S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    431
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                (PREFILED)
 
                              January 8, 2025
                                ___________
 
 Introduced  by M. of A. EPSTEIN -- read once and referred to the Commit-
   tee on Banks
 
 AN ACT to amend the financial  services  law,  in  relation  to  private
   education debt reporting
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The article heading of article 9 and sections 901, 902  and
 904  of the financial services law, as added by a chapter of the laws of
 2024 amending the financial services law relating to creating a  private
 education  debt  registry,  as  proposed in legislative bills numbers S.
 8197 and A. 8913, are amended to read as follows:
                                  ARTICLE 9
                PRIVATE EDUCATION DEBT [REGISTRY] REPORTING
 
   § 901. Definitions. As used in this article:
   1.[ "Fiscal year" means  the  twelve-month  period  that  the  private
 education creditor uses for financial reporting and budgeting.
   2.]  "Higher  education" means higher education[, including] OR career
 education, as those terms are defined in section two  of  the  education
 law, via correspondence, online, or in person, regardless of whether the
 PROVIDER  OF SUCH higher education [institution] is [accredited] LOCATED
 within New York state.
   [3.] 2. "Higher education expense" means any expense THAT IS  INCURRED
 BY A CONSUMER arising from higher education.
   3.  "STUDENT  LOAN  SERVICER"  HAS  THE  SAME  MEANING AS SUCH TERM IS
 DEFINED IN SUBDIVISION SIX OF SECTION SEVEN HUNDRED TEN OF  THE  BANKING
 LAW.
   4.  "Private education creditor" means any person engaged in the busi-
 ness of [securing, making, or] extending a private education  debt[,  or
 any  holder  of  a private education debt, including providers of higher

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD02724-01-5
 A. 431                              2

 education to which a student education debt is owed. "Private  education
 creditor"  shall  not  include the following persons, only to the extent
 that state regulation is preempted by federal law:
   (a) any federally chartered bank, savings bank, savings and loan asso-
 ciation, or credit union;
   (b)  any  bank,  savings bank, savings and loan association, or credit
 union organized under the laws of this or any other state;
   (c) any wholly owned subsidiary of a federally chartered bank or cred-
 it union; and
   (d) any operating subsidiary where each owner of the operating subsid-
 iary is wholly owned by the same  federally  chartered  bank  or  credit
 union].
   5. "Private education debt" means an extension of credit TO or debt or
 obligation  owed  or  incurred  by a consumer, contractual or otherwise,
 [contingent or absolute,] that [meets all of the following criteria]:
   (a) is not made, insured, or guaranteed under Title IV of  the  Higher
 Education Act of 1965 (20 U.S.C. s.1070 et seq.);
   (b)  is extended to a consumer expressly, in whole or in part, for, or
 accrues from nonpayment of, higher  education  expenses,  regardless  of
 whether  the credit or debt or obligation is owed to [the] A provider of
 higher education [that the student attends]; and
   (c) [shall] IS not [include any] A loan that is secured by real  prop-
 erty or a dwelling.
   "Private education debt" shall include extensions of credit or debt or
 obligations owed or incurred to refinance a private education debt.
   6. "Provider of higher education" [or "school"] means a person engaged
 in  [the business of] PROVIDING OR OFFERING TO PROVIDE higher education.
 [For the purposes of this definition, a person need  not  have  obtained
 authorization  from the department of education to operate in this state
 and need not be an accredited institution.]
   § 902. Private education debt [registry] REPORTING. 1.  [Beginning  on
 or  after the one hundred eightieth day after the effective date of this
 article, no person shall engage in business as a private education cred-
 itor in this state without first satisfying the  following  requirements
 set forth in subdivisions two and three of this section.
   2.  (a)  A  private  education  creditor operating in this state shall
 register with the superintendent pursuant to any registration procedures
 set forth by the superintendent by rule or regulation, which may include
 registration through the  Nationwide  Multistate  Licensing  System  and
 Registry, and shall pay a fee set by the superintendent. The superinten-
 dent may prescribe an alternative registration process and fee structure
 for  a  provider  of  higher education. Registration shall include, at a
 minimum, the name and address of the private education creditor and  any
 officer,  director,  partner,  or owner of a controlling interest of the
 private education creditor.  A private education creditor shall annually
 renew its registration and pay a renewal fee pursuant to a procedure and
 on or before a date to be determined by the superintendent.
   (b) This subdivision shall not apply to  regulated  persons,  as  such
 term  is defined in section one hundred four of this chapter, engaged in
 business as a private education creditor in this state,  to  the  extent
 such  regulation relates to its business as a private education creditor
 and such persons are required to furnish data or reports annually to the
 superintendent.
   3. A private education creditor operating in this state shall  annual-
 ly,  on  or before a date to be determined by the superintendent and not
 to exceed six months following  the  effective  date  of  this  article,
 A. 431                              3

 provide  the superintendent with the following documents and information
 about such  creditor's  private  education  debt  portfolio  related  to
 consumers  that reside in this state pursuant to any procedure set forth
 by  the  superintendent, which may include reporting through the Nation-
 wide Multistate Licensing System and Registry,  and  which  may  further
 include  different  procedures  for  regulated  persons, as that term is
 defined in section one hundred four of this chapter,  and  non-regulated
 persons] EACH STUDENT LOAN SERVICER SHALL, BY THE FIRST OF APRIL OF EACH
 YEAR,  SUBMIT  AN  ANNUAL  REPORT  WHICH  COMPLIES WITH ANY INSTRUCTIONS
 PUBLISHED BY THE  SUPERINTENDENT,  IN  THE  MANNER  SET  FORTH  IN  SUCH
 INSTRUCTIONS,  CERTIFYING  AS ACCURATE THE FOLLOWING INFORMATION FOR THE
 PRIVATE EDUCATION DEBT SUCH STUDENT LOAN SERVICER  SERVICED  DURING  THE
 PRIOR CALENDAR YEAR:
   (a)  [For  private  education  creditors  that secure, make, or extend
 private education  debts,  other  than  those  private  education  debts
 reported pursuant to paragraph (c) of this subdivision, relating to such
 debts  owed  by  a  consumer residing in this state as of the end of the
 prior fiscal year] A LIST OF ALL PRIVATE EDUCATION CREDITORS  ASSOCIATED
 WITH  THE  PRIVATE EDUCATION DEBTS SERVICED BY THE STUDENT LOAN SERVICER
 THAT ARE OWED BY PERSONS WHO RESIDED IN NEW YORK DURING THE PRIOR CALEN-
 DAR YEAR; AND
   (B) FOR EACH PRIVATE EDUCATION CREDITOR REPORTED PURSUANT TO PARAGRAPH
 (A) OF THIS SUBDIVISION, THE FOLLOWING INFORMATION:
   (i) a list of [all schools for which such private education debts were
 used to finance] THE PROVIDERS OF higher education[, including,  in  the
 case  of a refinancing loan, the school that the consumer attended using
 the private education debt that  was  refinanced]  ASSOCIATED  WITH  THE
 PRIVATE EDUCATION DEBTS SERVICED BY THE STUDENT LOAN SERVICER;
   (ii)  the total outstanding dollar amount and number of [such] private
 education debts and the number of consumers who owe such private  educa-
 tion debts;
   (iii)  the  total dollar amount and number of [such] private education
 debts [associated with each school identified under subparagraph (i)  of
 this paragraph] CREATED IN THE PRIOR CALENDAR YEAR;
   (iv)  THE NUMBER OF PRIVATE EDUCATION DEBTS THAT EXPERIENCED A DEFAULT
 AND THE PERCENTAGE OF SUCH PRIVATE EDUCATION DEBTS ASSOCIATED WITH  EACH
 PRIVATE EDUCATION CREDITOR;
   (V)  the  total  dollar  amount  and number of private education debts
 [secured, made, or extended] THAT DEFAULTED FOR REASONS OTHER THAN  NON-
 PAYMENT in the prior [fiscal] CALENDAR year;
   [(v)]  (VI)  the  total  dollar amount and number of private education
 debts [secured, made, or extended in the prior fiscal  year  associated]
 with [each school identified under subparagraph (i) of this paragraph] A
 COSIGNER OR GUARANTOR;
   [(vi)]  (VII)  the [range of starting interest rates for] TOTAL DOLLAR
 AMOUNT AND NUMBER OF private education debts [secured, made, or extended
 to consumers] WITH A COSIGNER OR GUARANTOR CREATED in the prior [fiscal]
 CALENDAR year [and percentage of consumers who receive those rates;
   (vii) the overall default rate, as well as  the  overall  default  for
 such  debts associated with each  school  listed  under subparagraph (i)
 of this paragraph];
   (viii) the total dollar amount and number of private  education  debts
 [that  defaulted  for  reasons  other    than   non-payment in the prior
 fiscal year, as applicable;
   (ix) the total dollar amount and number  of  private  education  debts
 with a cosigner, as applicable;
 A. 431                              4

   (x)  the  total  dollar  amount  and number of private education debts
 secured, made, or extended with a cosigner in the prior fiscal year,  as
 applicable;
   (xi)  the  total  dollar  amount and number of private education debts
 secured, made, or extended] CREATED to refinance other private education
 debts or federal student loans, respectively[, as applicable];
   [(xii)] (IX) the total dollar amount and number of  private  education
 debts  [secured,  made,  or extended] CREATED to refinance other private
 education debts or federal student loans,  respectively,  in  the  prior
 [fiscal] CALENDAR year[, as applicable];
   [(xiii)]  (X)  the total dollar amount and number of DEFAULTED private
 education debts for which the [private education creditor  has  sued  to
 collect]  STUDENT  LOAN  SERVICER  COMMENCED,  MAINTAINED,  OR SETTLED A
 LAWSUIT FOR COLLECTION in the prior [fiscal] CALENDAR year[, as applica-
 ble]; AND
   [(xiv) additional] (XI) information as may  in  the  judgment  of  the
 superintendent be necessary and appropriate in order to assess the total
 size  and  status  of  the  private  education debt market and to assess
 borrower well-being[; and
   (xv) A copy of any model promissory note, agreement, contract or other
 instrument used by a private  education  creditor  during  the  previous
 fiscal  year  to substantiate that a new private education debt has been
 extended to the consumer or that a consumer owes a debt or obligation to
 the private education creditor.
   (b) For private education creditors that  acquire  or  assume  private
 education  debts  owed by a consumer residing in this state, relating to
 such debts as of the end of the prior fiscal year:
   (i) a list of all schools for which such private education debts  were
 used  to finance higher education, including, in the case of a refinanc-
 ing loan, the school that the consumer attended using the private educa-
 tion debt that was refinanced;
   (ii) the total outstanding dollar amount and number  of  such  private
 education  debts  and number of consumers who owe such private education
 debts;
   (iii) the total dollar amount and number of  private  education  debts
 associated  with  each  school identified under subparagraph (i) of this
 paragraph;
   (iv) the total dollar amount and number  of  private  education  debts
 acquired or assumed in the prior fiscal year;
   (v)  the  total  dollar  amount  and number of private education debts
 acquired or assumed in the prior fiscal year associated with each school
 identified under subparagraph (i) of this paragraph;
   (vi) the overall default rate, as well as the overall default for such
 debts associated with each school listed under subparagraph (i) of  this
 paragraph;
   (vii)  the  total  dollar amount and number of private education debts
 that defaulted for reasons other than nonpayment  in  the  prior  fiscal
 year, as applicable;
   (viii)  the  total dollar amount and number of private education debts
 with a cosigner, as applicable;
   (ix) the total dollar amount and number  of  private  education  debts
 that  were  used to refinance other private education debts, as applica-
 ble;
   (x) the total dollar amount and number of private education debts  for
 which  the  private  education creditor has sued to collect in the prior
 fiscal year, as applicable; and
 A. 431                              5

   (xi) additional information as may in the judgment of the  superinten-
 dent  be necessary and appropriate in order to assess the total size and
 status of the private education debt market and to assess borrower well-
 being.
   (c)  For  private  education  creditors  that  are providers of higher
 education and whose private education debts result from unpaid debts  or
 obligations  that  were  not  extensions  of credit and that result from
 higher education provided in this state, relating to such  debts  as  of
 the end of the prior fiscal year, reported by race and gender:
   (i)  the  total outstanding dollar amount and number of private educa-
 tion debts and number of consumers who owe those debts;
   (ii) the total dollar amount and number  of  private  education  debts
 accrued  and number of consumers who owe those debts in the prior fiscal
 year;
   (iii) the total number and balance of student accounts with an academ-
 ic or administrative hold resulting from a private education debt;
   (iv) the total number and balance of student accounts with an academic
 or administrative hold resulting from a private education debt for which
 a payment was made in the prior fiscal year and average payment made;
   (v) the total number of student accounts for which  federal  financial
 aid was returned to the federal government upon the student's withdrawal
 from  the provider of higher education in the prior fiscal year, and the
 total dollar amount of any private education debt accrued as a result;
   (vi) the number of consumers who owe  a  private  education  debt  who
 received a federal pell grant and the average debt owed;
   (vii) the number of consumers who owe a private education debt who are
 considered  in-state  and out-of-state students, and the total debt owed
 by each group;
   (viii) the total dollar amount, number of private education debts, and
 number of consumers for which the private education creditor has in  the
 prior fiscal year (A) charged off the debt, (B) sent the debt to a third
 party  collection  agency,  (C)  initiated  a  collection  lawsuit,  (D)
 reported the debt to a consumer credit reporting agency,  and  (E)  sold
 the debt;
   (ix)  the  total dollar amount, number of private education debts, and
 number of consumers for which the private education creditor has, in the
 prior fiscal year, collected on a private education debt in the  follow-
 ing  instances:  (A)  payment  arrangements  wherein the payment was not
 considered  past  due,  such  as  tuition  installment  agreements;  (B)
 payments made on past due debts during the same academic term or billing
 cycle  in  which  the  debt accrued and before such debts were sent to a
 collection agency; (C) payments made on past due debts before they  were
 sent  to  a  collection agency, excluding those payments made during the
 same academic term or billing cycle in which the  debt  accrued;  (D)  a
 third  party collection agency, prior to initiating a lawsuit; and (E) a
 collection lawsuit, including payments made by settlement or pursuant to
 a judgment;
   (x) additional information as may in the judgment of  the  superinten-
 dent  be necessary and appropriate in order to assess the total size and
 status of the private education debt market and to assess borrower well-
 being; and
   (xi) a copy of any model written instrument  used  by  a  provider  of
 higher  education  in  the  prior  fiscal year to substantiate a private
 education debt, including but not limited to a promissory note,  enroll-
 ment agreement, or contract.]
 A. 431                              6
 
   4. Not later than [one year] TWO YEARS following the effective date of
 this  section,  the  superintendent  shall  create a publicly accessible
 website that includes at least the following information [about  private
 education creditors registered in this state]:
   (a)  The  name, address, telephone number and website for all[ private
 education creditors] STUDENT LOAN SERVICERS; AND
   (b) A summary of the information required by subdivision  [three]  ONE
 of this section[; and
   (c)  Copies of all documents provided under subparagraph (xv) of para-
 graph (a) of subdivision three of this section and subparagraph (xi)  of
 paragraph (c) of subdivision three of this section].
   §  904.  Violations.  1. If the superintendent finds, after notice and
 hearing, that a [private education creditor] STUDENT LOAN  SERVICER  has
 knowingly violated this article by failing to comply with any [registra-
 tion  or]  reporting  requirement  or by KNOWINGLY furnishing MATERIALLY
 inaccurate information to the  superintendent,  the  superintendent  may
 impose  a  civil  penalty of not more than ten thousand dollars for each
 violation.
   2. The superintendent may order that any person who has been found  to
 have  knowingly  violated any provision of this article, or of the rules
 and regulations issued pursuant thereto, and has thereby  caused  finan-
 cial  harm  to  consumers,  be barred for a term not exceeding ten years
 from acting as a [private education creditor] STUDENT LOAN SERVICER,  or
 a  stockholder,  or  an officer, director, partner or other owner, or an
 employee of a [private education creditor] STUDENT LOAN SERVICER.
   § 2. This act shall take effect on the  same  date  and  in  the  same
 manner  as a chapter of the laws of 2024 amending the financial services
 law relating to creating a private education debt registry, as  proposed
 in legislative bills numbers S. 8197 and A. 8913, takes effect.