LIMITED  TO BY ALLOCATING PAYMENTS CONTRARY TO A BORROWER'S DIRECTION OR
 IN A MANNER THAT FAILS TO HELP A BORROWER AVOID DEFAULT,  AS  DETERMINED
 BY  THE  SUPERINTENDENT.  ANY HEARING HELD PURSUANT TO THE PROVISIONS OF
 THIS SECTION SHALL BE NOTICED, CONDUCTED AND ADMINISTERED IN  COMPLIANCE
 WITH THE STATE ADMINISTRATIVE PROCEDURE ACT.
   4.  ANY  STUDENT LOAN SERVICER MAY SURRENDER ANY LICENSE BY DELIVERING
 TO THE SUPERINTENDENT WRITTEN NOTICE  THAT  THE  STUDENT  LOAN  SERVICER
 THEREBY SURRENDERS SUCH LICENSE, BUT SUCH SURRENDER SHALL NOT AFFECT THE
 SERVICER'S  CIVIL  OR CRIMINAL LIABILITY FOR ACTS COMMITTED PRIOR TO THE
 SURRENDER. IF SUCH SURRENDER IS MADE AFTER THE ISSUANCE  BY  THE  SUPER-
 INTENDENT  OF  A  STATEMENT OF CHARGES AND NOTICE OF HEARING, THE SUPER-
 INTENDENT MAY PROCEED AGAINST THE SERVICER AS IF THE SURRENDER  HAD  NOT
 TAKEN PLACE.
   5. NO REVOCATION, SUSPENSION, OR SURRENDER OF ANY LICENSE SHALL IMPAIR
 OR AFFECT THE OBLIGATION OF ANY PRE-EXISTING LAWFUL CONTRACT BETWEEN THE

 A. 2071                             6

 STUDENT LOAN SERVICER AND ANY PERSON, INCLUDING THE DEPARTMENT OF FINAN-
 CIAL SERVICES.
   6.  EVERY LICENSE ISSUED PURSUANT TO THIS ARTICLE SHALL REMAIN IN FULL
 FORCE AND EFFECT UNTIL THE SAME SHALL HAVE BEEN SURRENDERED, REVOKED  OR
 SUSPENDED IN ACCORDANCE WITH ANY OTHER PROVISIONS OF THIS ARTICLE.
   7.  WHENEVER  THE  SUPERINTENDENT  SHALL  REVOKE  OR SUSPEND A LICENSE
 ISSUED PURSUANT TO THIS ARTICLE, HE OR SHE SHALL  FORTHWITH  EXECUTE  IN
 DUPLICATE  A WRITTEN ORDER TO THAT EFFECT. THE SUPERINTENDENT SHALL FILE
 ONE COPY OF THE ORDER IN THE  OFFICE  OF  THE  DEPARTMENT  OF  FINANCIAL
 SERVICES  AND SHALL FORTHWITH SERVE THE OTHER COPY UPON THE STUDENT LOAN
 SERVICER. ANY SUCH ORDER MAY BE REVIEWED IN THE MANNER PROVIDED BY ARTI-
 CLE SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES.
   § 717. BOOKS AND RECORDS;  REPORTS  AND  ELECTRONIC  FILING.  1.  EACH
 STUDENT  LOAN  SERVICER  SHALL  KEEP AND USE IN ITS BUSINESS SUCH BOOKS,
 ACCOUNTS AND RECORDS AS WILL  ENABLE  THE  SUPERINTENDENT  TO  DETERMINE
 WHETHER  THE  SERVICER  IS COMPLYING WITH THE PROVISIONS OF THIS ARTICLE
 AND WITH THE RULES AND REGULATIONS LAWFULLY MADE BY THE  SUPERINTENDENT.
 EVERY  SERVICER SHALL PRESERVE SUCH BOOKS, ACCOUNTS, AND RECORDS, FOR AT
 LEAST THREE YEARS.
   2. (A) EACH STUDENT LOAN SERVICER SHALL ANNUALLY, ON OR BEFORE A  DATE
 TO  BE  DETERMINED  BY THE SUPERINTENDENT, FILE A REPORT WITH THE SUPER-
 INTENDENT GIVING SUCH INFORMATION  AS  THE  SUPERINTENDENT  MAY  REQUIRE
 CONCERNING  THE  BUSINESS  AND  OPERATIONS DURING THE PRECEDING CALENDAR
 YEAR OF SUCH SERVICER UNDER AUTHORITY OF THIS ARTICLE. SUCH REPORT SHALL
 BE SUBSCRIBED AND AFFIRMED AS TRUE BY THE SERVICER UNDER  THE  PENALTIES
 OF PERJURY AND SHALL BE IN THE FORM PRESCRIBED BY THE SUPERINTENDENT.
   (B) IN ADDITION TO ANNUAL REPORTS, THE SUPERINTENDENT MAY REQUIRE SUCH
 ADDITIONAL REGULAR OR SPECIAL REPORTS AS HE OR SHE MAY DEEM NECESSARY TO
 THE  PROPER  SUPERVISION  OF  STUDENT LOAN SERVICERS UNDER THIS ARTICLE.
 SUCH ADDITIONAL REPORTS SHALL BE SUBSCRIBED AND AFFIRMED AS TRUE BY  THE
 SERVICER  UNDER  THE  PENALTIES  OF  PERJURY  AND  SHALL  BE IN THE FORM
 PRESCRIBED BY THE SUPERINTENDENT.
   3. NOTWITHSTANDING ARTICLE THREE OF THE STATE TECHNOLOGY  LAW  OR  ANY
 OTHER  LAW  TO  THE  CONTRARY,  THE  SUPERINTENDENT MAY REQUIRE THAT ANY
 SUBMISSION OR APPROVAL AS MAY BE REQUIRED BY THE SUPERINTENDENT BE  MADE
 OR  EXECUTED  BY  ELECTRONIC  MEANS  IF  HE OR SHE DEEMS IT NECESSARY TO
 ENSURE THE EFFICIENT ADMINISTRATION OF THIS ARTICLE.
   § 718. RULES AND REGULATIONS. 1. IN ADDITION TO  SUCH  POWERS  AS  MAY
 OTHERWISE  BE  PRESCRIBED  BY THIS CHAPTER, THE SUPERINTENDENT IS HEREBY
 AUTHORIZED AND EMPOWERED TO PROMULGATE SUCH RULES AND REGULATIONS AS MAY
 IN THE JUDGMENT OF THE SUPERINTENDENT BE CONSISTENT WITH THE PURPOSES OF
 THIS ARTICLE, OR APPROPRIATE FOR THE EFFECTIVE  ADMINISTRATION  OF  THIS
 ARTICLE, INCLUDING, BUT NOT LIMITED TO:
   (A)  SUCH  RULES  AND REGULATIONS IN CONNECTION WITH THE ACTIVITIES OF
 STUDENT LOAN SERVICERS AS MAY  BE  NECESSARY  AND  APPROPRIATE  FOR  THE
 PROTECTION OF BORROWERS IN THIS STATE;
   (B)  SUCH RULES AND REGULATIONS AS MAY BE NECESSARY AND APPROPRIATE TO
 DEFINE UNFAIR, DECEPTIVE OR ABUSIVE ACTS OR PRACTICES IN CONNECTION WITH
 THE ACTIVITIES OF STUDENT LOAN SERVICERS IN SERVICING STUDENT LOANS;
   (C) SUCH RULES AND REGULATIONS AS MAY DEFINE THE TERMS  USED  IN  THIS
 ARTICLE  AND AS MAY BE NECESSARY AND APPROPRIATE TO INTERPRET AND IMPLE-
 MENT THE PROVISIONS OF THIS ARTICLE; AND
   (D) SUCH RULES AND REGULATIONS AS MAY BE NECESSARY FOR THE ENFORCEMENT
 OF THIS ARTICLE.

 A. 2071                             7
 
   2. THE SUPERINTENDENT IS HEREBY AUTHORIZED AND EMPOWERED TO MAKE  SUCH
 SPECIFIC  RULINGS,  DEMANDS  AND FINDINGS AS THE SUPERINTENDENT MAY DEEM
 NECESSARY FOR THE PROPER CONDUCT OF THE STUDENT LOAN SERVICING INDUSTRY.
   § 719. PROHIBITED PRACTICES. NO STUDENT LOAN SERVICER SHALL:
   1.  DIRECTLY  EMPLOY  ANY  SCHEME,  DEVICE  OR  ARTIFICE TO DEFRAUD OR
 MISLEAD A BORROWER.
   2. INTENTIONALLY ENGAGE IN ANY UNFAIR, DECEPTIVE OR PREDATORY  ACT  OR
 PRACTICE TOWARD ANY PERSON OR MISREPRESENT OR OMIT ANY MATERIAL INFORMA-
 TION  IN CONNECTION WITH THE SERVICING OF A STUDENT LOAN, INCLUDING, BUT
 NOT LIMITED TO, MISREPRESENTING THE AMOUNT, NATURE OR TERMS OF  ANY  FEE
 OR  PAYMENT  DUE  OR  CLAIMED TO BE DUE ON A STUDENT LOAN, THE TERMS AND
 CONDITIONS OF THE LOAN AGREEMENT OR THE BORROWER'S OBLIGATIONS UNDER THE
 LOAN.
   3. INTENTIONALLY MISAPPLY PAYMENTS TO THE OUTSTANDING BALANCE  OF  ANY
 STUDENT LOAN OR TO ANY RELATED INTEREST OR FEES.
   4.  INTENTIONALLY PROVIDE MISLEADING INFORMATION TO A CONSUMER REPORT-
 ING AGENCY.
   5. REFUSE TO COMMUNICATE WITH  AN  AUTHORIZED  REPRESENTATIVE  OF  THE
 BORROWER  WHO  PROVIDES  A WRITTEN AUTHORIZATION SIGNED BY THE BORROWER,
 PROVIDED THAT THE SERVICER MAY ADOPT PROCEDURES  REASONABLY  RELATED  TO
 VERIFYING THAT THE REPRESENTATIVE IS IN FACT AUTHORIZED TO ACT ON BEHALF
 OF THE BORROWER.
   6.  KNOWINGLY MAKE ANY FALSE STATEMENT OR MAKE ANY OMISSION OF A MATE-
 RIAL FACT IN CONNECTION WITH ANY INFORMATION OR  REPORTS  FILED  WITH  A
 GOVERNMENTAL AGENCY OR IN CONNECTION WITH ANY INVESTIGATION CONDUCTED BY
 THE SUPERINTENDENT OR ANOTHER GOVERNMENTAL AGENCY.
   §  720.  SERVICING  STUDENT  LOANS WITHOUT A LICENSE. WHENEVER, IN THE
 OPINION OF THE SUPERINTENDENT, A PERSON IS ENGAGED IN  THE  BUSINESS  OF
 SERVICING  STUDENT LOANS, EITHER ACTUALLY OR THROUGH SUBTERFUGE, WITHOUT
 A LICENSE FROM THE SUPERINTENDENT, THE  SUPERINTENDENT  MAY  ORDER  THAT
 PERSON  TO DESIST AND REFRAIN FROM ENGAGING IN THE BUSINESS OF SERVICING
 STUDENT LOANS IN THE STATE. IF, WITHIN THIRTY DAYS  AFTER  AN  ORDER  IS
 SERVED,  A  REQUEST FOR A HEARING IS FILED IN WRITING AND THE HEARING IS
 NOT HELD WITHIN SIXTY DAYS OF THE FILING, THE ORDER SHALL BE RESCINDED.
   § 721. RESPONSIBILITIES. 1.  IF  A  STUDENT  LOAN  SERVICER  REGULARLY
 REPORTS  INFORMATION  TO A CONSUMER REPORTING AGENCY, THE SERVICER SHALL
 ACCURATELY REPORT A BORROWER'S  PAYMENT  PERFORMANCE  TO  AT  LEAST  ONE
 CONSUMER REPORTING AGENCY THAT COMPILES AND MAINTAINS FILES ON CONSUMERS
 ON  A  NATIONWIDE BASIS AS DEFINED IN SECTION 603(P) OF THE FEDERAL FAIR
 CREDIT REPORTING ACT (15 U.S.C. SEC. 1681A(P)),  UPON  ACCEPTANCE  AS  A
 DATA FURNISHER BY THAT CONSUMER REPORTING AGENCY.
   2. (A) EXCEPT AS PROVIDED IN FEDERAL LAW OR REQUIRED BY A STUDENT LOAN
 AGREEMENT,  A  STUDENT  LOAN SERVICER SHALL INQUIRE OF A BORROWER HOW TO
 APPLY A BORROWER'S NONCONFORMING PAYMENT. A BORROWER'S DIRECTION ON  HOW
 TO  APPLY  A NONCONFORMING PAYMENT SHALL REMAIN IN EFFECT FOR ANY FUTURE
 NONCONFORMING PAYMENT DURING THE  TERM  OF  A  STUDENT  LOAN  UNTIL  THE
 BORROWER PROVIDES DIFFERENT DIRECTIONS.
   (B)  FOR  PURPOSES  OF THIS SUBDIVISION, "NONCONFORMING PAYMENT" SHALL
 MEAN A PAYMENT THAT IS EITHER MORE OR LESS THAN THE BORROWER'S  REQUIRED
 STUDENT LOAN PAYMENT.
   3.  (A) IF THE SALE, ASSIGNMENT, OR OTHER TRANSFER OF THE SERVICING OF
 A STUDENT LOAN RESULTS IN A CHANGE IN THE IDENTITY OF THE PERSON TO WHOM
 THE BORROWER IS REQUIRED TO  SEND  SUBSEQUENT  PAYMENTS  OR  DIRECT  ANY
 COMMUNICATIONS  CONCERNING  THE  STUDENT  LOAN,  A STUDENT LOAN SERVICER
 SHALL TRANSFER  ALL  INFORMATION  REGARDING  A  BORROWER,  A  BORROWER'S
 ACCOUNT, AND A BORROWER'S STUDENT LOAN, INCLUDING BUT NOT LIMITED TO THE

 A. 2071                             8
 
 BORROWER'S  REPAYMENT  STATUS  AND ANY BORROWER BENEFITS ASSOCIATED WITH
 THE BORROWER'S STUDENT LOAN, TO THE NEW STUDENT LOAN SERVICER  SERVICING
 THE BORROWER'S STUDENT LOAN WITHIN FORTY-FIVE DAYS.
   (B)  A  STUDENT  LOAN  SERVICER SHALL ADOPT POLICIES AND PROCEDURES TO
 VERIFY THAT IT HAS RECEIVED ALL  INFORMATION  REGARDING  A  BORROWER,  A
 BORROWER'S  ACCOUNT,  AND  A  BORROWER'S STUDENT LOAN, INCLUDING BUT NOT
 LIMITED TO THE BORROWER'S REPAYMENT STATUS  AND  ANY  BORROWER  BENEFITS
 ASSOCIATED  WITH  THE BORROWER'S STUDENT LOAN, WHEN THE SERVICER OBTAINS
 THE RIGHT TO SERVICE A STUDENT LOAN.
   4. IF A STUDENT LOAN SERVICER SELLS, ASSIGNS, OR  OTHERWISE  TRANSFERS
 THE  SERVICING OF A STUDENT LOAN TO A NEW SERVICER, THE SALE, ASSIGNMENT
 OR OTHER TRANSFER SHALL BE COMPLETED AT  LEAST  SEVEN  DAYS  BEFORE  THE
 BORROWER'S NEXT PAYMENT IS DUE.
   5.  (A)  A  STUDENT  LOAN  SERVICER  THAT SELLS, ASSIGNS, OR OTHERWISE
 TRANSFERS THE SERVICING OF A STUDENT LOAN SHALL REQUIRE AS  A  CONDITION
 OF  SUCH  SALE,  ASSIGNMENT  OR OTHER TRANSFER THAT THE NEW STUDENT LOAN
 SERVICER SHALL HONOR ALL BORROWER  BENEFITS  ORIGINALLY  REPRESENTED  AS
 BEING  AVAILABLE  TO A BORROWER DURING THE REPAYMENT OF THE STUDENT LOAN
 AND THE POSSIBILITY OF SUCH BENEFITS, INCLUDING ANY BENEFITS  THAT  WERE
 REPRESENTED  AS  BEING  AVAILABLE BUT FOR WHICH THE BORROWER HAD NOT YET
 QUALIFIED.
   (B) A STUDENT LOAN SERVICER  THAT  OBTAINS  THE  RIGHT  TO  SERVICE  A
 STUDENT LOAN SHALL HONOR ALL BORROWER BENEFITS ORIGINALLY REPRESENTED AS
 BEING  AVAILABLE  TO A BORROWER DURING THE REPAYMENT OF THE STUDENT LOAN
 AND THE POSSIBILITY OF SUCH BENEFITS, INCLUDING ANY BENEFITS  THAT  WERE
 REPRESENTED  AS  BEING  AVAILABLE BUT FOR WHICH THE BORROWER HAD NOT YET
 QUALIFIED.
   6. A STUDENT LOAN SERVICER SHALL  RESPOND  WITHIN  THIRTY  DAYS  AFTER
 RECEIPT  TO A WRITTEN INQUIRY FROM A BORROWER OR A BORROWER'S AUTHORIZED
 REPRESENTATIVE.
   7. A STUDENT LOAN SERVICER SHALL PRESERVE RECORDS OF EACH STUDENT LOAN
 AND ALL COMMUNICATIONS WITH  BORROWERS  FOR  NOT  LESS  THAN  TWO  YEARS
 FOLLOWING THE FINAL PAYMENT ON A STUDENT LOAN OR THE SALE, ASSIGNMENT OR
 OTHER  TRANSFER  OF  THE  SERVICING  OF A STUDENT LOAN, WHICHEVER OCCURS
 FIRST, OR SUCH LONGER PERIOD AS MAY BE REQUIRED BY ANY  OTHER  PROVISION
 OF LAW.
   §  722.  EXAMINATIONS.  1.  THE SUPERINTENDENT MAY AT ANY TIME, AND AS
 OFTEN AS HE OR SHE MAY DETERMINE, EITHER PERSONALLY OR BY A PERSON  DULY
 DESIGNATED  BY  THE SUPERINTENDENT, INVESTIGATE THE BUSINESS AND EXAMINE
 THE BOOKS, ACCOUNTS, RECORDS, AND FILES USED THEREIN  OF  EVERY  STUDENT
 LOAN  SERVICER.  FOR THAT PURPOSE THE SUPERINTENDENT AND HIS OR HER DULY
 DESIGNATED REPRESENTATIVE SHALL HAVE FREE  ACCESS  TO  THE  OFFICES  AND
 PLACES  OF  BUSINESS, BOOKS, ACCOUNTS, PAPERS, RECORDS, FILES, SAFES AND
 VAULTS OF ALL STUDENT LOAN SERVICERS. THE SUPERINTENDENT AND ANY  PERSON
 DULY  DESIGNATED  BY  HIM OR HER SHALL HAVE THE AUTHORITY TO REQUIRE THE
 ATTENDANCE OF AND TO EXAMINE UNDER OATH ALL PERSONS WHOSE  TESTIMONY  HE
 OR SHE MAY REQUIRE RELATIVE TO SUCH BUSINESS.
   2.  NO  PERSON  SUBJECT  TO  INVESTIGATION  OR  EXAMINATION UNDER THIS
 SECTION MAY KNOWINGLY WITHHOLD, ABSTRACT, REMOVE, MUTILATE,  DESTROY  OR
 SECRETE ANY BOOKS, RECORDS, COMPUTER RECORDS OR OTHER INFORMATION.
   3.  THE  EXPENSES  INCURRED IN MAKING ANY EXAMINATION PURSUANT TO THIS
 SECTION SHALL BE ASSESSED AGAINST AND PAID BY THE STUDENT LOAN  SERVICER
 SO  EXAMINED, EXCEPT THAT TRAVELING AND SUBSISTENCE EXPENSES SO INCURRED
 SHALL BE CHARGED AGAINST AND PAID BY SERVICERS IN  SUCH  PROPORTIONS  AS
 THE  SUPERINTENDENT  SHALL  DEEM  JUST  AND REASONABLE, AND SUCH PROPOR-
 TIONATE CHARGES SHALL BE ADDED TO THE ASSESSMENT OF THE  OTHER  EXPENSES

 A. 2071                             9
 
 INCURRED  UPON  EACH EXAMINATION. UPON WRITTEN NOTICE BY THE SUPERINTEN-
 DENT OF THE TOTAL AMOUNT OF SUCH ASSESSMENT, THE SERVICER  SHALL  BECOME
 LIABLE FOR AND SHALL PAY SUCH ASSESSMENT TO THE SUPERINTENDENT.
   4. IN ANY HEARING IN WHICH A DEPARTMENT EMPLOYEE ACTING UNDER AUTHORI-
 TY  OF  THIS  CHAPTER  IS  AVAILABLE FOR CROSS-EXAMINATION, ANY OFFICIAL
 WRITTEN REPORT, WORKSHEET, OTHER RELATED PAPERS, OR DULY CERTIFIED  COPY
 THEREOF,  COMPILED, PREPARED, DRAFTED, OR OTHERWISE MADE BY SUCH DEPART-
 MENT EMPLOYEE, AFTER BEING DULY AUTHENTICATED BY THE  EMPLOYEE,  MAY  BE
 ADMITTED  AS  COMPETENT EVIDENCE UPON THE OATH OF THE EMPLOYEE THAT SUCH
 WORKSHEET,  INVESTIGATIVE  REPORT,  OR  OTHER  RELATED  DOCUMENTS   WERE
 PREPARED  AS  A  RESULT  OF AN EXAMINATION OF THE BOOKS AND RECORDS OF A
 SERVICER OR OTHER PERSON, CONDUCTED PURSUANT TO THE  AUTHORITY  OF  THIS
 CHAPTER.
   5.  UNLESS  OTHERWISE  EXEMPT  PURSUANT  TO SUBDIVISION TWO OF SECTION
 SEVEN HUNDRED ELEVEN OF THIS  ARTICLE,  AFFILIATES  OF  A  STUDENT  LOAN
 SERVICER  SHALL  BE  SUBJECT TO EXAMINATION BY THE SUPERINTENDENT ON THE
 SAME TERMS AS THE SERVICER, BUT ONLY WHEN REPORTS FROM,  OR  EXAMINATION
 OF, A SERVICER PROVIDES EVIDENCE OF UNLAWFUL ACTIVITY BETWEEN A SERVICER
 AND  AFFILIATE  BENEFITTING,  AFFECTING,  OR ARISING FROM THE ACTIVITIES
 REGULATED BY THIS ARTICLE.
   § 723. PENALTIES FOR VIOLATION OF THIS ARTICLE. 1. IN ADDITION TO SUCH
 PENALTIES AS MAY OTHERWISE BE APPLICABLE BY LAW, THE SUPERINTENDENT MAY,
 AFTER NOTICE  AND  HEARING,  REQUIRE  ANY  PERSON  FOUND  VIOLATING  THE
 PROVISIONS OF THIS ARTICLE OR THE RULES OR REGULATIONS PROMULGATED HERE-
 UNDER TO PAY TO THE PEOPLE OF THIS STATE A PENALTY FOR EACH VIOLATION OF
 THIS ARTICLE OR ANY REGULATION OR POLICY PROMULGATED HEREUNDER A SUM NOT
 TO EXCEED AN AMOUNT AS DETERMINED PURSUANT TO SECTION FORTY-FOUR OF THIS
 CHAPTER FOR EACH SUCH VIOLATION.
   2.  NOTHING  IN  THIS  ARTICLE SHALL LIMIT ANY STATUTORY OR COMMON-LAW
 RIGHT OF ANY PERSON TO BRING ANY ACTION IN ANY COURT FOR ANY ACT, OR THE
 RIGHT OF THE STATE TO PUNISH ANY PERSON FOR ANY VIOLATION OF ANY LAW.
   § 724. SEVERABILITY OF PROVISIONS. IF ANY PROVISION OF  THIS  ARTICLE,
 OR  THE  APPLICATION  OF  SUCH  PROVISION TO ANY PERSON OR CIRCUMSTANCE,
 SHALL BE HELD INVALID, ILLEGAL OR UNENFORCEABLE, THE  REMAINDER  OF  THE
 ARTICLE,  AND  THE  APPLICATION  OF SUCH PROVISION TO PERSONS OR CIRCUM-
 STANCES OTHER THAN THOSE AS TO WHICH IT  IS  HELD  INVALID,  ILLEGAL  OR
 UNENFORCEABLE, SHALL NOT BE AFFECTED THEREBY.
   §  725.  COMPLIANCE  WITH  OTHER LAWS. 1. STUDENT LOAN SERVICERS SHALL
 ENGAGE IN THE BUSINESS OF SERVICING STUDENT LOANS IN CONFORMITY WITH THE
 PROVISIONS OF THIS CHAPTER, SUCH RULES AND REGULATIONS AS MAY BE PROMUL-
 GATED BY THE SUPERINTENDENT THEREUNDER AND ALL APPLICABLE  FEDERAL  LAWS
 AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
   2.  NOTHING  IN THIS SECTION SHALL BE CONSTRUED TO LIMIT ANY OTHERWISE
 APPLICABLE STATE OR FEDERAL LAW OR REGULATIONS.
   § 2. Subdivision 10 of section 36 of the banking law,  as  amended  by
 chapter 182 of the laws of 2011, is amended to read as follows:
   10. All reports of examinations and investigations, correspondence and
 memoranda  concerning  or  arising  out of such examination and investi-
 gations, including any duly authenticated copy or copies thereof in  the
 possession  of  any  banking  organization,  bank holding company or any
 subsidiary thereof (as such terms "bank holding  company"  and  "subsid-
 iary"  are  defined in article three-A of this chapter), any corporation
 or any other entity affiliated with a banking  organization  within  the
 meaning  of  subdivision six of this section and any non-banking subsid-
 iary of a corporation or any other entity which is  an  affiliate  of  a
 banking  organization  within  the  meaning of subdivision six-a of this

 A. 2071                            10
 
 section, foreign banking corporation, licensed lender,  licensed  casher
 of   checks,  licensed  mortgage  banker,  registered  mortgage  broker,
 licensed mortgage  loan  originator,  licensed  sales  finance  company,
 registered  mortgage  loan  servicer,  LICENSED  STUDENT  LOAN SERVICER,
 licensed insurance  premium  finance  agency,  licensed  transmitter  of
 money,  licensed  budget  planner, any other person or entity subject to
 supervision under this chapter, or the department, shall be confidential
 communications, shall not be subject to subpoena and shall not  be  made
 public  unless,  in  the  judgment  of  the  superintendent, the ends of
 justice and the public advantage will be subserved  by  the  publication
 thereof,  in which event the superintendent may publish or authorize the
 publication of a copy of any such report or any  part  thereof  in  such
 manner  as may be deemed proper or unless such laws specifically author-
 ize such disclosure. For the purposes of this subdivision,  "reports  of
 examinations  and  investigations,  and any correspondence and memoranda
 concerning or arising out  of  such  examinations  and  investigations",
 includes any such materials of a bank, insurance or securities regulato-
 ry  agency  or  any unit of the federal government or that of this state
 any other state or that of any foreign government which  are  considered
 confidential  by  such agency or unit and which are in the possession of
 the department or which are otherwise confidential materials  that  have
 been  shared  by  the department with any such agency or unit and are in
 the possession of such agency or unit.
   § 3. Subdivisions 1, 2, 3 and 5 of section  39  of  the  banking  law,
 subdivisions  1,  2  and 5 as amended by chapter 123 of the laws of 2009
 and subdivision 3 as amended by chapter 155 of the  laws  of  2012,  are
 amended to read as follows:
   1.  To  appear  and  explain  an apparent violation. Whenever it shall
 appear to the superintendent that any banking organization, bank holding
 company, registered mortgage broker, licensed mortgage banker,  LICENSED
 STUDENT LOAN SERVICER, registered mortgage loan servicer, licensed mort-
 gage  loan  originator,  licensed  lender,  licensed  casher  of checks,
 licensed sales finance company, licensed insurance premium finance agen-
 cy, licensed transmitter of money, licensed budget planner, out-of-state
 state bank that maintains a branch  or  branches  or  representative  or
 other  offices in this state, or foreign banking corporation licensed by
 the superintendent to do business or maintain a representative office in
 this state has violated any law or regulation, he or she may, in his  or
 her  discretion,  issue  an order describing such apparent violation and
 requiring such banking organization, bank  holding  company,  registered
 mortgage  broker, licensed mortgage banker, LICENSED STUDENT LOAN SERVI-
 CER, licensed mortgage loan originator, licensed lender, licensed casher
 of checks, licensed sales finance company,  licensed  insurance  premium
 finance  agency, licensed transmitter of money, licensed budget planner,
 out-of-state state bank that maintains a branch or branches or represen-
 tative or other offices in this state, or foreign banking corporation to
 appear before him or her, at a time and place fixed in  said  order,  to
 present an explanation of such apparent violation.
   2.  To discontinue unauthorized or unsafe and unsound practices. When-
 ever it shall appear to the superintendent that  any  banking  organiza-
 tion,  bank  holding company, registered mortgage broker, licensed mort-
 gage banker, LICENSED STUDENT LOAN SERVICER,  registered  mortgage  loan
 servicer,  licensed  mortgage loan originator, licensed lender, licensed
 casher of checks, licensed sales  finance  company,  licensed  insurance
 premium  finance  agency, licensed transmitter of money, licensed budget
 planner, out-of-state state bank that maintains a branch or branches  or

 A. 2071                            11
 
 representative or other offices in this state, or foreign banking corpo-
 ration  licensed  by  the superintendent to do business in this state is
 conducting business in an unauthorized or unsafe and unsound manner,  he
 or  she  may,  in  his  or  her discretion, issue an order directing the
 discontinuance of such unauthorized or unsafe and unsound practices, and
 fixing a time and place at which such banking organization, bank holding
 company, registered mortgage broker, licensed mortgage banker,  LICENSED
 STUDENT LOAN SERVICER, registered mortgage loan servicer, licensed mort-
 gage  loan  originator,  licensed  lender,  licensed  casher  of checks,
 licensed sales finance company, licensed insurance premium finance agen-
 cy, licensed transmitter of money, licensed budget planner, out-of-state
 state bank that maintains a branch  or  branches  or  representative  or
 other  offices  in this state, or foreign banking corporation may volun-
 tarily appear before him or her to present any explanation in defense of
 the practices directed in said order to be discontinued.
   3. To make good impairment of capital or  to  ensure  compliance  with
 financial  requirements.  Whenever it shall appear to the superintendent
 that the capital or capital stock  of  any  banking  organization,  bank
 holding  company  or any subsidiary thereof which is organized, licensed
 or registered pursuant to this chapter, is impaired,  or  the  financial
 requirements  imposed by subdivision one of section two hundred two-b of
 this chapter or any regulation of the superintendent on  any  branch  or
 agency  of  a  foreign banking corporation or the financial requirements
 imposed by this chapter or any regulation of the superintendent  on  any
 licensed  lender,  registered mortgage broker, licensed mortgage banker,
 LICENSED STUDENT LOAN SERVICER,  licensed  casher  of  checks,  licensed
 sales  finance  company,  licensed  insurance  premium  finance  agency,
 licensed transmitter of money, licensed budget planner or private banker
 are not satisfied,  the  superintendent  may,  in  the  superintendent's
 discretion,  issue  an  order  directing that such banking organization,
 bank holding company, branch or agency of a foreign banking corporation,
 registered mortgage broker, licensed mortgage banker,  LICENSED  STUDENT
 LOAN  SERVICER,  licensed  lender,  licensed  casher of checks, licensed
 sales  finance  company,  licensed  insurance  premium  finance  agency,
 licensed transmitter of money, licensed budget planner, or private bank-
 er  make  good  such  deficiency forthwith or within a time specified in
 such order.
   5. To keep books and accounts as prescribed. Whenever it shall  appear
 to the superintendent that any banking organization, bank holding compa-
 ny,  registered  mortgage  broker,  licensed  mortgage  banker, LICENSED
 STUDENT LOAN SERVICER, registered mortgage loan servicer, licensed mort-
 gage loan  originator,  licensed  lender,  licensed  casher  of  checks,
 licensed sales finance company, licensed insurance premium finance agen-
 cy,  licensed  transmitter  of money, licensed budget planner, agency or
 branch of a foreign banking corporation licensed by  the  superintendent
 to  do  business  in this state, does not keep its books and accounts in
 such manner as to enable him or her to readily ascertain its true condi-
 tion, he or she may, in his or her discretion, issue an order  requiring
 such  banking  organization,  bank  holding company, registered mortgage
 broker, licensed mortgage banker, LICENSED STUDENT LOAN SERVICER, regis-
 tered  mortgage  loan  servicer,  licensed  mortgage  loan   originator,
 licensed  lender,  licensed  casher  of  checks,  licensed sales finance
 company, licensed insurance premium finance agency, licensed transmitter
 of money, licensed budget planner, or foreign  banking  corporation,  or
 the  officers  or  agents thereof, or any of them, to open and keep such
 books or accounts as he or she may, in his or her discretion,  determine

 A. 2071                            12
 
 and prescribe for the purpose of keeping accurate and convenient records
 of its transactions and accounts.
   §  4. Paragraph (a) of subdivision 1 of section 44 of the banking law,
 as amended by chapter 155 of the laws of 2012, is  amended  to  read  as
 follows:
   (a) Without limiting any power granted to the superintendent under any
 other provision of this chapter, the superintendent may, in a proceeding
 after  notice  and a hearing, require any safe deposit company, licensed
 lender, licensed casher  of  checks,  licensed  sales  finance  company,
 licensed  insurance  premium  finance  agency,  licensed  transmitter of
 money, licensed mortgage banker, LICENSED STUDENT LOAN SERVICER,  regis-
 tered  mortgage  broker,  licensed  mortgage loan originator, registered
 mortgage loan servicer or licensed budget planner to pay to  the  people
 of  this  state  a  penalty for any violation of this chapter, any regu-
 lation promulgated thereunder,  any  final  or  temporary  order  issued
 pursuant  to  section thirty-nine of this article, any condition imposed
 in writing by the superintendent in connection with  the  grant  of  any
 application  or  request, or any written agreement entered into with the
 superintendent.
   § 5. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  2071--A
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 22, 2019
                                ___________
 
 Introduced by M. of A. ZEBROWSKI, SEAWRIGHT, WALKER, ORTIZ, ENGLEBRIGHT,
   SIMON,  JAFFEE,  GOTTFRIED, COLTON, D'URSO, BLAKE, WRIGHT, DE LA ROSA,
   VANEL, FAHY,  PEOPLES-STOKES,  CUSICK,  L. ROSENTHAL,  GALEF,  MOSLEY,
   DINOWITZ,  TAYLOR,  SOLAGES,  HYNDMAN,  KIM,  MONTESANO,  DiPIETRO  --
   Multi-Sponsored by -- M. of A.  BRAUNSTEIN,  M. L. MILLER,  THIELE  --
   read  once  and  referred  to  the  Committee  on  Banks  -- committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee
 
 AN ACT to amend the banking law, in relation to requiring the  licensure
   of student loan servicers
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The banking law is amended by adding a new article 14-A  to
 read as follows:
                               ARTICLE XIV-A
                          STUDENT LOAN SERVICERS
 SECTION 710. DEFINITIONS.
         711. LICENSING.
         712. APPLICATION FOR A STUDENT LOAN SERVICER LICENSE; FEES.
         713. APPLICATION  PROCESS  TO  RECEIVE  LICENSE TO ENGAGE IN THE
                BUSINESS OF STUDENT LOAN SERVICING.
         714. CHANGES IN OFFICERS AND DIRECTORS.
         715. CHANGES IN CONTROL.
         716. GROUNDS FOR SUSPENSION OR REVOCATION OF LICENSE.
         717. BOOKS AND RECORDS; REPORTS AND ELECTRONIC FILING.
         718. RULES AND REGULATIONS.
         719. PROHIBITED PRACTICES.
         720. SERVICING STUDENT LOANS WITHOUT A LICENSE.
         721. RESPONSIBILITIES.
         722. EXAMINATIONS.
         723. PENALTIES FOR VIOLATION OF THIS ARTICLE.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD01465-03-9

 A. 2071--A                          2
 
         724. SEVERABILITY OF PROVISIONS.
         725. COMPLIANCE WITH OTHER LAWS.
   §  710. DEFINITIONS. 1. "APPLICANT" SHALL MEAN ANY PERSON APPLYING FOR
 A LICENSE TO BE A STUDENT LOAN SERVICER.
   2. "BORROWER" SHALL MEAN ANY RESIDENT OF THIS STATE WHO HAS RECEIVED A
 STUDENT LOAN OR AGREED IN WRITING TO PAY A STUDENT LOAN  OR  ANY  PERSON
 WHO  SHARES A LEGAL OBLIGATION WITH SUCH RESIDENT FOR REPAYING A STUDENT
 LOAN.
   3. "BORROWER BENEFIT" SHALL MEAN AN INCENTIVE OFFERED TO A BORROWER IN
 CONNECTION WITH THE ORIGINATION OF A STUDENT  LOAN,  INCLUDING  BUT  NOT
 LIMITED  TO  AN INTEREST RATE REDUCTION, PRINCIPAL REBATE, FEE WAIVER OR
 REBATE, LOAN CANCELLATION, OR COSIGNER RELEASE.
   4. "EXEMPT ORGANIZATION" SHALL MEAN ANY BANKING ORGANIZATION,  FOREIGN
 BANKING CORPORATION, NATIONAL BANK, FEDERAL SAVINGS ASSOCIATION, FEDERAL
 CREDIT UNION, OR ANY BANK, TRUST COMPANY, SAVINGS BANK, SAVINGS AND LOAN
 ASSOCIATION,  OR  CREDIT  UNION  ORGANIZED  UNDER  THE LAWS OF ANY OTHER
 STATE.
   5. "PERSON"  SHALL  MEAN  ANY  INDIVIDUAL,  ASSOCIATION,  CORPORATION,
 LIMITED  LIABILITY COMPANY, PARTNERSHIP, TRUST, UNINCORPORATED ORGANIZA-
 TION, OR ANY OTHER ENTITY.
   6. "SERVICER" OR "STUDENT LOAN SERVICER" SHALL MEAN A PERSON  LICENSED
 PURSUANT  TO  SECTION  SEVEN HUNDRED ELEVEN OF THIS ARTICLE TO ENGAGE IN
 THE BUSINESS OF SERVICING ANY STUDENT LOAN OF A BORROWER.
   7. "SERVICING" SHALL MEAN:
   (A) RECEIVING ANY PAYMENT FROM A BORROWER PURSUANT TO THE TERMS OF ANY
 STUDENT LOAN;
   (B) APPLYING ANY PAYMENT TO A BORROWER'S ACCOUNT PURSUANT TO THE TERMS
 OF A STUDENT LOAN OR THE CONTRACT GOVERNING THE SERVICING  OF  ANY  SUCH
 LOAN;
   (C) PROVIDING ANY NOTIFICATION OF AMOUNTS OWED ON A STUDENT LOAN BY OR
 ON ACCOUNT OF ANY BORROWER;
   (D)  DURING A PERIOD WHEN A BORROWER IS NOT REQUIRED TO MAKE A PAYMENT
 ON A STUDENT LOAN, MAINTAINING ACCOUNT RECORDS FOR THE STUDENT LOAN  AND
 COMMUNICATING  WITH THE BORROWER REGARDING THE STUDENT LOAN ON BEHALF OF
 THE OWNER OF THE STUDENT LOAN PROMISSORY NOTE;
   (E) INTERACTING WITH A BORROWER  WITH  RESPECT  TO  OR  REGARDING  ANY
 ATTEMPT TO AVOID DEFAULT ON THE BORROWER'S STUDENT LOAN, OR FACILITATING
 THE ACTIVITIES DESCRIBED IN PARAGRAPH (A) OR (B) OF THIS SUBDIVISION; OR
   (F) PERFORMING OTHER ADMINISTRATIVE SERVICES WITH RESPECT TO A BORROW-
 ER'S STUDENT LOAN.
   8. "STUDENT LOAN" SHALL MEAN ANY LOAN TO A BORROWER TO FINANCE POSTSE-
 CONDARY EDUCATION OR EXPENSES RELATED TO POSTSECONDARY EDUCATION.
   § 711. LICENSING. 1. NO PERSON SHALL ENGAGE IN THE BUSINESS OF SERVIC-
 ING  STUDENT  LOANS OWED BY ONE OR MORE BORROWERS RESIDING IN THIS STATE
 WITHOUT FIRST BEING LICENSED BY THE SUPERINTENDENT  AS  A  STUDENT  LOAN
 SERVICER  IN ACCORDANCE WITH THIS ARTICLE AND SUCH REGULATIONS AS MAY BE
 PRESCRIBED BY THE SUPERINTENDENT.
   2. THE LICENSING PROVISIONS OF THIS SUBDIVISION SHALL NOT APPLY TO ANY
 EXEMPT ORGANIZATION.
   § 712. APPLICATION FOR A STUDENT LOAN SERVICER LICENSE; FEES. 1.   THE
 APPLICATION  FOR  A  LICENSE  TO  BE A STUDENT LOAN SERVICER SHALL BE IN
 WRITING, UNDER OATH, AND IN THE FORM PRESCRIBED BY  THE  SUPERINTENDENT.
 NOTWITHSTANDING  ARTICLE  THREE OF THE STATE TECHNOLOGY LAW OR ANY OTHER
 LAW TO THE CONTRARY, THE SUPERINTENDENT MAY REQUIRE THAT AN  APPLICATION
 FOR A LICENSE OR ANY OTHER SUBMISSION OR APPLICATION FOR APPROVAL AS MAY
 BE  REQUIRED  BY THIS ARTICLE BE MADE OR EXECUTED BY ELECTRONIC MEANS IF

 A. 2071--A                          3
 
 HE OR SHE DEEMS IT NECESSARY  TO  ENSURE  THE  EFFICIENT  AND  EFFECTIVE
 ADMINISTRATION   OF  THIS  ARTICLE.  THE  APPLICATION  SHALL  INCLUDE  A
 DESCRIPTION OF THE ACTIVITIES OF THE APPLICANT, IN SUCH DETAIL  AND  FOR
 SUCH PERIODS AS THE SUPERINTENDENT MAY REQUIRE, INCLUDING:
   (A)  AN  AFFIRMATION  OF FINANCIAL SOLVENCY NOTING SUCH CAPITALIZATION
 REQUIREMENTS AS MAY BE REQUIRED BY THE  SUPERINTENDENT,  AND  ACCESS  TO
 SUCH CREDIT AS MAY BE REQUIRED BY THE SUPERINTENDENT;
   (B)  A  FINANCIAL STATEMENT PREPARED BY A CERTIFIED PUBLIC ACCOUNTANT,
 THE ACCURACY OF WHICH IS SWORN TO UNDER OATH BEFORE A NOTARY  PUBLIC  BY
 AN OFFICER OR OTHER REPRESENTATIVE OF THE APPLICANT WHO IS AUTHORIZED TO
 EXECUTE SUCH DOCUMENTS;
   (C) AN AFFIRMATION THAT THE APPLICANT, OR ITS MEMBERS, OFFICERS, PART-
 NERS, DIRECTORS AND PRINCIPALS AS MAY BE APPROPRIATE, ARE AT LEAST TWEN-
 TY-ONE YEARS OF AGE;
   (D)  INFORMATION  AS TO THE CHARACTER, FITNESS, FINANCIAL AND BUSINESS
 RESPONSIBILITY, BACKGROUND AND EXPERIENCES  OF  THE  APPLICANT,  OR  ITS
 MEMBERS,  OFFICERS,  PARTNERS, DIRECTORS AND PRINCIPALS AS MAY BE APPRO-
 PRIATE; AND
   (E) ANY ADDITIONAL DETAIL OR INFORMATION REQUIRED BY  THE  SUPERINTEN-
 DENT.
   2. AN APPLICATION TO BECOME A STUDENT LOAN SERVICER OR ANY APPLICATION
 WITH RESPECT TO A STUDENT LOAN SERVICER SHALL BE ACCOMPANIED BY A FEE AS
 PRESCRIBED PURSUANT TO SECTION EIGHTEEN-A OF THIS CHAPTER.
   §  713.  APPLICATION PROCESS TO RECEIVE LICENSE TO ENGAGE IN THE BUSI-
 NESS OF STUDENT LOAN SERVICING. 1. UPON THE FILING OF AN APPLICATION FOR
 A LICENSE, IF THE SUPERINTENDENT SHALL FIND THAT THE FINANCIAL RESPONSI-
 BILITY, EXPERIENCE, CHARACTER, AND GENERAL FITNESS OF THE APPLICANT AND,
 IF APPLICABLE, THE MEMBERS, OFFICERS, PARTNERS, DIRECTORS AND PRINCIPALS
 OF THE APPLICANT ARE SUCH AS TO COMMAND THE CONFIDENCE OF THE  COMMUNITY
 AND TO WARRANT BELIEF THAT THE BUSINESS WILL BE OPERATED HONESTLY, FAIR-
 LY,  AND EFFICIENTLY WITHIN THE PURPOSE OF THIS ARTICLE, THE SUPERINTEN-
 DENT SHALL THEREUPON ISSUE A LICENSE IN DUPLICATE TO ENGAGE IN THE BUSI-
 NESS OF SERVICING STUDENT LOANS DESCRIBED IN SECTION SEVEN  HUNDRED  TEN
 OF  THIS  ARTICLE  IN ACCORDANCE WITH THE PROVISIONS OF THIS ARTICLE. IF
 THE SUPERINTENDENT SHALL NOT SO FIND, THE SUPERINTENDENT SHALL NOT ISSUE
 A LICENSE, AND THE SUPERINTENDENT SHALL SO  NOTIFY  THE  APPLICANT.  THE
 SUPERINTENDENT SHALL TRANSMIT ONE COPY OF A LICENSE TO THE APPLICANT AND
 FILE ANOTHER COPY IN THE OFFICE OF THE DEPARTMENT OF FINANCIAL SERVICES.
 UPON  RECEIPT  OF SUCH LICENSE, A STUDENT LOAN SERVICER SHALL BE AUTHOR-
 IZED TO ENGAGE IN THE BUSINESS OF SERVICING STUDENT LOANS IN  ACCORDANCE
 WITH  THE  PROVISIONS OF THIS ARTICLE. SUCH LICENSE SHALL REMAIN IN FULL
 FORCE AND EFFECT UNTIL IT IS SURRENDERED BY THE SERVICER OR  REVOKED  OR
 SUSPENDED AS HEREINAFTER PROVIDED.
   2.  THE  SUPERINTENDENT MAY REFUSE TO ISSUE A LICENSE PURSUANT TO THIS
 ARTICLE IF HE OR SHE SHALL FIND THAT THE APPLICANT, OR ANY PERSON WHO IS
 A DIRECTOR, OFFICER, PARTNER, AGENT,  EMPLOYEE,  MEMBER  OR  SUBSTANTIAL
 STOCKHOLDER OF THE APPLICANT:
   (A)  LACKS  THE  GOOD  MORAL  CHARACTER AND GENERAL FITNESS SUCH AS TO
 WARRANT BELIEF THAT THE LICENSED  ENTITY  WOULD  BE  OPERATED  HONESTLY,
 FAIRLY AND EFFICIENTLY WITHIN THE PURPOSES OF THIS ARTICLE;
   (B) HAS HAD A LICENSE OR REGISTRATION REVOKED BY THE SUPERINTENDENT OR
 ANY OTHER REGULATOR OR JURISDICTION;
   (C)  HAS  BEEN  AN  OFFICER,  DIRECTOR, PARTNER, MEMBER OR SUBSTANTIAL
 STOCKHOLDER OF AN ENTITY WHICH HAS HAD A LICENSE OR REGISTRATION REVOKED
 BY THE SUPERINTENDENT OR ANY OTHER REGULATOR OR JURISDICTION; OR

 A. 2071--A                          4
 
   (D) HAS BEEN AN AGENT, EMPLOYEE, OFFICER, DIRECTOR, PARTNER OR  MEMBER
 OF  AN  ENTITY  WHICH  HAS  HAD A LICENSE OR REGISTRATION REVOKED BY THE
 SUPERINTENDENT WHERE SUCH PERSON SHALL HAVE BEEN  FOUND  BY  THE  SUPER-
 INTENDENT TO BEAR RESPONSIBILITY IN CONNECTION WITH THE REVOCATION.
   3.  THE TERM "SUBSTANTIAL STOCKHOLDER", AS USED IN THIS SECTION, SHALL
 BE DEEMED TO REFER TO A PERSON OWNING OR CONTROLLING DIRECTLY  OR  INDI-
 RECTLY TEN PER CENTUM OR MORE OF THE TOTAL OUTSTANDING STOCK OF A CORPO-
 RATION.
   §  714.  CHANGES  IN OFFICERS AND DIRECTORS. UPON ANY CHANGE OF ANY OF
 THE EXECUTIVE OFFICERS, DIRECTORS, PARTNERS OR MEMBERS  OF  ANY  STUDENT
 LOAN SERVICER, THE STUDENT LOAN SERVICER SHALL SUBMIT TO THE SUPERINTEN-
 DENT  THE  NAME,  ADDRESS, AND OCCUPATION OF EACH NEW OFFICER, DIRECTOR,
 PARTNER OR MEMBER, AND PROVIDE SUCH OTHER INFORMATION AS THE SUPERINTEN-
 DENT MAY REQUIRE.
   § 715. CHANGES IN CONTROL. 1. IT SHALL BE UNLAWFUL,  EXCEPT  WITH  THE
 PRIOR  APPROVAL  OF THE SUPERINTENDENT, FOR ANY ACTION TO BE TAKEN WHICH
 RESULTS IN A CHANGE OF CONTROL OF THE BUSINESS OF A STUDENT LOAN  SERVI-
 CER.  PRIOR  TO  ANY CHANGE OF CONTROL, THE PERSON DESIROUS OF ACQUIRING
 CONTROL OF THE BUSINESS OF A STUDENT LOAN SERVICER  SHALL  MAKE  WRITTEN
 APPLICATION  TO  THE  SUPERINTENDENT  AND  PAY  AN  INVESTIGATION FEE AS
 PRESCRIBED PURSUANT TO SECTION EIGHTEEN-A OF THIS CHAPTER TO THE  SUPER-
 INTENDENT.  THE APPLICATION SHALL CONTAIN SUCH INFORMATION AS THE SUPER-
 INTENDENT, BY RULE OR REGULATION, MAY PRESCRIBE AS NECESSARY  OR  APPRO-
 PRIATE   FOR  THE  PURPOSE  OF  MAKING  THE  DETERMINATION  REQUIRED  BY
 SUBDIVISION TWO OF THIS SECTION. SUCH INFORMATION SHALL INCLUDE, BUT NOT
 BE LIMITED TO, THE INFORMATION AND OTHER MATERIAL REQUIRED FOR A STUDENT
 LOAN SERVICER BY SUBDIVISION ONE OF SECTION SEVEN HUNDRED TWELVE OF THIS
 ARTICLE.
   2. THE SUPERINTENDENT SHALL APPROVE OR DISAPPROVE THE PROPOSED  CHANGE
 OF  CONTROL OF A STUDENT LOAN SERVICER IN ACCORDANCE WITH THE PROVISIONS
 OF SECTION SEVEN HUNDRED THIRTEEN OF THIS ARTICLE.
   3. FOR A PERIOD OF SIX MONTHS FROM THE DATE OF  QUALIFICATION  THEREOF
 AND  FOR  SUCH  ADDITIONAL  PERIOD  OF  TIME  AS  THE SUPERINTENDENT MAY
 PRESCRIBE, IN WRITING, THE PROVISIONS OF SUBDIVISIONS  ONE  AND  TWO  OF
 THIS  SECTION  SHALL  NOT APPLY TO A TRANSFER OF CONTROL BY OPERATION OF
 LAW TO THE LEGAL REPRESENTATIVE, AS HEREINAFTER DEFINED, OF ONE WHO  HAS
 CONTROL  OF  A  STUDENT  LOAN SERVICER. THEREAFTER, SUCH LEGAL REPRESEN-
 TATIVE SHALL COMPLY WITH THE PROVISIONS OF SUBDIVISIONS ONE AND  TWO  OF
 THIS SECTION. THE PROVISIONS OF SUBDIVISIONS ONE AND TWO OF THIS SECTION
 SHALL BE APPLICABLE TO AN APPLICATION MADE UNDER THIS SECTION BY A LEGAL
 REPRESENTATIVE.  THE  TERM  "LEGAL  REPRESENTATIVE", FOR THE PURPOSES OF
 THIS SUBDIVISION, SHALL MEAN A PERSON  DULY  APPOINTED  BY  A  COURT  OF
 COMPETENT  JURISDICTION  TO  ACT  AS  EXECUTOR,  ADMINISTRATOR, TRUSTEE,
 COMMITTEE, CONSERVATOR OR RECEIVER, INCLUDING A PERSON  WHO  SUCCEEDS  A
 LEGAL REPRESENTATIVE AND A PERSON ACTING IN AN ANCILLARY CAPACITY THERE-
 TO IN ACCORDANCE WITH THE PROVISIONS OF SUCH COURT APPOINTMENT.
   4.  AS  USED  IN THIS SECTION THE TERM "CONTROL" MEANS THE POSSESSION,
 DIRECTLY OR INDIRECTLY, OF THE POWER TO DIRECT OR CAUSE THE DIRECTION OF
 THE MANAGEMENT AND POLICIES OF A STUDENT LOAN SERVICER, WHETHER  THROUGH
 THE  OWNERSHIP OF VOTING STOCK OF SUCH STUDENT LOAN SERVICER, THE OWNER-
 SHIP OF VOTING STOCK OF ANY PERSON WHICH POSSESSES SUCH POWER OR  OTHER-
 WISE.    CONTROL  SHALL  BE PRESUMED TO EXIST IF ANY PERSON, DIRECTLY OR
 INDIRECTLY, OWNS, CONTROLS OR HOLDS WITH POWER TO VOTE TEN PER CENTUM OR
 MORE OF THE VOTING STOCK OF ANY STUDENT LOAN SERVICER OR OF  ANY  PERSON
 WHICH  OWNS, CONTROLS OR HOLDS WITH POWER TO VOTE TEN PER CENTUM OR MORE
 OF THE VOTING STOCK OF ANY STUDENT LOAN SERVICER, BUT NO PERSON SHALL BE

 A. 2071--A                          5
 
 DEEMED TO CONTROL A STUDENT LOAN SERVICER SOLELY BY REASON OF  BEING  AN
 OFFICER  OR  DIRECTOR  OF SUCH STUDENT LOAN SERVICER. THE SUPERINTENDENT
 MAY IN HIS DISCRETION, UPON THE APPLICATION OF A STUDENT  LOAN  SERVICER
 OR  ANY PERSON WHO, DIRECTLY OR INDIRECTLY, OWNS, CONTROLS OR HOLDS WITH
 POWER TO VOTE OR SEEKS TO OWN, CONTROL OR HOLD WITH POWER  TO  VOTE  ANY
 VOTING STOCK OF SUCH STUDENT LOAN SERVICER, DETERMINE WHETHER OR NOT THE
 OWNERSHIP,  CONTROL OR HOLDING OF SUCH VOTING STOCK CONSTITUTES OR WOULD
 CONSTITUTE CONTROL OF SUCH STUDENT LOAN SERVICER FOR  PURPOSES  OF  THIS
 SECTION.
   §  716. GROUNDS FOR SUSPENSION OR REVOCATION OF LICENSE. 1. THE SUPER-
 INTENDENT MAY REVOKE ANY LICENSE TO ENGAGE IN THE BUSINESS OF A  STUDENT
 LOAN  SERVICER  ISSUED  PURSUANT  TO THIS ARTICLE IF A DETERMINATION HAS
 BEEN MADE, AFTER NOTICE AND A HEARING, THAT:
   (A) A SERVICER HAS VIOLATED ANY PROVISION OF THIS ARTICLE, ANY RULE OR
 REGULATION PROMULGATED  BY  THE  SUPERINTENDENT  UNDER  AND  WITHIN  THE
 AUTHORITY OF THIS ARTICLE, OR ANY OTHER APPLICABLE LAW;
   (B)  A  SERVICER  ENGAGES  IN FRAUD, INTENTIONAL MISREPRESENTATION, OR
 GROSS NEGLIGENCE IN SERVICING A STUDENT LOAN;
   (C) THE COMPETENCE, EXPERIENCE, CHARACTER, OR GENERAL FITNESS  OF  THE
 SERVICER, AN INDIVIDUAL CONTROLLING, DIRECTLY OR INDIRECTLY, TEN PERCENT
 OR  MORE  OF  THE  OUTSTANDING  INTERESTS, OR ANY PERSON RESPONSIBLE FOR
 SERVICING A STUDENT LOAN FOR THE SERVICER INDICATES THAT IT  IS  NOT  IN
 THE PUBLIC INTEREST TO PERMIT THE SERVICER TO CONTINUE SERVICING STUDENT
 LOANS;
   (D) THE SERVICER IS INSOLVENT, SUSPENDS PAYMENT OF ITS OBLIGATIONS, OR
 MAKES A GENERAL ASSIGNMENT FOR THE BENEFIT OF ITS CREDITORS; OR
   (E)  THE SERVICER HAS VIOLATED THE LAWS OF THIS STATE, ANY OTHER STATE
 LAW OR ANY FEDERAL LAW INVOLVING FRAUDULENT OR DISHONEST DEALING,  OR  A
 FINAL  JUDGMENT  HAS  BEEN  ENTERED AGAINST A STUDENT LOAN SERVICER IN A
 CIVIL ACTION UPON GROUNDS OF FRAUD, MISREPRESENTATION OR DECEIT.
   2. THE SUPERINTENDENT MAY, ON GOOD CAUSE SHOWN, OR WHERE  THERE  IS  A
 SUBSTANTIAL  RISK  OF  PUBLIC HARM, SUSPEND ANY LICENSE FOR A PERIOD NOT
 EXCEEDING THIRTY DAYS, PENDING INVESTIGATION. "GOOD CAUSE", AS  USED  IN
 THIS SUBDIVISION, SHALL EXIST WHEN A STUDENT LOAN SERVICER HAS DEFAULTED
 IN PERFORMING ITS FINANCIAL ENGAGEMENTS OR ENGAGES IN DISHONEST OR INEQ-
 UITABLE  PRACTICES  WHICH  MAY  CAUSE  SUBSTANTIAL  HARM  TO THE PERSONS
 AFFORDED THE PROTECTION OF THIS ARTICLE.
   3. NO LICENSE SHALL BE REVOKED OR SUSPENDED EXCEPT AFTER NOTICE AND  A
 HEARING  THEREON.    ANY  ORDER  OF SUSPENSION ISSUED AFTER NOTICE AND A
 HEARING MAY INCLUDE AS A CONDITION OF  REINSTATEMENT  THAT  THE  STUDENT
 LOAN  SERVICER  MAKE  RESTITUTION  TO CONSUMERS OF FEES OR OTHER CHARGES
 WHICH HAVE BEEN IMPROPERLY  CHARGED  OR  COLLECTED,  INCLUDING  BUT  NOT
 LIMITED  TO BY ALLOCATING PAYMENTS CONTRARY TO A BORROWER'S DIRECTION OR
 IN A MANNER THAT FAILS TO HELP A BORROWER AVOID DEFAULT,  AS  DETERMINED
 BY  THE  SUPERINTENDENT.  ANY HEARING HELD PURSUANT TO THE PROVISIONS OF
 THIS SECTION SHALL BE NOTICED, CONDUCTED AND ADMINISTERED IN  COMPLIANCE
 WITH THE STATE ADMINISTRATIVE PROCEDURE ACT.
   4.  ANY  STUDENT LOAN SERVICER MAY SURRENDER ANY LICENSE BY DELIVERING
 TO THE SUPERINTENDENT WRITTEN NOTICE  THAT  THE  STUDENT  LOAN  SERVICER
 THEREBY SURRENDERS SUCH LICENSE, BUT SUCH SURRENDER SHALL NOT AFFECT THE
 SERVICER'S  CIVIL  OR CRIMINAL LIABILITY FOR ACTS COMMITTED PRIOR TO THE
 SURRENDER. IF SUCH SURRENDER IS MADE AFTER THE ISSUANCE  BY  THE  SUPER-
 INTENDENT  OF  A  STATEMENT OF CHARGES AND NOTICE OF HEARING, THE SUPER-
 INTENDENT MAY PROCEED AGAINST THE SERVICER AS IF THE SURRENDER  HAD  NOT
 TAKEN PLACE.

 A. 2071--A                          6
 
   5. NO REVOCATION, SUSPENSION, OR SURRENDER OF ANY LICENSE SHALL IMPAIR
 OR AFFECT THE OBLIGATION OF ANY PRE-EXISTING LAWFUL CONTRACT BETWEEN THE
 STUDENT LOAN SERVICER AND ANY PERSON, INCLUDING THE DEPARTMENT OF FINAN-
 CIAL SERVICES.
   6.  EVERY LICENSE ISSUED PURSUANT TO THIS ARTICLE SHALL REMAIN IN FULL
 FORCE AND EFFECT UNTIL THE SAME SHALL HAVE BEEN SURRENDERED, REVOKED  OR
 SUSPENDED IN ACCORDANCE WITH ANY OTHER PROVISIONS OF THIS ARTICLE.
   7.  WHENEVER  THE  SUPERINTENDENT  SHALL  REVOKE  OR SUSPEND A LICENSE
 ISSUED PURSUANT TO THIS ARTICLE, HE OR SHE SHALL  FORTHWITH  EXECUTE  IN
 DUPLICATE  A WRITTEN ORDER TO THAT EFFECT. THE SUPERINTENDENT SHALL FILE
 ONE COPY OF THE ORDER IN THE  OFFICE  OF  THE  DEPARTMENT  OF  FINANCIAL
 SERVICES  AND SHALL FORTHWITH SERVE THE OTHER COPY UPON THE STUDENT LOAN
 SERVICER. ANY SUCH ORDER MAY BE REVIEWED IN THE MANNER PROVIDED BY ARTI-
 CLE SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES.
   § 717. BOOKS AND RECORDS;  REPORTS  AND  ELECTRONIC  FILING.  1.  EACH
 STUDENT  LOAN  SERVICER  SHALL  KEEP AND USE IN ITS BUSINESS SUCH BOOKS,
 ACCOUNTS AND RECORDS AS WILL  ENABLE  THE  SUPERINTENDENT  TO  DETERMINE
 WHETHER  THE  SERVICER  IS COMPLYING WITH THE PROVISIONS OF THIS ARTICLE
 AND WITH THE RULES AND REGULATIONS LAWFULLY MADE BY THE  SUPERINTENDENT.
 EVERY  SERVICER SHALL PRESERVE SUCH BOOKS, ACCOUNTS, AND RECORDS, FOR AT
 LEAST THREE YEARS.
   2. (A) EACH STUDENT LOAN SERVICER SHALL ANNUALLY, ON OR BEFORE A  DATE
 TO  BE  DETERMINED  BY THE SUPERINTENDENT, FILE A REPORT WITH THE SUPER-
 INTENDENT GIVING SUCH INFORMATION  AS  THE  SUPERINTENDENT  MAY  REQUIRE
 CONCERNING  THE  BUSINESS  AND  OPERATIONS DURING THE PRECEDING CALENDAR
 YEAR OF SUCH SERVICER UNDER AUTHORITY OF THIS ARTICLE. SUCH REPORT SHALL
 BE SUBSCRIBED AND AFFIRMED AS TRUE BY THE SERVICER UNDER  THE  PENALTIES
 OF PERJURY AND SHALL BE IN THE FORM PRESCRIBED BY THE SUPERINTENDENT.
   (B) IN ADDITION TO ANNUAL REPORTS, THE SUPERINTENDENT MAY REQUIRE SUCH
 ADDITIONAL REGULAR OR SPECIAL REPORTS AS HE OR SHE MAY DEEM NECESSARY TO
 THE  PROPER  SUPERVISION  OF  STUDENT LOAN SERVICERS UNDER THIS ARTICLE.
 SUCH ADDITIONAL REPORTS SHALL BE SUBSCRIBED AND AFFIRMED AS TRUE BY  THE
 SERVICER  UNDER  THE  PENALTIES  OF  PERJURY  AND  SHALL  BE IN THE FORM
 PRESCRIBED BY THE SUPERINTENDENT.
   3. NOTWITHSTANDING ARTICLE THREE OF THE STATE TECHNOLOGY  LAW  OR  ANY
 OTHER  LAW  TO  THE  CONTRARY,  THE  SUPERINTENDENT MAY REQUIRE THAT ANY
 SUBMISSION OR APPROVAL AS MAY BE REQUIRED BY THE SUPERINTENDENT BE  MADE
 OR  EXECUTED  BY  ELECTRONIC  MEANS  IF  HE OR SHE DEEMS IT NECESSARY TO
 ENSURE THE EFFICIENT ADMINISTRATION OF THIS ARTICLE.
   § 718. RULES AND REGULATIONS. 1. IN ADDITION TO  SUCH  POWERS  AS  MAY
 OTHERWISE  BE  PRESCRIBED  BY THIS CHAPTER, THE SUPERINTENDENT IS HEREBY
 AUTHORIZED AND EMPOWERED TO PROMULGATE SUCH RULES AND REGULATIONS AS MAY
 IN THE JUDGMENT OF THE SUPERINTENDENT BE CONSISTENT WITH THE PURPOSES OF
 THIS ARTICLE, OR APPROPRIATE FOR THE EFFECTIVE  ADMINISTRATION  OF  THIS
 ARTICLE, INCLUDING, BUT NOT LIMITED TO:
   (A)  SUCH  RULES  AND REGULATIONS IN CONNECTION WITH THE ACTIVITIES OF
 STUDENT LOAN SERVICERS AS MAY  BE  NECESSARY  AND  APPROPRIATE  FOR  THE
 PROTECTION OF BORROWERS IN THIS STATE;
   (B)  SUCH RULES AND REGULATIONS AS MAY BE NECESSARY AND APPROPRIATE TO
 DEFINE UNFAIR, DECEPTIVE OR ABUSIVE ACTS OR PRACTICES IN CONNECTION WITH
 THE ACTIVITIES OF STUDENT LOAN SERVICERS IN SERVICING STUDENT LOANS;
   (C) SUCH RULES AND REGULATIONS AS MAY DEFINE THE TERMS  USED  IN  THIS
 ARTICLE  AND AS MAY BE NECESSARY AND APPROPRIATE TO INTERPRET AND IMPLE-
 MENT THE PROVISIONS OF THIS ARTICLE; AND
   (D) SUCH RULES AND REGULATIONS AS MAY BE NECESSARY FOR THE ENFORCEMENT
 OF THIS ARTICLE.

 A. 2071--A                          7
 
   2. THE SUPERINTENDENT IS HEREBY AUTHORIZED AND EMPOWERED TO MAKE  SUCH
 SPECIFIC  RULINGS,  DEMANDS  AND FINDINGS AS THE SUPERINTENDENT MAY DEEM
 NECESSARY FOR THE PROPER CONDUCT OF THE STUDENT LOAN SERVICING INDUSTRY.
   § 719. PROHIBITED PRACTICES. NO STUDENT LOAN SERVICER SHALL:
   1.  DIRECTLY  EMPLOY  ANY  SCHEME,  DEVICE  OR  ARTIFICE TO DEFRAUD OR
 MISLEAD A BORROWER.
   2. INTENTIONALLY ENGAGE IN ANY UNFAIR, DECEPTIVE OR PREDATORY  ACT  OR
 PRACTICE TOWARD ANY PERSON OR MISREPRESENT OR OMIT ANY MATERIAL INFORMA-
 TION  IN CONNECTION WITH THE SERVICING OF A STUDENT LOAN, INCLUDING, BUT
 NOT LIMITED TO, MISREPRESENTING THE AMOUNT, NATURE OR TERMS OF  ANY  FEE
 OR  PAYMENT  DUE  OR  CLAIMED TO BE DUE ON A STUDENT LOAN, THE TERMS AND
 CONDITIONS OF THE LOAN AGREEMENT OR THE BORROWER'S OBLIGATIONS UNDER THE
 LOAN.
   3. INTENTIONALLY MISAPPLY PAYMENTS TO THE OUTSTANDING BALANCE  OF  ANY
 STUDENT LOAN OR TO ANY RELATED INTEREST OR FEES.
   4.  INTENTIONALLY PROVIDE MISLEADING INFORMATION TO A CONSUMER REPORT-
 ING AGENCY.
   5. REFUSE TO COMMUNICATE WITH  AN  AUTHORIZED  REPRESENTATIVE  OF  THE
 BORROWER  WHO  PROVIDES  A WRITTEN AUTHORIZATION SIGNED BY THE BORROWER,
 PROVIDED THAT THE SERVICER MAY ADOPT PROCEDURES  REASONABLY  RELATED  TO
 VERIFYING THAT THE REPRESENTATIVE IS IN FACT AUTHORIZED TO ACT ON BEHALF
 OF THE BORROWER.
   6.  KNOWINGLY MAKE ANY FALSE STATEMENT OR MAKE ANY OMISSION OF A MATE-
 RIAL FACT IN CONNECTION WITH ANY INFORMATION OR  REPORTS  FILED  WITH  A
 GOVERNMENTAL AGENCY OR IN CONNECTION WITH ANY INVESTIGATION CONDUCTED BY
 THE SUPERINTENDENT OR ANOTHER GOVERNMENTAL AGENCY.
   §  720.  SERVICING  STUDENT  LOANS WITHOUT A LICENSE. WHENEVER, IN THE
 OPINION OF THE SUPERINTENDENT, A PERSON IS ENGAGED IN  THE  BUSINESS  OF
 SERVICING  STUDENT LOANS, EITHER ACTUALLY OR THROUGH SUBTERFUGE, WITHOUT
 A LICENSE FROM THE SUPERINTENDENT, THE  SUPERINTENDENT  MAY  ORDER  THAT
 PERSON  TO DESIST AND REFRAIN FROM ENGAGING IN THE BUSINESS OF SERVICING
 STUDENT LOANS IN THE STATE. IF, WITHIN THIRTY DAYS  AFTER  AN  ORDER  IS
 SERVED,  A  REQUEST FOR A HEARING IS FILED IN WRITING AND THE HEARING IS
 NOT HELD WITHIN SIXTY DAYS OF THE FILING, THE ORDER SHALL BE RESCINDED.
   § 721. RESPONSIBILITIES. 1.  IF  A  STUDENT  LOAN  SERVICER  REGULARLY
 REPORTS  INFORMATION  TO A CONSUMER REPORTING AGENCY, THE SERVICER SHALL
 ACCURATELY REPORT A BORROWER'S  PAYMENT  PERFORMANCE  TO  AT  LEAST  ONE
 CONSUMER REPORTING AGENCY THAT COMPILES AND MAINTAINS FILES ON CONSUMERS
 ON  A  NATIONWIDE BASIS AS DEFINED IN SECTION 603(P) OF THE FEDERAL FAIR
 CREDIT REPORTING ACT (15 U.S.C. SEC. 1681A(P)),  UPON  ACCEPTANCE  AS  A
 DATA FURNISHER BY THAT CONSUMER REPORTING AGENCY.
   2. (A) EXCEPT AS PROVIDED IN FEDERAL LAW OR REQUIRED BY A STUDENT LOAN
 AGREEMENT,  A  STUDENT  LOAN SERVICER SHALL INQUIRE OF A BORROWER HOW TO
 APPLY A BORROWER'S NONCONFORMING PAYMENT. A BORROWER'S DIRECTION ON  HOW
 TO  APPLY  A NONCONFORMING PAYMENT SHALL REMAIN IN EFFECT FOR ANY FUTURE
 NONCONFORMING PAYMENT DURING THE  TERM  OF  A  STUDENT  LOAN  UNTIL  THE
 BORROWER PROVIDES DIFFERENT DIRECTIONS.
   (B)  FOR  PURPOSES  OF THIS SUBDIVISION, "NONCONFORMING PAYMENT" SHALL
 MEAN A PAYMENT THAT IS EITHER MORE OR LESS THAN THE BORROWER'S  REQUIRED
 STUDENT LOAN PAYMENT.
   3.  (A) IF THE SALE, ASSIGNMENT, OR OTHER TRANSFER OF THE SERVICING OF
 A STUDENT LOAN RESULTS IN A CHANGE IN THE IDENTITY OF THE PERSON TO WHOM
 THE BORROWER IS REQUIRED TO  SEND  SUBSEQUENT  PAYMENTS  OR  DIRECT  ANY
 COMMUNICATIONS  CONCERNING  THE  STUDENT  LOAN,  A STUDENT LOAN SERVICER
 SHALL TRANSFER  ALL  INFORMATION  REGARDING  A  BORROWER,  A  BORROWER'S
 ACCOUNT, AND A BORROWER'S STUDENT LOAN, INCLUDING BUT NOT LIMITED TO THE

 A. 2071--A                          8
 
 BORROWER'S  REPAYMENT  STATUS  AND ANY BORROWER BENEFITS ASSOCIATED WITH
 THE BORROWER'S STUDENT LOAN, TO THE NEW STUDENT LOAN SERVICER  SERVICING
 THE BORROWER'S STUDENT LOAN WITHIN FORTY-FIVE DAYS.
   (B)  A  STUDENT  LOAN  SERVICER SHALL ADOPT POLICIES AND PROCEDURES TO
 VERIFY THAT IT HAS RECEIVED ALL  INFORMATION  REGARDING  A  BORROWER,  A
 BORROWER'S  ACCOUNT,  AND  A  BORROWER'S STUDENT LOAN, INCLUDING BUT NOT
 LIMITED TO THE BORROWER'S REPAYMENT STATUS  AND  ANY  BORROWER  BENEFITS
 ASSOCIATED  WITH  THE BORROWER'S STUDENT LOAN, WHEN THE SERVICER OBTAINS
 THE RIGHT TO SERVICE A STUDENT LOAN.
   4. IF A STUDENT LOAN SERVICER SELLS, ASSIGNS, OR  OTHERWISE  TRANSFERS
 THE  SERVICING OF A STUDENT LOAN TO A NEW SERVICER, THE SALE, ASSIGNMENT
 OR OTHER TRANSFER SHALL BE COMPLETED AT  LEAST  SEVEN  DAYS  BEFORE  THE
 BORROWER'S NEXT PAYMENT IS DUE.
   5.  (A)  A  STUDENT  LOAN  SERVICER  THAT SELLS, ASSIGNS, OR OTHERWISE
 TRANSFERS THE SERVICING OF A STUDENT LOAN SHALL REQUIRE AS  A  CONDITION
 OF  SUCH  SALE,  ASSIGNMENT  OR OTHER TRANSFER THAT THE NEW STUDENT LOAN
 SERVICER SHALL HONOR ALL BORROWER  BENEFITS  ORIGINALLY  REPRESENTED  AS
 BEING  AVAILABLE  TO A BORROWER DURING THE REPAYMENT OF THE STUDENT LOAN
 AND THE POSSIBILITY OF SUCH BENEFITS, INCLUDING ANY BENEFITS  THAT  WERE
 REPRESENTED  AS  BEING  AVAILABLE BUT FOR WHICH THE BORROWER HAD NOT YET
 QUALIFIED.
   (B) A STUDENT LOAN SERVICER  THAT  OBTAINS  THE  RIGHT  TO  SERVICE  A
 STUDENT LOAN SHALL HONOR ALL BORROWER BENEFITS ORIGINALLY REPRESENTED AS
 BEING  AVAILABLE  TO A BORROWER DURING THE REPAYMENT OF THE STUDENT LOAN
 AND THE POSSIBILITY OF SUCH BENEFITS, INCLUDING ANY BENEFITS  THAT  WERE
 REPRESENTED  AS  BEING  AVAILABLE BUT FOR WHICH THE BORROWER HAD NOT YET
 QUALIFIED.
   6. A STUDENT LOAN SERVICER SHALL  RESPOND  WITHIN  THIRTY  DAYS  AFTER
 RECEIPT  TO A WRITTEN INQUIRY FROM A BORROWER OR A BORROWER'S AUTHORIZED
 REPRESENTATIVE.
   7. A STUDENT LOAN SERVICER SHALL PRESERVE RECORDS OF EACH STUDENT LOAN
 AND ALL COMMUNICATIONS WITH  BORROWERS  FOR  NOT  LESS  THAN  TWO  YEARS
 FOLLOWING THE FINAL PAYMENT ON A STUDENT LOAN OR THE SALE, ASSIGNMENT OR
 OTHER  TRANSFER  OF  THE  SERVICING  OF A STUDENT LOAN, WHICHEVER OCCURS
 FIRST, OR SUCH LONGER PERIOD AS MAY BE REQUIRED BY ANY  OTHER  PROVISION
 OF LAW.
   §  722.  EXAMINATIONS.  1.  THE SUPERINTENDENT MAY AT ANY TIME, AND AS
 OFTEN AS HE OR SHE MAY DETERMINE, EITHER PERSONALLY OR BY A PERSON  DULY
 DESIGNATED  BY  THE SUPERINTENDENT, INVESTIGATE THE BUSINESS AND EXAMINE
 THE BOOKS, ACCOUNTS, RECORDS, AND FILES USED THEREIN  OF  EVERY  STUDENT
 LOAN  SERVICER.  FOR THAT PURPOSE THE SUPERINTENDENT AND HIS OR HER DULY
 DESIGNATED REPRESENTATIVE SHALL HAVE FREE  ACCESS  TO  THE  OFFICES  AND
 PLACES  OF  BUSINESS, BOOKS, ACCOUNTS, PAPERS, RECORDS, FILES, SAFES AND
 VAULTS OF ALL STUDENT LOAN SERVICERS. THE SUPERINTENDENT AND ANY  PERSON
 DULY  DESIGNATED  BY  HIM OR HER SHALL HAVE THE AUTHORITY TO REQUIRE THE
 ATTENDANCE OF AND TO EXAMINE UNDER OATH ALL PERSONS WHOSE  TESTIMONY  HE
 OR SHE MAY REQUIRE RELATIVE TO SUCH BUSINESS.
   2.  NO  PERSON  SUBJECT  TO  INVESTIGATION  OR  EXAMINATION UNDER THIS
 SECTION MAY KNOWINGLY WITHHOLD, ABSTRACT, REMOVE, MUTILATE,  DESTROY  OR
 SECRETE ANY BOOKS, RECORDS, COMPUTER RECORDS OR OTHER INFORMATION.
   3.  THE  EXPENSES  INCURRED IN MAKING ANY EXAMINATION PURSUANT TO THIS
 SECTION SHALL BE ASSESSED AGAINST AND PAID BY THE STUDENT LOAN  SERVICER
 SO  EXAMINED, EXCEPT THAT TRAVELING AND SUBSISTENCE EXPENSES SO INCURRED
 SHALL BE CHARGED AGAINST AND PAID BY SERVICERS IN  SUCH  PROPORTIONS  AS
 THE  SUPERINTENDENT  SHALL  DEEM  JUST  AND REASONABLE, AND SUCH PROPOR-
 TIONATE CHARGES SHALL BE ADDED TO THE ASSESSMENT OF THE  OTHER  EXPENSES

 A. 2071--A                          9
 
 INCURRED  UPON  EACH EXAMINATION. UPON WRITTEN NOTICE BY THE SUPERINTEN-
 DENT OF THE TOTAL AMOUNT OF SUCH ASSESSMENT, THE SERVICER  SHALL  BECOME
 LIABLE FOR AND SHALL PAY SUCH ASSESSMENT TO THE SUPERINTENDENT.
   4. IN ANY HEARING IN WHICH A DEPARTMENT EMPLOYEE ACTING UNDER AUTHORI-
 TY  OF  THIS  CHAPTER  IS  AVAILABLE FOR CROSS-EXAMINATION, ANY OFFICIAL
 WRITTEN REPORT, WORKSHEET, OTHER RELATED PAPERS, OR DULY CERTIFIED  COPY
 THEREOF,  COMPILED, PREPARED, DRAFTED, OR OTHERWISE MADE BY SUCH DEPART-
 MENT EMPLOYEE, AFTER BEING DULY AUTHENTICATED BY THE  EMPLOYEE,  MAY  BE
 ADMITTED  AS  COMPETENT EVIDENCE UPON THE OATH OF THE EMPLOYEE THAT SUCH
 WORKSHEET,  INVESTIGATIVE  REPORT,  OR  OTHER  RELATED  DOCUMENTS   WERE
 PREPARED  AS  A  RESULT  OF AN EXAMINATION OF THE BOOKS AND RECORDS OF A
 SERVICER OR OTHER PERSON, CONDUCTED PURSUANT TO THE  AUTHORITY  OF  THIS
 CHAPTER.
   5.  UNLESS  OTHERWISE  EXEMPT  PURSUANT  TO SUBDIVISION TWO OF SECTION
 SEVEN HUNDRED ELEVEN OF THIS  ARTICLE,  AFFILIATES  OF  A  STUDENT  LOAN
 SERVICER  SHALL  BE  SUBJECT TO EXAMINATION BY THE SUPERINTENDENT ON THE
 SAME TERMS AS THE SERVICER, BUT ONLY WHEN REPORTS FROM,  OR  EXAMINATION
 OF, A SERVICER PROVIDES EVIDENCE OF UNLAWFUL ACTIVITY BETWEEN A SERVICER
 AND  AFFILIATE  BENEFITTING,  AFFECTING,  OR ARISING FROM THE ACTIVITIES
 REGULATED BY THIS ARTICLE.
   § 723. PENALTIES FOR VIOLATION OF THIS ARTICLE. 1. IN ADDITION TO SUCH
 PENALTIES AS MAY OTHERWISE BE APPLICABLE BY LAW, THE SUPERINTENDENT MAY,
 AFTER NOTICE  AND  HEARING,  REQUIRE  ANY  PERSON  FOUND  VIOLATING  THE
 PROVISIONS OF THIS ARTICLE OR THE RULES OR REGULATIONS PROMULGATED HERE-
 UNDER TO PAY TO THE PEOPLE OF THIS STATE A PENALTY FOR EACH VIOLATION OF
 THIS ARTICLE OR ANY REGULATION OR POLICY PROMULGATED HEREUNDER A SUM NOT
 TO EXCEED AN AMOUNT AS DETERMINED PURSUANT TO SECTION FORTY-FOUR OF THIS
 CHAPTER FOR EACH SUCH VIOLATION.
   2.  NOTHING  IN  THIS  ARTICLE SHALL LIMIT ANY STATUTORY OR COMMON-LAW
 RIGHT OF ANY PERSON TO BRING ANY ACTION IN ANY COURT FOR ANY ACT, OR THE
 RIGHT OF THE STATE TO PUNISH ANY PERSON FOR ANY VIOLATION OF ANY LAW.
   § 724. SEVERABILITY OF PROVISIONS. IF ANY PROVISION OF  THIS  ARTICLE,
 OR  THE  APPLICATION  OF  SUCH  PROVISION TO ANY PERSON OR CIRCUMSTANCE,
 SHALL BE HELD INVALID, ILLEGAL OR UNENFORCEABLE, THE  REMAINDER  OF  THE
 ARTICLE,  AND  THE  APPLICATION  OF SUCH PROVISION TO PERSONS OR CIRCUM-
 STANCES OTHER THAN THOSE AS TO WHICH IT  IS  HELD  INVALID,  ILLEGAL  OR
 UNENFORCEABLE, SHALL NOT BE AFFECTED THEREBY.
   §  725.  COMPLIANCE  WITH  OTHER LAWS. 1. STUDENT LOAN SERVICERS SHALL
 ENGAGE IN THE BUSINESS OF SERVICING STUDENT LOANS IN CONFORMITY WITH THE
 PROVISIONS OF THIS CHAPTER, SUCH RULES AND REGULATIONS AS MAY BE PROMUL-
 GATED BY THE SUPERINTENDENT THEREUNDER AND ALL APPLICABLE  FEDERAL  LAWS
 AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
   2.  NOTHING  IN THIS SECTION SHALL BE CONSTRUED TO LIMIT ANY OTHERWISE
 APPLICABLE STATE OR FEDERAL LAW OR REGULATIONS.
   § 2. Subdivision 10 of section 36 of the banking law,  as  amended  by
 chapter 182 of the laws of 2011, is amended to read as follows:
   10. All reports of examinations and investigations, correspondence and
 memoranda  concerning  or  arising  out of such examination and investi-
 gations, including any duly authenticated copy or copies thereof in  the
 possession  of  any  banking  organization,  bank holding company or any
 subsidiary thereof (as such terms "bank holding  company"  and  "subsid-
 iary"  are  defined in article three-A of this chapter), any corporation
 or any other entity affiliated with a banking  organization  within  the
 meaning  of  subdivision six of this section and any non-banking subsid-
 iary of a corporation or any other entity which is  an  affiliate  of  a
 banking  organization  within  the  meaning of subdivision six-a of this

 A. 2071--A                         10
 
 section, foreign banking corporation, licensed lender,  licensed  casher
 of   checks,  licensed  mortgage  banker,  registered  mortgage  broker,
 licensed mortgage  loan  originator,  licensed  sales  finance  company,
 registered  mortgage  loan  servicer,  LICENSED  STUDENT  LOAN SERVICER,
 licensed insurance  premium  finance  agency,  licensed  transmitter  of
 money,  licensed  budget  planner, any other person or entity subject to
 supervision under this chapter, or the department, shall be confidential
 communications, shall not be subject to subpoena and shall not  be  made
 public  unless,  in  the  judgment  of  the  superintendent, the ends of
 justice and the public advantage will be subserved  by  the  publication
 thereof,  in which event the superintendent may publish or authorize the
 publication of a copy of any such report or any  part  thereof  in  such
 manner  as may be deemed proper or unless such laws specifically author-
 ize such disclosure. For the purposes of this subdivision,  "reports  of
 examinations  and  investigations,  and any correspondence and memoranda
 concerning or arising out  of  such  examinations  and  investigations",
 includes any such materials of a bank, insurance or securities regulato-
 ry  agency  or  any unit of the federal government or that of this state
 any other state or that of any foreign government which  are  considered
 confidential  by  such agency or unit and which are in the possession of
 the department or which are otherwise confidential materials  that  have
 been  shared  by  the department with any such agency or unit and are in
 the possession of such agency or unit.
   § 3. Subdivisions 1, 2, 3 and 5 of section  39  of  the  banking  law,
 subdivisions  1,  2  and 5 as amended by chapter 123 of the laws of 2009
 and subdivision 3 as amended by chapter 155 of the  laws  of  2012,  are
 amended to read as follows:
   1.  To  appear  and  explain  an apparent violation. Whenever it shall
 appear to the superintendent that any banking organization, bank holding
 company, registered mortgage broker, licensed mortgage banker,  LICENSED
 STUDENT LOAN SERVICER, registered mortgage loan servicer, licensed mort-
 gage  loan  originator,  licensed  lender,  licensed  casher  of checks,
 licensed sales finance company, licensed insurance premium finance agen-
 cy, licensed transmitter of money, licensed budget planner, out-of-state
 state bank that maintains a branch  or  branches  or  representative  or
 other  offices in this state, or foreign banking corporation licensed by
 the superintendent to do business or maintain a representative office in
 this state has violated any law or regulation, he or she may, in his  or
 her  discretion,  issue  an order describing such apparent violation and
 requiring such banking organization, bank  holding  company,  registered
 mortgage  broker, licensed mortgage banker, LICENSED STUDENT LOAN SERVI-
 CER, licensed mortgage loan originator, licensed lender, licensed casher
 of checks, licensed sales finance company,  licensed  insurance  premium
 finance  agency, licensed transmitter of money, licensed budget planner,
 out-of-state state bank that maintains a branch or branches or represen-
 tative or other offices in this state, or foreign banking corporation to
 appear before him or her, at a time and place fixed in  said  order,  to
 present an explanation of such apparent violation.
   2.  To discontinue unauthorized or unsafe and unsound practices. When-
 ever it shall appear to the superintendent that  any  banking  organiza-
 tion,  bank  holding company, registered mortgage broker, licensed mort-
 gage banker, LICENSED STUDENT LOAN SERVICER,  registered  mortgage  loan
 servicer,  licensed  mortgage loan originator, licensed lender, licensed
 casher of checks, licensed sales  finance  company,  licensed  insurance
 premium  finance  agency, licensed transmitter of money, licensed budget
 planner, out-of-state state bank that maintains a branch or branches  or

 A. 2071--A                         11
 
 representative or other offices in this state, or foreign banking corpo-
 ration  licensed  by  the superintendent to do business in this state is
 conducting business in an unauthorized or unsafe and unsound manner,  he
 or  she  may,  in  his  or  her discretion, issue an order directing the
 discontinuance of such unauthorized or unsafe and unsound practices, and
 fixing a time and place at which such banking organization, bank holding
 company, registered mortgage broker, licensed mortgage banker,  LICENSED
 STUDENT LOAN SERVICER, registered mortgage loan servicer, licensed mort-
 gage  loan  originator,  licensed  lender,  licensed  casher  of checks,
 licensed sales finance company, licensed insurance premium finance agen-
 cy, licensed transmitter of money, licensed budget planner, out-of-state
 state bank that maintains a branch  or  branches  or  representative  or
 other  offices  in this state, or foreign banking corporation may volun-
 tarily appear before him or her to present any explanation in defense of
 the practices directed in said order to be discontinued.
   3. To make good impairment of capital or  to  ensure  compliance  with
 financial  requirements.  Whenever it shall appear to the superintendent
 that the capital or capital stock  of  any  banking  organization,  bank
 holding  company  or any subsidiary thereof which is organized, licensed
 or registered pursuant to this chapter, is impaired,  or  the  financial
 requirements  imposed by subdivision one of section two hundred two-b of
 this chapter or any regulation of the superintendent on  any  branch  or
 agency  of  a  foreign banking corporation or the financial requirements
 imposed by this chapter or any regulation of the superintendent  on  any
 licensed  lender,  registered mortgage broker, licensed mortgage banker,
 LICENSED STUDENT LOAN SERVICER,  licensed  casher  of  checks,  licensed
 sales  finance  company,  licensed  insurance  premium  finance  agency,
 licensed transmitter of money, licensed budget planner or private banker
 are not satisfied,  the  superintendent  may,  in  the  superintendent's
 discretion,  issue  an  order  directing that such banking organization,
 bank holding company, branch or agency of a foreign banking corporation,
 registered mortgage broker, licensed mortgage banker,  LICENSED  STUDENT
 LOAN  SERVICER,  licensed  lender,  licensed  casher of checks, licensed
 sales  finance  company,  licensed  insurance  premium  finance  agency,
 licensed transmitter of money, licensed budget planner, or private bank-
 er  make  good  such  deficiency forthwith or within a time specified in
 such order.
   5. To keep books and accounts as prescribed. Whenever it shall  appear
 to the superintendent that any banking organization, bank holding compa-
 ny,  registered  mortgage  broker,  licensed  mortgage  banker, LICENSED
 STUDENT LOAN SERVICER, registered mortgage loan servicer, licensed mort-
 gage loan  originator,  licensed  lender,  licensed  casher  of  checks,
 licensed sales finance company, licensed insurance premium finance agen-
 cy,  licensed  transmitter  of money, licensed budget planner, agency or
 branch of a foreign banking corporation licensed by  the  superintendent
 to  do  business  in this state, does not keep its books and accounts in
 such manner as to enable him or her to readily ascertain its true condi-
 tion, he or she may, in his or her discretion, issue an order  requiring
 such  banking  organization,  bank  holding company, registered mortgage
 broker, licensed mortgage banker, LICENSED STUDENT LOAN SERVICER, regis-
 tered  mortgage  loan  servicer,  licensed  mortgage  loan   originator,
 licensed  lender,  licensed  casher  of  checks,  licensed sales finance
 company, licensed insurance premium finance agency, licensed transmitter
 of money, licensed budget planner, or foreign  banking  corporation,  or
 the  officers  or  agents thereof, or any of them, to open and keep such
 books or accounts as he or she may, in his or her discretion,  determine

 A. 2071--A                         12
 
 and prescribe for the purpose of keeping accurate and convenient records
 of its transactions and accounts.
   §  4. Paragraph (a) of subdivision 1 of section 44 of the banking law,
 as amended by chapter 155 of the laws of 2012, is  amended  to  read  as
 follows:
   (a) Without limiting any power granted to the superintendent under any
 other provision of this chapter, the superintendent may, in a proceeding
 after  notice  and a hearing, require any safe deposit company, licensed
 lender, licensed casher  of  checks,  licensed  sales  finance  company,
 licensed  insurance  premium  finance  agency,  licensed  transmitter of
 money, licensed mortgage banker, LICENSED STUDENT LOAN SERVICER,  regis-
 tered  mortgage  broker,  licensed  mortgage loan originator, registered
 mortgage loan servicer or licensed budget planner to pay to  the  people
 of  this  state  a  penalty for any violation of this chapter, any regu-
 lation promulgated thereunder,  any  final  or  temporary  order  issued
 pursuant  to  section thirty-nine of this article, any condition imposed
 in writing by the superintendent in connection with  the  grant  of  any
 application  or  request, or any written agreement entered into with the
 superintendent.
   § 5. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  2071--B
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             January 22, 2019
                                ___________
 
 Introduced by M. of A. ZEBROWSKI, SEAWRIGHT, WALKER, ORTIZ, ENGLEBRIGHT,
   SIMON,  JAFFEE,  GOTTFRIED, COLTON, D'URSO, BLAKE, WRIGHT, DE LA ROSA,
   VANEL, FAHY,  PEOPLES-STOKES,  CUSICK,  L. ROSENTHAL,  GALEF,  MOSLEY,
   DINOWITZ, TAYLOR, SOLAGES, HYNDMAN, KIM, MONTESANO, DiPIETRO, EPSTEIN,
   D. ROSENTHAL  -- Multi-Sponsored by -- M. of A. BRAUNSTEIN, DenDEKKER,
   M. L. MILLER, THIELE -- read once and referred  to  the  Committee  on
   Banks  --  committee  discharged,  bill  amended, ordered reprinted as
   amended and recommitted to said committee -- again reported from  said
   committee  with amendments, ordered reprinted as amended and recommit-
   ted to said committee
 
 AN ACT to amend the banking law, in relation to student loan servicers
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. The banking law is amended by adding a new article 14-A to
 read as follows:
                               ARTICLE 14-A
                          STUDENT LOAN SERVICERS
 SECTION 710. DEFINITIONS.
         711. LICENSING.
         712. APPLICATION FOR A STUDENT LOAN SERVICER LICENSE; FEES.
         713. APPLICATION PROCESS TO RECEIVE LICENSE  TO  ENGAGE  IN  THE
                BUSINESS OF STUDENT LOAN SERVICING.
         714. CHANGES IN OFFICERS AND DIRECTORS.
         715. CHANGES IN CONTROL.
         716. GROUNDS FOR SUSPENSION OR REVOCATION OF LICENSE.
         717. BOOKS AND RECORDS; REPORTS AND ELECTRONIC FILING.
         718. RULES AND REGULATIONS.
         719. PROHIBITED PRACTICES.
         720. SERVICING STUDENT LOANS WITHOUT A LICENSE.
         721. RESPONSIBILITIES.
         722. EXAMINATIONS.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD01465-04-9

 A. 2071--B                          2
 
         723. PENALTIES FOR VIOLATION OF THIS ARTICLE.
         724. SEVERABILITY OF PROVISIONS.
         725. COMPLIANCE WITH OTHER LAWS.
   §  710. DEFINITIONS. 1. "APPLICANT" SHALL MEAN ANY PERSON APPLYING FOR
 A LICENSE UNDER THIS ARTICLE.
   2. "BORROWER" SHALL MEAN ANY RESIDENT OF THIS STATE WHO HAS RECEIVED A
 STUDENT LOAN OR AGREED IN WRITING TO PAY A STUDENT LOAN  OR  ANY  PERSON
 WHO  SHARES A LEGAL OBLIGATION WITH SUCH RESIDENT FOR REPAYING A STUDENT
 LOAN.
   3. "BORROWER BENEFIT" SHALL MEAN AN INCENTIVE OFFERED TO A BORROWER IN
 CONNECTION WITH THE ORIGINATION OF A STUDENT  LOAN,  INCLUDING  BUT  NOT
 LIMITED  TO  AN INTEREST RATE REDUCTION, PRINCIPAL REBATE, FEE WAIVER OR
 REBATE, LOAN CANCELLATION, OR COSIGNER RELEASE.
   4. "EXEMPT ORGANIZATION" SHALL MEAN ANY BANKING ORGANIZATION,  FOREIGN
 BANKING CORPORATION, NATIONAL BANK, FEDERAL SAVINGS ASSOCIATION, FEDERAL
 CREDIT UNION, OR ANY BANK, TRUST COMPANY, SAVINGS BANK, SAVINGS AND LOAN
 ASSOCIATION,  OR  CREDIT  UNION  ORGANIZED  UNDER  THE LAWS OF ANY OTHER
 STATE, OR ANY PERSON  LICENSED  OR  SUPERVISED  BY  THE  DEPARTMENT  AND
 EXEMPTED  BY  THE  SUPERINTENDENT PURSUANT TO REGULATIONS PROMULGATED IN
 ACCORDANCE WITH THIS ARTICLE.
   5. "PERSON"  SHALL  MEAN  ANY  INDIVIDUAL,  ASSOCIATION,  CORPORATION,
 LIMITED  LIABILITY COMPANY, PARTNERSHIP, TRUST, UNINCORPORATED ORGANIZA-
 TION, GOVERNMENT, AND ANY OTHER ENTITY.
   6. "SERVICER" OR "STUDENT LOAN SERVICER" SHALL MEAN A  PERSON  ENGAGED
 IN THE BUSINESS OF SERVICING STUDENT LOANS OWED BY ONE OR MORE BORROWERS
 RESIDING IN THIS STATE.
   7. "SERVICING" SHALL MEAN:
   (A) RECEIVING ANY PAYMENT FROM A BORROWER PURSUANT TO THE TERMS OF ANY
 STUDENT LOAN;
   (B)  APPLYING  ANY  PAYMENT  TO THE BORROWER'S ACCOUNT PURSUANT TO THE
 TERMS OF A STUDENT LOAN OR THE CONTRACT GOVERNING THE SERVICING  OF  ANY
 SUCH LOANS;
   (C) PROVIDING ANY NOTIFICATION OF AMOUNTS OWED ON A STUDENT LOAN BY OR
 ON ACCOUNT OF ANY BORROWER;
   (D) DURING A PERIOD WHERE A BORROWER IS NOT REQUIRED TO MAKE A PAYMENT
 ON  A STUDENT LOAN, MAINTAINING ACCOUNT RECORDS FOR THE STUDENT LOAN AND
 COMMUNICATING WITH THE BORROWER REGARDING THE STUDENT LOAN ON BEHALF  OF
 THE OWNER OF THE STUDENT LOAN PROMISSORY NOTE;
   (E)  INTERACTING  WITH  A  BORROWER  WITH  RESPECT TO OR REGARDING ANY
 ATTEMPT TO AVOID DEFAULT ON THE BORROWER'S STUDENT LOAN, OR FACILITATING
 THE ACTIVITIES DESCRIBED IN PARAGRAPH (A) OR (B) OF THIS SUBDIVISION; OR
   (F) PERFORMING OTHER ADMINISTRATIVE SERVICES WITH RESPECT TO A BORROW-
 ER'S STUDENT LOAN.
   8. "STUDENT LOAN" SHALL MEAN ANY LOAN TO A BORROWER TO FINANCE POSTSE-
 CONDARY EDUCATION OR EXPENSES RELATED TO POSTSECONDARY EDUCATION.
   9. "FEDERAL STUDENT LOAN" MEANS (A) ANY STUDENT LOAN  ISSUED  PURSUANT
 TO THE WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM; (B) ANY STUDENT LOAN
 ISSUED  PURSUANT TO THE FEDERAL FAMILY EDUCATION LOAN PROGRAM, WHICH WAS
 PURCHASED BY THE GOVERNMENT OF THE UNITED STATES PURSUANT TO THE FEDERAL
 ENSURING CONTINUED ACCESS TO STUDENT LOANS ACT AND IS PRESENTLY OWNED BY
 THE GOVERNMENT OF THE UNITED STATES; AND  (C)  ANY  OTHER  STUDENT  LOAN
 ISSUED  PURSUANT  TO  A FEDERAL PROGRAM THAT IS IDENTIFIED BY THE SUPER-
 INTENDENT AS A "FEDERAL STUDENT LOAN" IN A REGULATION.
   § 711. LICENSING. 1. EXCEPT AS PROVIDED IN SUBDIVISIONS TWO AND  THREE
 OF  THIS  SECTION,  NO  PERSON SHALL ENGAGE IN THE BUSINESS OF SERVICING
 STUDENT LOANS OWED BY ONE OR MORE BORROWERS RESIDING IN THIS STATE WITH-

 A. 2071--B                          3
 
 OUT FIRST BEING LICENSED BY THE SUPERINTENDENT AS A STUDENT LOAN  SERVI-
 CER  IN  ACCORDANCE  WITH  THIS  ARTICLE  AND SUCH REGULATIONS AS MAY BE
 PRESCRIBED BY THE SUPERINTENDENT.
   2.  THE  LICENSING  PROVISIONS  OF THIS ARTICLE SHALL NOT APPLY TO ANY
 EXEMPT ORGANIZATION THAT IS A STUDENT LOAN SERVICER; PROVIDED THAT  SUCH
 EXEMPT  ORGANIZATION  NOTIFIES  THE  SUPERINTENDENT THAT IT IS SERVICING
 STUDENT LOANS IN THIS STATE AND COMPLIES  WITH  SECTIONS  SEVEN  HUNDRED
 SEVENTEEN,  SEVEN  HUNDRED NINETEEN, SEVEN HUNDRED TWENTY-ONE, AND SEVEN
 HUNDRED TWENTY-FIVE OF THIS ARTICLE AND  ANY  REGULATION  APPLICABLE  TO
 STUDENT LOAN SERVICERS PROMULGATED BY THE SUPERINTENDENT.
   3.  A  LICENSE  IS NOT REQUIRED TO ENGAGE IN THE BUSINESS OF SERVICING
 FEDERAL STUDENT LOANS. A PERSON, OTHER THAN AN EXEMPT ORGANIZATION, THAT
 SERVICES FEDERAL STUDENT LOANS OWED BY ONE OR MORE BORROWERS RESIDING IN
 THIS STATE, WHICH IS NOT OTHERWISE REQUIRED TO BE LICENSED  PURSUANT  TO
 THIS  SECTION,  SHALL  NOTIFY  THE  SUPERINTENDENT  THAT IT IS SERVICING
 FEDERAL STUDENT LOANS IN THIS  STATE  AND  COMPLY  WITH  SECTIONS  SEVEN
 HUNDRED  SEVENTEEN,  SEVEN  HUNDRED  NINETEEN, SEVEN HUNDRED TWENTY-ONE,
 SEVEN HUNDRED TWENTY-TWO, SEVEN HUNDRED TWENTY-THREE AND  SEVEN  HUNDRED
 TWENTY-FIVE  OF  THIS  ARTICLE  AND ANY REGULATION APPLICABLE TO STUDENT
 LOAN SERVICERS PROMULGATED BY  THE  SUPERINTENDENT.  THE  PROVISIONS  OF
 SECTION  THIRTY-THREE, THIRTY-NINE, AND FORTY-FOUR OF THIS CHAPTER SHALL
 APPLY TO A PERSON REQUIRED  TO  NOTIFY  THE  SUPERINTENDENT  UNDER  THIS
 SUBDIVISION, AS THOUGH THEY WERE A LICENSED STUDENT LOAN SERVICER.  
   §  712. APPLICATION FOR A STUDENT LOAN SERVICER LICENSE; FEES.  1. THE
 APPLICATION FOR A LICENSE TO ENGAGE IN THE BUSINESS OF SERVICING STUDENT
 LOANS SHALL BE IN WRITING, UNDER OATH, AND IN THE FORM PRESCRIBED BY THE
 SUPERINTENDENT. NOTWITHSTANDING ARTICLE THREE OF  THE  STATE  TECHNOLOGY
 LAW  OR  ANY  OTHER  LAW TO THE CONTRARY, THE SUPERINTENDENT MAY REQUIRE
 THAT AN APPLICATION FOR A LICENSE OR ANY OTHER SUBMISSION OR APPLICATION
 FOR APPROVAL AS MAY BE REQUIRED BY THIS ARTICLE BE MADE OR  EXECUTED  BY
 ELECTRONIC MEANS IF HE OR SHE DEEMS IT NECESSARY TO ENSURE THE EFFICIENT
 AND  EFFECTIVE  ADMINISTRATION  OF  THIS  ARTICLE. THE APPLICATION SHALL
 INCLUDE A DESCRIPTION OF THE ACTIVITIES OF THE APPLICANT, IN SUCH DETAIL
 AND FOR SUCH PERIODS AS THE SUPERINTENDENT MAY REQUIRE; INCLUDING:
   (A) AN AFFIRMATION OF FINANCIAL SOLVENCY  NOTING  SUCH  CAPITALIZATION
 REQUIREMENTS  AS  MAY  BE  REQUIRED BY THE SUPERINTENDENT, AND ACCESS TO
 SUCH CREDIT AS MAY BE REQUIRED BY THE SUPERINTENDENT;
   (B) A FINANCIAL STATEMENT PREPARED BY A CERTIFIED  PUBLIC  ACCOUNTANT,
 THE  ACCURACY  OF WHICH IS SWORN TO UNDER OATH BEFORE A NOTARY PUBLIC BY
 AN OFFICER OR OTHER REPRESENTATIVE OF THE APPLICANT WHO IS AUTHORIZED TO
 EXECUTE SUCH DOCUMENTS;
   (C) AN AFFIRMATION THAT THE APPLICANT, OR ITS MEMBERS, OFFICERS, PART-
 NERS, DIRECTORS AND PRINCIPALS AS MAY BE APPROPRIATE, ARE AT LEAST TWEN-
 TY-ONE YEARS OF AGE;
   (D) INFORMATION AS TO THE CHARACTER, FITNESS, FINANCIAL  AND  BUSINESS
 RESPONSIBILITY,  BACKGROUND  AND  EXPERIENCES  OF  THE APPLICANT, OR ITS
 MEMBERS, OFFICERS, PARTNERS, DIRECTORS AND PRINCIPALS AS MAY  BE  APPRO-
 PRIATE;
   (E)  ANY  ADDITIONAL DETAIL OR INFORMATION REQUIRED BY THE SUPERINTEN-
 DENT.
   2. AN APPLICATION TO BECOME A LICENSED STUDENT LOAN  SERVICER  OR  ANY
 APPLICATION  WITH  RESPECT  TO  A  STUDENT LOAN SERVICER SHALL BE ACCOM-
 PLISHED BY A FEE AS PRESCRIBED PURSUANT TO SECTION  EIGHTEEN-A  OF  THIS
 CHAPTER.
   §  713.  APPLICATION PROCESS TO RECEIVE LICENSE TO ENGAGE IN THE BUSI-
 NESS OF STUDENT LOAN SERVICING. 1. UPON THE FILING OF AN APPLICATION FOR

 A. 2071--B                          4
 
 A LICENSE, IF THE SUPERINTENDENT SHALL FIND THAT THE FINANCIAL RESPONSI-
 BILITY, EXPERIENCE, CHARACTER, AND GENERAL FITNESS OF THE APPLICANT AND,
 IF APPLICABLE, THE MEMBERS, OFFICERS, PARTNERS, DIRECTORS AND PRINCIPALS
 OF  THE APPLICANT ARE SUCH AS TO COMMAND THE CONFIDENCE OF THE COMMUNITY
 AND TO WARRANT BELIEF THAT THE BUSINESS WILL BE OPERATED HONESTLY, FAIR-
 LY, AND EFFICIENTLY WITHIN THE PURPOSE OF THIS ARTICLE, THE  SUPERINTEN-
 DENT SHALL THEREUPON ISSUE A LICENSE IN DUPLICATE TO ENGAGE IN THE BUSI-
 NESS  OF  SERVICING STUDENT LOANS DESCRIBED IN SECTION SEVEN HUNDRED TEN
 OF THIS ARTICLE IN ACCORDANCE WITH THE PROVISIONS OF  THIS  ARTICLE.  IF
 THE SUPERINTENDENT SHALL NOT SO FIND, THE SUPERINTENDENT SHALL NOT ISSUE
 A  LICENSE,  AND  THE  SUPERINTENDENT SHALL SO NOTIFY THE APPLICANT. THE
 SUPERINTENDENT SHALL TRANSMIT ONE COPY OF A LICENSE TO THE APPLICANT AND
 FILE ANOTHER IN THE OFFICE OF THE DEPARTMENT OF FINANCIAL SERVICES. UPON
 RECEIPT OF SUCH LICENSE, A STUDENT LOAN SERVICER SHALL BE AUTHORIZED  TO
 ENGAGE IN THE BUSINESS OF SERVICING STUDENT LOANS IN ACCORDANCE WITH THE
 PROVISIONS  OF THIS ARTICLE. SUCH LICENSE SHALL REMAIN IN FULL FORCE AND
 EFFECT UNTIL IT IS SURRENDERED BY THE SERVICER OR REVOKED  OR  SUSPENDED
 AS HEREINAFTER PROVIDED.
   2.  THE  SUPERINTENDENT MAY REFUSE TO ISSUE A LICENSE PURSUANT TO THIS
 ARTICLE IF HE OR SHE SHALL FIND THAT THE APPLICANT, OR ANY PERSON WHO IS
 A DIRECTOR, OFFICER, PARTNER, AGENT, EMPLOYEE,  MEMBER,  OR  SUBSTANTIAL
 STOCKHOLDER OF THE APPLICANT:
   (A)  HAS  BEEN  CONVICTED  OF A CRIME INVOLVING AN ACTIVITY WHICH IS A
 FELONY UNDER THIS CHAPTER OR UNDER ARTICLE ONE HUNDRED  FIFTY-FIVE,  ONE
 HUNDRED  SEVENTY, ONE HUNDRED SEVENTY-FIVE, ONE HUNDRED SEVENTY-SIX, ONE
 HUNDRED EIGHTY, ONE HUNDRED EIGHTY-FIVE, ONE HUNDRED  EIGHTY-SEVEN,  ONE
 HUNDRED  NINETY, TWO HUNDRED, TWO HUNDRED TEN OR FOUR HUNDRED SEVENTY OF
 THE PENAL LAW OR ANY COMPARABLE FELONY UNDER THE LAWS OF ANY OTHER STATE
 OF THE UNITED STATES, PROVIDED THAT SUCH CRIME  WOULD  BE  A  FELONY  IF
 COMMITTED AND PROSECUTED UNDER THE LAWS OF THIS STATE;
   (B) HAS HAD A LICENSE OR REGISTRATION REVOKED BY THE SUPERINTENDENT OR
 ANY OTHER REGULATOR OR JURISDICTION;
   (C)  HAS  BEEN  AN  OFFICER,  DIRECTOR, PARTNER, MEMBER OR SUBSTANTIAL
 STOCKHOLDER OF AN ENTITY WHICH HAS HAD A LICENSE OR REGISTRATION REVOKED
 BY THE SUPERINTENDENT OR ANY OTHER REGULATOR OR JURISDICTION; OR
   (D) HAS BEEN AN AGENT, EMPLOYEE, OFFICER, DIRECTOR, PARTNER OR  MEMBER
 OF  AN  ENTITY  WHICH  HAS  HAD A LICENSE OR REGISTRATION REVOKED BY THE
 SUPERINTENDENT WHERE SUCH PERSON SHALL HAVE BEEN  FOUND  BY  THE  SUPER-
 INTENDENT TO BEAR RESPONSIBILITY IN CONNECTION WITH THE REVOCATION.
   3.  THE TERM "SUBSTANTIAL STOCKHOLDER", AS USED IN THIS SECTION, SHALL
 BE DEEMED TO REFER TO A PERSON OWNING OR CONTROLLING DIRECTLY  OR  INDI-
 RECTLY TEN PER CENTUM OR MORE OF THE TOTAL OUTSTANDING STOCK OF A CORPO-
 RATION.
   §  714.  CHANGES  IN OFFICERS AND DIRECTORS. UPON ANY CHANGE OF ANY OF
 THE EXECUTIVE OFFICERS, DIRECTORS, PARTNERS OR MEMBERS  OF  ANY  STUDENT
 LOAN SERVICER REQUIRED TO BE LICENSED UNDER SECTION SEVEN HUNDRED ELEVEN
 OF  THIS  ARTICLE,  THE STUDENT LOAN SERVICER SHALL SUBMIT TO THE SUPER-
 INTENDENT THE NAME, ADDRESS, AND OCCUPATION OF EACH NEW OFFICER,  DIREC-
 TOR, PARTNER OR MEMBER, AND PROVIDE SUCH OTHER INFORMATION AS THE SUPER-
 INTENDENT MAY REQUIRE.
   §  715.  CHANGES  IN  CONTROL. 1. IT SHALL BE UNLAWFUL EXCEPT WITH THE
 PRIOR APPROVAL OF THE SUPERINTENDENT FOR ANY ACTION TO  BE  TAKEN  WHICH
 RESULTS  IN A CHANGE OF CONTROL OF THE BUSINESS OF A STUDENT LOAN SERVI-
 CER REQUIRED TO BE LICENSED UNDER SECTION SEVEN HUNDRED ELEVEN  OF  THIS
 ARTICLE.  PRIOR TO ANY CHANGE OF CONTROL, THE PERSON DESIROUS OF ACQUIR-
 ING CONTROL OF THE BUSINESS OF A STUDENT LOAN SERVICER SHALL MAKE  WRIT-

 A. 2071--B                          5
 
 TEN  APPLICATION  TO  THE SUPERINTENDENT AND PAY AN INVESTIGATION FEE AS
 PRESCRIBED PURSUANT TO SECTION EIGHTEEN-A OF THIS CHAPTER TO THE  SUPER-
 INTENDENT.  THE APPLICATION SHALL CONTAIN SUCH INFORMATION AS THE SUPER-
 INTENDENT,  BY  RULE OR REGULATION, MAY PRESCRIBE AS NECESSARY OR APPRO-
 PRIATE  FOR  THE  PURPOSE  OF  MAKING  THE  DETERMINATION  REQUIRED   BY
 SUBDIVISION  TWO OF THIS SECTION. THIS INFORMATION SHALL INCLUDE BUT NOT
 BE LIMITED TO THE INFORMATION AND OTHER MATERIAL REQUIRED FOR A  STUDENT
 LOAN SERVICER BY SUBDIVISION ONE OF SECTION SEVEN HUNDRED TWELVE OF THIS
 ARTICLE.
   2.  THE SUPERINTENDENT SHALL APPROVE OR DISAPPROVE THE PROPOSED CHANGE
 OF CONTROL OF A STUDENT LOAN SERVICER  REQUIRED  TO  BE  LICENSED  UNDER
 SECTION  SEVEN  HUNDRED  ELEVEN  OF  THIS ARTICLE IN ACCORDANCE WITH THE
 PROVISIONS OF SECTION SEVEN HUNDRED THIRTEEN OF THIS ARTICLE.
   3. FOR A PERIOD OF SIX MONTHS FROM THE DATE OF  QUALIFICATION  THEREOF
 AND  FOR  SUCH  ADDITIONAL  PERIOD  OF  TIME  AS  THE SUPERINTENDENT MAY
 PRESCRIBE, IN WRITING, THE PROVISIONS OF SUBDIVISIONS  ONE  AND  TWO  OF
 THIS  SECTION  SHALL  NOT APPLY TO A TRANSFER OF CONTROL BY OPERATION OF
 LAW TO THE LEGAL REPRESENTATIVE, AS HEREINAFTER DEFINED, OF ONE WHO  HAS
 CONTROL  OF  A  STUDENT  LOAN SERVICER. THEREAFTER, SUCH LEGAL REPRESEN-
 TATIVE SHALL COMPLY WITH THE PROVISIONS OF SUBDIVISIONS ONE AND  TWO  OF
 THIS SECTION. THE PROVISIONS OF SUBDIVISIONS ONE AND TWO OF THIS SECTION
 SHALL BE APPLICABLE TO AN APPLICATION MADE UNDER SUCH SECTION BY A LEGAL
 REPRESENTATIVE.  THE  TERM  "LEGAL  REPRESENTATIVE", FOR THE PURPOSES OF
 THIS SUBDIVISION, SHALL MEAN ONE DULY APPOINTED BY A COURT OF  COMPETENT
 JURISDICTION  TO  ACT  AS  EXECUTOR,  ADMINISTRATOR, TRUSTEE, COMMITTEE,
 CONSERVATOR OR RECEIVER, INCLUDING ONE WHO SUCCEEDS  A  LEGAL  REPRESEN-
 TATIVE  AND  ONE  ACTING  IN AN ANCILLARY CAPACITY THERETO IN ACCORDANCE
 WITH THE PROVISIONS OF SUCH COURT APPOINTMENT.
   4. AS USED IN THIS SECTION THE TERM "CONTROL"  MEANS  THE  POSSESSION,
 DIRECTLY OR INDIRECTLY, OF THE POWER TO DIRECT OR CAUSE THE DIRECTION OF
 THE  MANAGEMENT AND POLICIES OF A STUDENT LOAN SERVICER, WHETHER THROUGH
 THE OWNERSHIP OF VOTING STOCK OF SUCH STUDENT LOAN SERVICER, THE  OWNER-
 SHIP  OF VOTING STOCK OF ANY PERSON WHICH POSSESSES SUCH POWER OR OTHER-
 WISE. CONTROL SHALL BE PRESUMED TO EXIST  IF  ANY  PERSON,  DIRECTLY  OR
 INDIRECTLY, OWNS, CONTROLS OR HOLDS WITH POWER TO VOTE TEN PER CENTUM OR
 MORE  OF  THE VOTING STOCK OF ANY STUDENT LOAN SERVICER OR OF ANY PERSON
 WHICH OWNS, CONTROLS OR HOLDS WITH POWER TO VOTE TEN PER CENTUM OR  MORE
 OF THE VOTING STOCK OF ANY STUDENT LOAN SERVICER, BUT NO PERSON SHALL BE
 DEEMED  TO  CONTROL A STUDENT LOAN SERVICER SOLELY BY REASON OF BEING AN
 OFFICER OR DIRECTOR OF SUCH STUDENT LOAN  SERVICER.  THE  SUPERINTENDENT
 MAY  IN  HIS  OR  HER DISCRETION, UPON THE APPLICATION OF A STUDENT LOAN
 SERVICER OR ANY PERSON WHO, DIRECTLY OR INDIRECTLY,  OWNS,  CONTROLS  OR
 HOLDS  WITH POWER TO VOTE OR SEEKS TO OWN, CONTROL OR HOLD WITH POWER TO
 VOTE ANY VOTING STOCK OF SUCH STUDENT LOAN SERVICER,  DETERMINE  WHETHER
 OR  NOT  THE  OWNERSHIP, CONTROL OR HOLDING OF SUCH VOTING STOCK CONSTI-
 TUTES OR WOULD CONSTITUTE CONTROL OF  SUCH  STUDENT  LOAN  SERVICER  FOR
 PURPOSES OF THIS SECTION.
   §  716.  GROUNDS  FOR  SUSPENSION  OR  REVOCATION OF LICENSE. 1. AFTER
 NOTICE AND HEARING, THE SUPERINTENDENT MAY REVOKE OR SUSPEND ANY LICENSE
 TO ENGAGE IN THE BUSINESS OF A STUDENT LOAN SERVICER ISSUED PURSUANT  TO
 THIS ARTICLE IF HE OR SHE SHALL FIND THAT:
   (A) A SERVICER HAS VIOLATED ANY PROVISION OF THIS ARTICLE, ANY RULE OR
 REGULATION  PROMULGATED  BY  THE  SUPERINTENDENT  UNDER  AND  WITHIN THE
 AUTHORITY OF THIS ARTICLE, OR ANY OTHER APPLICABLE LAW;

 A. 2071--B                          6
 
   (B) ANY FACT OR CONDITION EXISTS WHICH, IF IT HAD EXISTED AT THE  TIME
 OF  THE  ORIGINAL APPLICATION FOR SUCH LICENSE, WOULD HAVE WARRANTED THE
 SUPERINTENDENT REFUSING ORIGINALLY TO ISSUE SUCH LICENSE;
   (C) A SERVICER DOES NOT COOPERATE WITH AN EXAMINATION OR INVESTIGATION
 BY THE SUPERINTENDENT;
   (D)  A  SERVICER  ENGAGES  IN FRAUD, INTENTIONAL MISREPRESENTATION, OR
 GROSS NEGLIGENCE IN SERVICING A STUDENT LOAN;
   (E) THE COMPETENCE, EXPERIENCE, CHARACTER, OR GENERAL FITNESS  OF  THE
 SERVICER, AN INDIVIDUAL CONTROLLING, DIRECTLY OR INDIRECTLY, TEN PERCENT
 OR  MORE  OF  THE  OUTSTANDING  INTERESTS, OR ANY PERSON RESPONSIBLE FOR
 SERVICING A STUDENT LOAN FOR THE SERVICER INDICATES THAT IT  IS  NOT  IN
 THE PUBLIC INTEREST TO PERMIT THE SERVICER TO CONTINUE SERVICING STUDENT
 LOANS;
   (F) THE SERVICER ENGAGES IN AN UNSAFE OR UNSOUND PRACTICE;
   (G) THE SERVICER IS INSOLVENT, SUSPENDS PAYMENT OF ITS OBLIGATIONS, OR
 MAKES A GENERAL ASSIGNMENT FOR THE BENEFIT OF ITS CREDITORS; OR
   (H) A SERVICER HAS VIOLATED THE LAWS OF THIS STATE, ANY OTHER STATE OR
 ANY  FEDERAL  LAW  INVOLVING FRAUDULENT OR DISHONEST DEALING, OR A FINAL
 JUDGEMENT HAS BEEN ENTERED AGAINST A STUDENT LOAN SERVICER  IN  A  CIVIL
 ACTION UPON GROUNDS OF FRAUD, MISREPRESENTATION OR DECEIT.
   2.  THE  SUPERINTENDENT  MAY, ON GOOD CAUSE SHOWN, OR WHERE THERE IS A
 SUBSTANTIAL RISK OF PUBLIC HARM, SUSPEND ANY LICENSE FOR  A  PERIOD  NOT
 EXCEEDING  THIRTY  DAYS, PENDING INVESTIGATION. "GOOD CAUSE", AS USED IN
 THIS SUBDIVISION, SHALL EXIST WHEN A STUDENT LOAN SERVICER HAS DEFAULTED
 OR IS LIKELY TO DEFAULT  IN  PERFORMING  ITS  FINANCIAL  ENGAGEMENTS  OR
 ENGAGES  IN  DISHONEST OR INEQUITABLE PRACTICES WHICH MAY CAUSE SUBSTAN-
 TIAL HARM TO THE PERSONS AFFORDED THE PROTECTION OF THIS ARTICLE.
   3. EXCEPT AS PROVIDED IN SUBDIVISION TWO OF THIS SECTION,  NO  LICENSE
 SHALL  BE  REVOKED OR SUSPENDED EXCEPT AFTER NOTICE AND HEARING THEREON.
 ANY ORDER OF SUSPENSION ISSUED AFTER NOTICE AND A HEARING MAY INCLUDE AS
 A CONDITION OF REINSTATEMENT THAT THE STUDENT LOAN SERVICER MAKE  RESTI-
 TUTION  TO CONSUMERS OF FEES OR OTHER CHARGES WHICH HAVE BEEN IMPROPERLY
 CHARGED OR  COLLECTED,  INCLUDING  BUT  NOT  LIMITED  TO  BY  ALLOCATING
 PAYMENTS CONTRARY TO A BORROWER'S DIRECTION OR IN A MANNER THAT FAILS TO
 HELP  A BORROWER AVOID DEFAULT, AS DETERMINED BY THE SUPERINTENDENT. ANY
 HEARING HELD PURSUANT  TO  THE  PROVISIONS  OF  THIS  SECTION  SHALL  BE
 NOTICED,  CONDUCTED AND ADMINISTERED IN COMPLIANCE WITH THE STATE ADMIN-
 ISTRATIVE PROCEDURE ACT.
   4. ANY STUDENT LOAN SERVICER MAY SURRENDER ANY LICENSE  BY  DELIVERING
 TO  THE  SUPERINTENDENT  WRITTEN  NOTICE THAT IT THEREBY SURRENDERS SUCH
 LICENSE, BUT SUCH SURRENDER SHALL NOT AFFECT SUCH  SERVICER'S  CIVIL  OR
 CRIMINAL  LIABILITY  FOR ACTS COMMITTED PRIOR TO SUCH SURRENDER. IF SUCH
 SURRENDER IS MADE AFTER THE ISSUANCE BY THE SUPERINTENDENT OF  A  STATE-
 MENT  OF  CHARGES  AND NOTICE OF HEARING, THE SUPERINTENDENT MAY PROCEED
 AGAINST THE SERVICER AS IF SUCH SURRENDER HAD NOT TAKEN PLACE.
   5. NO REVOCATION, SUSPENSION, OR SURRENDER OF ANY LICENSE SHALL IMPAIR
 OR AFFECT THE OBLIGATION OF ANY PRE-EXISTING LAWFUL CONTRACT BETWEEN THE
 STUDENT LOAN SERVICER AND ANY PERSON, INCLUDING THE DEPARTMENT OF FINAN-
 CIAL SERVICES.
   6. EVERY LICENSE ISSUED PURSUANT TO THIS ARTICLE SHALL REMAIN IN FORCE
 AND EFFECT UNTIL THE  SAME  SHALL  HAVE  BEEN  SURRENDERED,  REVOKED  OR
 SUSPENDED IN ACCORDANCE WITH ANY OTHER PROVISIONS OF THIS ARTICLE.
   7.  WHENEVER  THE  SUPERINTENDENT  SHALL  REVOKE  OR SUSPEND A LICENSE
 ISSUED PURSUANT TO THIS ARTICLE, HE OR SHE SHALL  FORTHWITH  EXECUTE  IN
 DUPLICATE  A WRITTEN ORDER TO THAT EFFECT. THE SUPERINTENDENT SHALL FILE
 ONE COPY OF SUCH ORDER IN THE OFFICE OF THE DEPARTMENT AND SHALL  FORTH-

 A. 2071--B                          7
 
 WITH SERVE THE OTHER COPY UPON THE STUDENT LOAN SERVICER. ANY SUCH ORDER
 MAY  BE  REVIEWED IN THE MANNER PROVIDED BY ARTICLE SEVENTY-EIGHT OF THE
 CIVIL PRACTICE LAW AND RULES.
   §  717.  BOOKS  AND  RECORDS;  REPORTS  AND ELECTRONIC FILING. 1. EACH
 STUDENT LOAN SERVICER SHALL KEEP AND USE IN  ITS  BUSINESS  SUCH  BOOKS,
 ACCOUNTS  AND  RECORDS  AS  WILL  ENABLE THE SUPERINTENDENT TO DETERMINE
 WHETHER SUCH SERVICER OR  EXEMPT  ORGANIZATION  IS  COMPLYING  WITH  THE
 PROVISIONS  OF  THIS ARTICLE AND WITH THE RULES AND REGULATIONS LAWFULLY
 MADE BY THE SUPERINTENDENT. EVERY SERVICER SHALL  PRESERVE  SUCH  BOOKS,
 ACCOUNTS, AND RECORDS, FOR AT LEAST THREE YEARS.
   2.  (A) EACH STUDENT LOAN SERVICER, OTHER THAN AN EXEMPT ORGANIZATION,
 SHALL ANNUALLY, ON OR BEFORE A DATE TO BE DETERMINED BY THE  SUPERINTEN-
 DENT,  FILE  A REPORT WITH THE SUPERINTENDENT GIVING SUCH INFORMATION AS
 THE SUPERINTENDENT MAY REQUIRE CONCERNING THE  BUSINESS  AND  OPERATIONS
 DURING  THE  PRECEDING CALENDAR YEAR OF SUCH SERVICER UNDER AUTHORITY OF
 THIS ARTICLE. SUCH REPORT SHALL BE SUBSCRIBED AND AFFIRMED  AS  TRUE  BY
 THE  SERVICER  UNDER  THE  PENALTIES OF PERJURY AND SHALL BE IN THE FORM
 PRESCRIBED BY THE SUPERINTENDENT.
   (B) IN ADDITION TO ANNUAL REPORTS, THE SUPERINTENDENT MAY REQUIRE SUCH
 ADDITIONAL REGULAR OR SPECIAL REPORTS AS HE OR SHE MAY DEEM NECESSARY TO
 THE PROPER SUPERVISION OF STUDENT LOAN  SERVICERS  UNDER  THIS  ARTICLE.
 SUCH  ADDITIONAL REPORTS SHALL BE SUBSCRIBED AND AFFIRMED AS TRUE BY THE
 SERVICER UNDER THE PENALTIES  OF  PERJURY  AND  SHALL  BE  IN  THE  FORM
 PRESCRIBED BY THE SUPERINTENDENT.
   3.  NOTWITHSTANDING  ARTICLE  THREE OF THE STATE TECHNOLOGY LAW OR ANY
 OTHER LAW TO THE CONTRARY,  THE  SUPERINTENDENT  MAY  REQUIRE  THAT  ANY
 SUBMISSION  OR APPROVAL AS MAY BE REQUIRED BY THE SUPERINTENDENT BE MADE
 OR EXECUTED BY ELECTRONIC MEANS IF HE  OR  SHE  DEEMS  IT  NECESSARY  TO
 ENSURE THE EFFICIENT ADMINISTRATION OF THIS ARTICLE.
   §  718.  RULES  AND  REGULATIONS. 1. IN ADDITION TO SUCH POWERS AS MAY
 OTHERWISE BE PRESCRIBED BY LAW, THE SUPERINTENDENT IS HEREBY  AUTHORIZED
 AND  EMPOWERED  TO  PROMULGATE  SUCH RULES AND REGULATIONS AS MAY IN THE
 JUDGEMENT OF THE SUPERINTENDENT BE CONSISTENT WITH THE PURPOSES OF  THIS
 ARTICLE,  OR  APPROPRIATE FOR THE EFFECTIVE ADMINISTRATION OF THIS ARTI-
 CLE, INCLUDING, BUT NOT LIMITED TO:
   (A) SUCH RULES AND REGULATIONS IN CONNECTION WITH  THE  ACTIVITIES  OF
 STUDENT  LOAN  SERVICERS  AS  MAY  BE  NECESSARY AND APPROPRIATE FOR THE
 PROTECTION OF BORROWERS IN THIS STATE.
   (B) SUCH RULES AND REGULATIONS AS MAY BE NECESSARY AND APPROPRIATE  TO
 DEFINE UNFAIR, DECEPTIVE OR ABUSIVE ACTS OR PRACTICES IN CONNECTION WITH
 THE ACTIVITIES OF STUDENT LOAN SERVICERS.
   (C)  SUCH  RULES  AND REGULATIONS AS MAY DEFINE THE TERMS USED IN THIS
 ARTICLE AND AS MAY BE NECESSARY AND APPROPRIATE TO INTERPRET AND  IMPLE-
 MENT THE PROVISIONS OF THIS ARTICLE.
   (D) SUCH RULES AND REGULATIONS AS MAY BE NECESSARY FOR THE ENFORCEMENT
 OF THIS ARTICLE.
   2.  THE SUPERINTENDENT IS HEREBY AUTHORIZED AND EMPOWERED TO MAKE SUCH
 SPECIFIC RULINGS, DEMANDS AND FINDINGS AS THE  SUPERINTENDENT  MAY  DEEM
 NECESSARY FOR THE PROPER CONDUCT OF THE STUDENT LOAN SERVICING INDUSTRY.
   § 719. PROHIBITED PRACTICES. NO STUDENT LOAN SERVICER SHALL:
   1.  EMPLOY  ANY  SCHEME,  DEVICE  OR  ARTIFICE TO DEFRAUD OR MISLEAD A
 BORROWER;
   2. ENGAGE IN ANY UNFAIR, DECEPTIVE OR PREDATORY ACT OR PRACTICE TOWARD
 ANY  PERSON  OR  MISREPRESENT  OR  OMIT  ANY  MATERIAL  INFORMATION   IN
 CONNECTION  WITH  THE  SERVICING  OF  A STUDENT LOAN, INCLUDING, BUT NOT
 LIMITED TO, MISREPRESENTING THE AMOUNT, NATURE OR TERMS OF  ANY  FEE  OR

 A. 2071--B                          8
 
 PAYMENT DUE OR CLAIMED TO BE DUE ON A STUDENT LOAN, THE TERMS AND CONDI-
 TIONS  OF  THE  LOAN  AGREEMENT  OR THE BORROWER'S OBLIGATIONS UNDER THE
 LOAN;
   3. MISAPPLY PAYMENTS TO THE OUTSTANDING BALANCE OF ANY STUDENT LOAN OR
 TO ANY RELATED INTEREST OR FEES;
   4. PROVIDE INACCURATE INFORMATION TO A CONSUMER REPORTING AGENCY;
   5.  REFUSE  TO  COMMUNICATE  WITH  AN AUTHORIZED REPRESENTATIVE OF THE
 BORROWER WHO PROVIDES A WRITTEN AUTHORIZATION SIGNED  BY  THE  BORROWER,
 PROVIDED  THAT  THE  SERVICER MAY ADOPT PROCEDURES REASONABLY RELATED TO
 VERIFYING THAT THE REPRESENTATIVE IS IN FACT AUTHORIZED TO ACT ON BEHALF
 OF THE BORROWER;
   6. MAKE ANY FALSE STATEMENT OR MAKE ANY OMISSION OF A MATERIAL FACT IN
 CONNECTION WITH ANY INFORMATION OR REPORTS  FILED  WITH  A  GOVERNMENTAL
 AGENCY  OR  IN CONNECTION WITH ANY INVESTIGATION CONDUCTED BY THE SUPER-
 INTENDENT OR ANOTHER GOVERNMENTAL AGENCY;
   7. FAIL TO RESPOND WITHIN FIFTEEN CALENDAR DAYS TO COMMUNICATIONS FROM
 THE DEPARTMENT, OR WITHIN SUCH SHORTER, REASONABLE TIME AS  THE  DEPART-
 MENT MAY REQUEST IN HIS OR HER COMMUNICATION; OR
   8.  FAIL  TO  PROVIDE  A  RESPONSE  WITHIN  FIFTEEN CALENDAR DAYS TO A
 CONSUMER COMPLAINT SUBMITTED TO  THE  SERVICER  BY  THE  DEPARTMENT.  IF
 NECESSARY,  A  STUDENT LOAN SERVICER MAY REQUEST ADDITIONAL TIME UP TO A
 MAXIMUM OF FORTY-FIVE CALENDAR  DAYS,  PROVIDED  THAT  SUCH  REQUEST  IS
 ACCOMPANIED BY AN EXPLANATION WHY SUCH ADDITIONAL TIME IS REASONABLE AND
 NECESSARY.
   §  720. SERVICING STUDENT LOANS WITHOUT A LICENSE. 1. WHENEVER, IN THE
 OPINION OF THE SUPERINTENDENT, A PERSON IS ENGAGED IN  THE  BUSINESS  OF
 SERVICING  STUDENT  LOANS,  OTHER THAN FEDERAL LOANS, EITHER ACTUALLY OR
 THROUGH SUBTERFUGE, WITHOUT  A  LICENSE  FROM  THE  SUPERINTENDENT,  THE
 SUPERINTENDENT MAY ORDER THAT PERSON TO DESIST AND REFRAIN FROM ENGAGING
 IN  THE  BUSINESS  OF  SERVICING  STUDENT LOANS IN THE STATE. IF, WITHIN
 THIRTY DAYS AFTER AN ORDER IS SERVED, A REQUEST FOR A HEARING  IS  FILED
 IN  WRITING AND THE HEARING IS NOT HELD WITHIN SIXTY DAYS OF THE FILING,
 THE ORDER SHALL BE RESCINDED.
   2. THIS SECTION DOES NOT APPLY TO EXEMPT ORGANIZATIONS.
   § 721. RESPONSIBILITIES. 1.  IF  A  STUDENT  LOAN  SERVICER  REGULARLY
 REPORTS  INFORMATION  TO A CONSUMER REPORTING AGENCY, THE SERVICER SHALL
 ACCURATELY REPORT A BORROWER'S  PAYMENT  PERFORMANCE  TO  AT  LEAST  ONE
 CONSUMER REPORTING AGENCY THAT COMPILES AND MAINTAINS FILES ON CONSUMERS
 ON  A  NATIONWIDE BASIS AS DEFINED IN SECTION 603(P) OF THE FEDERAL FAIR
 CREDIT REPORTING ACT (15 U.S.C. SEC. 1681A(P)),  UPON  ACCEPTANCE  AS  A
 DATA FURNISHER BY THAT CONSUMER REPORTING AGENCY.
   2. (A) EXCEPT AS PROVIDED IN FEDERAL LAW OR REQUIRED BY A STUDENT LOAN
 AGREEMENT,  A  STUDENT  LOAN SERVICER SHALL INQUIRE OF A BORROWER HOW TO
 APPLY A BORROWER'S NONCONFORMING PAYMENT. A BORROWER'S DIRECTION ON  HOW
 TO  APPLY  A NONCONFORMING PAYMENT SHALL REMAIN IN EFFECT FOR ANY FUTURE
 NONCONFORMING PAYMENT DURING THE  TERM  OF  A  STUDENT  LOAN  UNTIL  THE
 BORROWER PROVIDES DIFFERENT DIRECTIONS.
   (B)  FOR  PURPOSES  OF THIS SUBDIVISION, "NONCONFORMING PAYMENT" SHALL
 MEAN A PAYMENT THAT IS EITHER MORE OR LESS THAN THE BORROWER'S  REQUIRED
 STUDENT LOAN PAYMENT.
   3.  (A) IF THE SALE, ASSIGNMENT, OR OTHER TRANSFER OF THE SERVICING OF
 A STUDENT LOAN RESULTS IN A CHANGE IN THE IDENTITY OF THE PERSON TO WHOM
 THE BORROWER IS REQUIRED TO  SEND  SUBSEQUENT  PAYMENTS  OR  DIRECT  ANY
 COMMUNICATIONS  CONCERNING  THE  STUDENT  LOAN,  A STUDENT LOAN SERVICER
 SHALL TRANSFER  ALL  INFORMATION  REGARDING  A  BORROWER,  A  BORROWER'S
 ACCOUNT, AND A BORROWER'S STUDENT LOAN, INCLUDING BUT NOT LIMITED TO THE

 A. 2071--B                          9
 
 BORROWER'S  REPAYMENT  STATUS  AND ANY BORROWER BENEFITS ASSOCIATED WITH
 THE BORROWER'S STUDENT LOAN, TO THE NEW STUDENT LOAN SERVICER  SERVICING
 THE BORROWER'S STUDENT LOAN WITHIN FORTY-FIVE DAYS.
   (B)  A  STUDENT  LOAN  SERVICER SHALL ADOPT POLICIES AND PROCEDURES TO
 VERIFY THAT IT HAS RECEIVED ALL  INFORMATION  REGARDING  A  BORROWER,  A
 BORROWER'S  ACCOUNT,  AND  A  BORROWER'S STUDENT LOAN, INCLUDING BUT NOT
 LIMITED TO THE BORROWER'S REPAYMENT STATUS  AND  ANY  BORROWER  BENEFITS
 ASSOCIATED  WITH  THE BORROWER'S STUDENT LOAN, WHEN THE SERVICER OBTAINS
 THE RIGHT TO SERVICE A STUDENT LOAN.
   4. IF A STUDENT LOAN SERVICER SELLS, ASSIGNS, OR  OTHERWISE  TRANSFERS
 THE  SERVICING OF A STUDENT LOAN TO A NEW SERVICER, THE SALE, ASSIGNMENT
 OR OTHER TRANSFER SHALL BE COMPLETED AT  LEAST  SEVEN  DAYS  BEFORE  THE
 BORROWER'S NEXT PAYMENT IS DUE.
   5.  (A)  A  STUDENT  LOAN  SERVICER  THAT SELLS, ASSIGNS, OR OTHERWISE
 TRANSFERS THE SERVICING OF A STUDENT LOAN SHALL REQUIRE AS  A  CONDITION
 OF  SUCH  SALE,  ASSIGNMENT  OR OTHER TRANSFER THAT THE NEW STUDENT LOAN
 SERVICER SHALL HONOR ALL BORROWER  BENEFITS  ORIGINALLY  REPRESENTED  AS
 BEING  AVAILABLE  TO A BORROWER DURING THE REPAYMENT OF THE STUDENT LOAN
 AND THE POSSIBILITY OF SUCH BENEFITS, INCLUDING ANY BENEFITS  THAT  WERE
 REPRESENTED  AS  BEING  AVAILABLE BUT FOR WHICH THE BORROWER HAD NOT YET
 QUALIFIED.
   (B) A STUDENT LOAN SERVICER  THAT  OBTAINS  THE  RIGHT  TO  SERVICE  A
 STUDENT LOAN SHALL HONOR ALL BORROWER BENEFITS ORIGINALLY REPRESENTED AS
 BEING  AVAILABLE  TO A BORROWER DURING THE REPAYMENT OF THE STUDENT LOAN
 AND THE POSSIBILITY OF SUCH BENEFITS, INCLUDING ANY BENEFITS  THAT  WERE
 REPRESENTED  AS  BEING  AVAILABLE BUT FOR WHICH THE BORROWER HAD NOT YET
 QUALIFIED.
   6. A STUDENT LOAN SERVICER SHALL  RESPOND  WITHIN  THIRTY  DAYS  AFTER
 RECEIPT  TO  A WRITTEN INQUIRY FROM A BORROWER OR A BORROWER'S REPRESEN-
 TATIVE.
   7. A STUDENT LOAN SERVICER SHALL PRESERVE RECORDS OF EACH STUDENT LOAN
 AND ALL COMMUNICATIONS WITH  BORROWERS  FOR  NOT  LESS  THAN  TWO  YEARS
 FOLLOWING THE FINAL PAYMENT ON SUCH STUDENT LOAN OR THE SALE, ASSIGNMENT
 OR  OTHER  TRANSFER  OF  THE  SERVICING  OF SUCH STUDENT LOAN, WHICHEVER
 OCCURS FIRST, OR SUCH LONGER PERIOD AS MAY  BE  REQUIRED  BY  ANY  OTHER
 PROVISION OF LAW.
   §  722.  EXAMINATIONS.  1.  THE SUPERINTENDENT MAY AT ANY TIME, AND AS
 OFTEN AS HE OR SHE MAY DETERMINE, EITHER PERSONALLY OR BY A PERSON  DULY
 DESIGNATED  BY  THE SUPERINTENDENT, INVESTIGATE THE BUSINESS AND EXAMINE
 THE BOOKS, ACCOUNTS, RECORDS, AND FILES USED THEREIN  OF  EVERY  STUDENT
 LOAN  SERVICER.  FOR THAT PURPOSE THE SUPERINTENDENT AND HIS OR HER DULY
 DESIGNATED REPRESENTATIVE SHALL HAVE FREE  ACCESS  TO  THE  OFFICES  AND
 PLACES  OF  BUSINESS, BOOKS, ACCOUNTS, PAPERS, RECORDS, FILES, SAFES AND
 VAULTS OF ALL SUCH SERVICERS. THE SUPERINTENDENT  AND  ANY  PERSON  DULY
 DESIGNATED  BY HIM OR HER SHALL HAVE AUTHORITY TO REQUIRE THE ATTENDANCE
 OF AND TO EXAMINE UNDER OATH ALL PERSONS WHOSE TESTIMONY HE OR  SHE  MAY
 REQUIRE RELATIVE TO SUCH BUSINESS.
   2.  NO  PERSON  SUBJECT  TO  INVESTIGATION  OR  EXAMINATION UNDER THIS
 SECTION MAY KNOWINGLY WITHHOLD, ABSTRACT, REMOVE, MUTILATE,  DESTROY  OR
 SECRETE ANY BOOKS, RECORDS, COMPUTER RECORDS OR OTHER INFORMATION.
   3.  THE  EXPENSES  INCURRED IN MAKING ANY EXAMINATION PURSUANT TO THIS
 SECTION SHALL BE ASSESSED AGAINST AND PAID BY THE STUDENT LOAN  SERVICER
 SO EXAMINED, EXCEPT THAT TRAVELLING AND SUBSISTENCE EXPENSES SO INCURRED
 SHALL  BE  CHARGED  AGAINST AND PAID BY SERVICERS IN SUCH PROPORTIONS AS
 THE SUPERINTENDENT SHALL DEEM JUST  AND  REASONABLE,  AND  SUCH  PROPOR-
 TIONATE  CHARGES  SHALL BE ADDED TO THE ASSESSMENT OF THE OTHER EXPENSES

 A. 2071--B                         10

 INCURRED UPON EACH EXAMINATION. UPON WRITTEN NOTICE BY  THE  SUPERINTEN-
 DENT  OF  THE TOTAL AMOUNT OF SUCH ASSESSMENT, THE SERVICER SHALL BECOME
 LIABLE FOR AND SHALL PAY SUCH ASSESSMENT TO THE SUPERINTENDENT.
   4. IN ANY HEARING IN WHICH A DEPARTMENT EMPLOYEE ACTING UNDER AUTHORI-
 TY  OF  THIS  CHAPTER  IS  AVAILABLE FOR CROSS-EXAMINATION, ANY OFFICIAL
 WRITTEN REPORT, WORKSHEET, OTHER RELATED PAPERS, OR DULY CERTIFIED  COPY
 THEREOF,  COMPILED, PREPARED, DRAFTED, OR OTHERWISE MADE BY SAID DEPART-
 MENT EMPLOYEE, AFTER BEING DULY AUTHENTICATED BY SAID EMPLOYEE,  MAY  BE
 ADMITTED  AS COMPETENT EVIDENCE UPON THE OATH OF SAID EMPLOYEE THAT SAID
 WORKSHEET,  INVESTIGATIVE  REPORT,  OR  OTHER  RELATED  DOCUMENTS   WERE
 PREPARED  AS  A  RESULT  OF AN EXAMINATION OF THE BOOKS AND RECORDS OF A
 SERVICER OR OTHER PERSON, CONDUCTED PURSUANT TO THE  AUTHORITY  OF  THIS
 CHAPTER.
   5.  UNLESS  IT IS AN EXEMPT ORGANIZATION, AFFILIATES OF A STUDENT LOAN
 SERVICER ARE SUBJECT TO EXAMINATION BY THE SUPERINTENDENT  ON  THE  SAME
 TERMS  AS THE SERVICER, BUT ONLY WHEN REPORTS FROM, OR EXAMINATION OF, A
 SERVICER PROVIDES EVIDENCE OF UNLAWFUL ACTIVITY BETWEEN A  SERVICER  AND
 AFFILIATE  BENEFITTING,  AFFECTING, OR ARISING FROM THE ACTIVITIES REGU-
 LATED BY THIS ARTICLE.
   6. THIS SECTION SHALL NOT APPLY TO EXEMPT ORGANIZATIONS. TO THE EXTENT
 THE SUPERINTENDENT IS AUTHORIZED BY ANY OTHER LAW TO MAKE AN EXAMINATION
 INTO THE AFFAIRS OF ANY EXEMPT ORGANIZATION, THIS SUBDIVISION SHALL  NOT
 BE CONSTRUED TO LIMIT IN ANY WAY THE SUPERINTENDENT'S AUTHORITY, REGARD-
 ING THE SUBJECTS OF SUCH AN EXAMINATION, OR OTHERWISE.
   § 723. PENALTIES FOR VIOLATION OF THIS ARTICLE. 1. IN ADDITION TO SUCH
 PENALTIES  AS  MAY  OTHERWISE  BE  APPLICABLE  BY LAW, INCLUDING BUT NOT
 LIMITED TO THE PENALTIES AVAILABLE  UNDER  SECTION  FORTY-FOUR  OF  THIS
 CHAPTER,  THE  SUPERINTENDENT MAY, AFTER NOTICE AND HEARING, REQUIRE ANY
 PERSON FOUND VIOLATING THE PROVISIONS OF THIS ARTICLE OR  THE  RULES  OR
 REGULATIONS  PROMULGATED  HEREUNDER TO PAY TO THE PEOPLE OF THIS STATE A
 PENALTY FOR EACH VIOLATION OF THE ARTICLE OR ANY  REGULATION  OR  POLICY
 PROMULGATED  HEREUNDER  A SUM NOT TO EXCEED THE GREATER OF (I) TEN THOU-
 SAND DOLLARS FOR EACH OFFENSE; (II) A MULTIPLE OF TWO TIMES  THE  AGGRE-
 GATE  DAMAGES  ATTRIBUTABLE TO THE VIOLATION; OR (III) A MULTIPLE OF TWO
 TIMES THE AGGREGATE ECONOMIC GAIN ATTRIBUTABLE TO THE VIOLATION.
   2. NOTHING IN THIS ARTICLE SHALL LIMIT  ANY  STATUTORY  OR  COMMON-LAW
 RIGHT OF ANY PERSON TO BRING ANY ACTION IN ANY COURT FOR ANY ACT, OR THE
 RIGHT OF THE STATE TO PUNISH ANY PERSON FOR ANY VIOLATION OF ANY LAW.
   §  724.  SEVERABILITY OF PROVISIONS. IF ANY PROVISION OF THIS ARTICLE,
 OR THE APPLICATION OF SUCH PROVISION  TO  ANY  PERSON  OR  CIRCUMSTANCE,
 SHALL  BE  HELD  INVALID, ILLEGAL OR UNENFORCEABLE, THE REMAINDER OF THE
 ARTICLE, AND THE APPLICATION OF SUCH PROVISION  TO  PERSONS  OR  CIRCUM-
 STANCES  OTHER  THAN  THOSE  AS  TO WHICH IT IS HELD INVALID, ILLEGAL OR
 UNENFORCEABLE, SHALL NOT BE AFFECTED THEREBY.
   § 725. COMPLIANCE WITH OTHER LAWS. 1.  STUDENT  LOAN  SERVICERS  SHALL
 ENGAGE IN THE BUSINESS OF SERVICING STUDENT LOANS IN CONFORMITY WITH THE
 PROVISIONS  OF  THE FINANCIAL SERVICES LAW, THIS CHAPTER, SUCH RULES AND
 REGULATIONS AS MAY BE PROMULGATED BY THE SUPERINTENDENT  THEREUNDER  AND
 ALL  APPLICABLE  FEDERAL  LAWS AND THE RULES AND REGULATIONS PROMULGATED
 THEREUNDER.
   2. NOTHING IN THIS SECTION SHALL BE CONSTRUED TO LIMIT  ANY  OTHERWISE
 APPLICABLE STATE OR FEDERAL LAW OR REGULATIONS.
   §  2.  Subdivision  10 of section 36 of the banking law, as amended by
 chapter 182 of the laws of 2011, is amended to read as follows:
   10. All reports of examinations and investigations, correspondence and
 memoranda concerning or arising out of  such  examination  and  investi-

 A. 2071--B                         11
 
 gations,  including any duly authenticated copy or copies thereof in the
 possession of any banking organization,  bank  holding  company  or  any
 subsidiary  thereof  (as  such terms "bank holding company" and "subsid-
 iary"  are  defined in article three-A of this chapter), any corporation
 or any other entity affiliated with a banking  organization  within  the
 meaning  of  subdivision six of this section and any non-banking subsid-
 iary of a corporation or any other entity which is  an  affiliate  of  a
 banking  organization  within  the  meaning of subdivision six-a of this
 section, foreign banking corporation, licensed lender,  licensed  casher
 of   checks,  licensed  mortgage  banker,  registered  mortgage  broker,
 licensed mortgage  loan  originator,  licensed  sales  finance  company,
 registered  mortgage  loan  servicer,  LICENSED  STUDENT  LOAN SERVICER,
 licensed insurance  premium  finance  agency,  licensed  transmitter  of
 money,  licensed  budget  planner, any other person or entity subject to
 supervision under this chapter, or the department, shall be confidential
 communications, shall not be subject to subpoena and shall not  be  made
 public  unless,  in  the  judgment  of  the  superintendent, the ends of
 justice and the public advantage will be subserved  by  the  publication
 thereof,  in which event the superintendent may publish or authorize the
 publication of a copy of any such report or any  part  thereof  in  such
 manner  as may be deemed proper or unless such laws specifically author-
 ize such disclosure. For the purposes of this subdivision,  "reports  of
 examinations  and  investigations,  and any correspondence and memoranda
 concerning or arising out  of  such  examinations  and  investigations",
 includes any such materials of a bank, insurance or securities regulato-
 ry  agency  or  any unit of the federal government or that of this state
 any other state or that of any foreign government which  are  considered
 confidential  by  such agency or unit and which are in the possession of
 the department or which are otherwise confidential materials  that  have
 been  shared  by  the department with any such agency or unit and are in
 the possession of such agency or unit.
   § 3. Section 39 of the banking law, as amended by section 1 of part FF
 of chapter 59 of the laws of 2004, subdivisions 1, 2 and 5 as amended by
 chapter 123 of the laws of 2009, subdivision 3 as amended by chapter 155
 of the laws of 2012 and subdivision 6 as amended by chapter 217  of  the
 laws of 2010, is amended to read as follows:
   § 39.  Orders  of superintendent. 1. To appear and explain an apparent
 violation. Whenever it shall appear to the superintendent that any bank-
 ing organization, bank  holding  company,  registered  mortgage  broker,
 licensed  mortgage  banker,  LICENSED  STUDENT LOAD SERVICER, registered
 mortgage loan servicer,  licensed  mortgage  loan  originator,  licensed
 lender,  licensed  casher  of  checks,  licensed  sales finance company,
 licensed insurance  premium  finance  agency,  licensed  transmitter  of
 money, licensed budget planner, out-of-state state bank that maintains a
 branch  or branches or representative or other offices in this state, or
 foreign banking corporation licensed by the superintendent to  do  busi-
 ness  or maintain a representative office in this state has violated any
 law or regulation, he or she may, in his or  her  discretion,  issue  an
 order  describing  such  apparent  violation  and requiring such banking
 organization, bank holding company, registered mortgage broker, licensed
 mortgage banker, LICENSED STUDENT LOAN SERVICER, licensed mortgage  loan
 originator,  licensed  lender, licensed casher of checks, licensed sales
 finance company, licensed insurance  premium  finance  agency,  licensed
 transmitter  of  money, licensed budget planner, out-of-state state bank
 that maintains a branch or branches or representative or  other  offices
 in  this  state,  or foreign banking corporation to appear before him or

 A. 2071--B                         12
 
 her, at a time and place fixed in said order, to present an  explanation
 of such apparent violation.
   2.  To discontinue unauthorized or unsafe and unsound practices. When-
 ever it shall appear to the superintendent that  any  banking  organiza-
 tion,  bank  holding company, registered mortgage broker, licensed mort-
 gage banker, LICENSED STUDENT LOAN SERVICER,  registered  mortgage  loan
 servicer,  licensed  mortgage loan originator, licensed lender, licensed
 casher of checks, licensed sales  finance  company,  licensed  insurance
 premium  finance  agency, licensed transmitter of money, licensed budget
 planner, out-of-state state bank that maintains a branch or branches  or
 representative or other offices in this state, or foreign banking corpo-
 ration  licensed  by  the superintendent to do business in this state is
 conducting business in an unauthorized or unsafe and unsound manner,  he
 or  she  may,  in  his  or  her discretion, issue an order directing the
 discontinuance of such unauthorized or unsafe and unsound practices, and
 fixing a time and place at which such banking organization, bank holding
 company, registered mortgage broker, licensed mortgage banker,  LICENSED
 STUDENT LOAN SERVICER, registered mortgage loan servicer, licensed mort-
 gage  loan  originator,  licensed  lender,  licensed  casher  of checks,
 licensed sales finance company, licensed insurance premium finance agen-
 cy, licensed transmitter of money, licensed budget planner, out-of-state
 state bank that maintains a branch  or  branches  or  representative  or
 other  offices  in this state, or foreign banking corporation may volun-
 tarily appear before him or her to present any explanation in defense of
 the practices directed in said order to be discontinued.
   3. To make good impairment of capital or  to  ensure  compliance  with
 financial  requirements.  Whenever it shall appear to the superintendent
 that the capital or capital stock  of  any  banking  organization,  bank
 holding  company  or any subsidiary thereof which is organized, licensed
 or registered pursuant to this chapter, is impaired,  or  the  financial
 requirements  imposed by subdivision one of section two hundred two-b of
 this chapter or any regulation of the superintendent on  any  branch  or
 agency  of  a  foreign banking corporation or the financial requirements
 imposed by this chapter or any regulation of the superintendent  on  any
 licensed  lender,  registered mortgage broker, licensed mortgage banker,
 LICENSED STUDENT LOAN SERVICER,  licensed  casher  of  checks,  licensed
 sales  finance  company,  licensed  insurance  premium  finance  agency,
 licensed transmitter of money, licensed budget planner or private banker
 are not satisfied,  the  superintendent  may,  in  the  superintendent's
 discretion,  issue  an  order  directing that such banking organization,
 bank holding company, branch or agency of a foreign banking corporation,
 registered mortgage broker, licensed mortgage banker,  LICENSED  STUDENT
 LOAN  SERVICER,  licensed  lender,  licensed  casher of checks, licensed
 sales  finance  company,  licensed  insurance  premium  finance  agency,
 licensed transmitter of money, licensed budget planner, or private bank-
 er  make  good  such  deficiency forthwith or within a time specified in
 such order.
   4. To make good encroachments on reserves. Whenever it shall appear to
 the superintendent that either the total reserves or reserves on hand of
 any banking organization, branch or agency of a foreign  banking  corpo-
 ration  are  below the amount required by or pursuant to this chapter or
 any other applicable provision of law or regulation to be maintained, or
 that such banking organization, branch or agency of  a  foreign  banking
 corporation  is  not  keeping  its  reserves on hand as required by this
 chapter or any other applicable provision of law or  regulation,  he  or
 she  may,  in  his or her discretion, issue an order directing that such

 A. 2071--B                         13
 
 banking organization, branch or agency of a foreign banking  corporation
 make  good  such  reserves  forthwith or within a time specified in such
 order, or that it keep its reserves on hand as required by this chapter.
   5.  To keep books and accounts as prescribed. Whenever it shall appear
 to the superintendent that any banking organization, bank holding compa-
 ny, registered  mortgage  broker,  licensed  mortgage  banker,  LICENSED
 STUDENT LOAN SERVICER, registered mortgage loan servicer, licensed mort-
 gage  loan  originator,  licensed  lender,  licensed  casher  of checks,
 licensed sales finance company, licensed insurance premium finance agen-
 cy, licensed transmitter of money, licensed budget  planner,  agency  or
 branch  of  a foreign banking corporation licensed by the superintendent
 to do business in this state, does not keep its books  and  accounts  in
 such manner as to enable him or her to readily ascertain its true condi-
 tion,  he or she may, in his or her discretion, issue an order requiring
 such banking organization, bank  holding  company,  registered  mortgage
 broker, licensed mortgage banker, LICENSED STUDENT LOAN SERVICER, regis-
 tered   mortgage  loan  servicer,  licensed  mortgage  loan  originator,
 licensed lender, licensed  casher  of  checks,  licensed  sales  finance
 company, licensed insurance premium finance agency, licensed transmitter
 of  money,  licensed  budget planner, or foreign banking corporation, or
 the officers or agents thereof, or any of them, to open  and  keep  such
 books  or accounts as he or she may, in his or her discretion, determine
 and prescribe for the purpose of keeping accurate and convenient records
 of its transactions and accounts.
   6. As used in this section, "bank holding company" shall have the same
 meaning as that term is defined in section one hundred forty-one of this
 chapter.
   § 4. Paragraph (a) of subdivision 1 of section 44 of the banking  law,
 as  amended  by  chapter  155 of the laws of 2012, is amended to read as
 follows:
   (a) Without limiting any power granted to the superintendent under any
 other provision of this chapter, the superintendent may, in a proceeding
 after notice and a hearing, require any safe deposit  company,  licensed
 lender,  licensed  casher  of  checks,  licensed  sales finance company,
 licensed insurance  premium  finance  agency,  licensed  transmitter  of
 money,  licensed mortgage banker, LICENSED STUDENT LOAN SERVICER, regis-
 tered mortgage broker, licensed  mortgage  loan  originator,  registered
 mortgage  loan  servicer or licensed budget planner to pay to the people
 of this state a penalty for any violation of  this  chapter,  any  regu-
 lation  promulgated  thereunder,  any  final  or  temporary order issued
 pursuant to section thirty-nine of this article, any  condition  imposed
 in  writing  by  the  superintendent in connection with the grant of any
 application or request, or any written agreement entered into  with  the
 superintendent.
   § 5. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.