DFS Issues Final Regulations Regarding Student Loan Servicers
October 21st, 2019
The Department of Financial Services issued the final regulations, published in this week’s state register, which will regulate student loan servicers. The regulations, which take effect immediately, were issued after a 60-day comment period. Under the final regulation, applicable student loan servicers are required to:
- Be licensed by the Department of Financial Services;
- Provide clear and accurate information concerning fees, payments due and terms and conditions of loans;
- Apply over-payments in borrowers’ best interest;
- Provide accurate information to credit reporting agencies;
- Inform borrowers of income-based repayment and loan forgiveness options;
- Maintain and provide to consumers a detailed history of their account;
- When a borrower’s loan is transferred to a new servicer, ensure all necessary servicing information is transferred with the loan so the borrower’s repayment is not disrupted; and
- Provide timely and substantive responses to consumer complaints.
Department of Financial Services Superintendent Linda A. Lacewell said:
“While the federal government strips away consumer protections, New York continues to step up for students. Our new and final regulation will protect New York’s nearly 3 million student loan borrowers from predatory practices and demand clear information from student loan servicers to help borrowers make the best financial choices towards their future.”