Student Education Loan Servicing NACARA September 2019 Cindy

Student Education Loan Servicing NACARA September 2019 Cindy Fazio Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

Disclaimer The information provided during this presentation is for informational purposes only – it is not legal advice. You should contact an attorney to obtain advice with respect to any particular business practice. The opinions expressed during the presentation are the opinions of the individuals and may not reflect the opinions of the department. The information provided may not be applicable in all situations or under all circumstances. You are ultimately responsible for compliance with state and federal law. Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

Numbers 15 licensed, 6 pending. 100 complaints so far this year. Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

Senate Bill 6029 Request legislation from the Attorney General’s Office. Implemented by: • The Washington Student Achievement Council; • The Washington Attorney General’s Office; and • The Department of Financial Institutions. • Codified in chapter 31. 04 RCW and as to DFI, at chapter 208 -620 WAC. Rules effective 1/1/2019. Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

Senate Bill 6029 The Washington Student Achievement Council provides advocacy, takes complaints, refers complaints to the AGO and DFI The Washington Attorney General’s Office takes complaints, enforce certain provisions of the Act The Department of Financial Institutions provides funding for the ombuds, takes complaints, receives complaint, enforces the Act Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

3 Main Provisions in the Bill • Establishes an ombuds with the Washington Student Achievement Council • Gives authority to the AGO over specific modification activities • Gives authority to DFI for the servicing activities Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

Specifics "Student education loan" means any loan solely for personal use to finance postsecondary education and costs of attendance at an educational institution. A student education loan includes a loan made to refinance a student education loan. Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

Specifics "Student education loan borrower" means: (a) Any resident of [WA] who has received or agreed to pay a student education loan; or (b) any person who shares responsibility with such resident for repaying the student education loan. Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

Specifics "Student education loan servicer" does not include the following when engaged in the activity of collecting student education loans in default: (a) Collection agencies licensed in Washington under chapter 19. 16 RCW; and Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

Specifics Subject to the Act but exempt from Licensure: Trade, technical, vocational schools; Postsecondary schools that service their own loans; Persons servicing five or fewer loans Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

Specifics Guarantors of federal student loans that do not also service federal student loans; The U. S. , etc. , servicing loans it originated; Banks, etc. Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

Specifics Capital requirements for student education loan servicers: (1)(a) An applicant or licensee servicing student education loans must maintain a minimum tangible net worth of two hundred fifty thousand dollars. Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

Specifics Licensing through NMLS Annual assessment Examination Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

Specific Disclosure For a refinance of a federal student education loan, a clear and conspicuous disclosure that some repayment and forgiveness options available under federal student education loan programs, will no longer be available to the borrower if he or she chooses to refinance federal student education loans with one or more consumer loans. Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

Fees Authorized by the loan documents, by the act, or by the borrower; usual and customary or reasonable in light of the service provided for a default related service; not in excess of a fee you paid to a third party; and If not timely charged to the borrower’s account waived or returned to the borrower. Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

General Supervision Prohibited practices General requirements Borrower requests for information Acquiring, transferring, or selling rights Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

As to Federal Loans. . . I f you are [activity] in compliance with the department of education contractual requirements, you are not subject to the requirements of this section. Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

Thank you! Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”

Contact Us Cindy Fazio, Chief of Regulatory Affairs, Consumer Services lucinda. fazio@dfi. wa. gov 360 -902 -8800 Washington State Department of Financial Institutions “Regulating financial services to protect and educate the public and promote economic vitality. ”