Kentucky Statutes 286.12-110 – Order to condition, deny, suspend, or revoke license
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(1) Subject to subsection (2) of this section, the commissioner may issue a written order to condition, deny, suspend, or revoke a license issued under this subtitle if the commissioner finds that one (1) or more of the following has occurred:
(a) The licensee:
1. No longer meets the requirements to hold a license under this subtitle;
2. Materially violated any provision of this subtitle, any administrative regulation or order issued pursuant to this subtitle, or any other state law or regulation related to the business of student education loan servicing;
3. Is conducting its business in an unsafe or unsound manner;
4. Engaged in an unfair or deceptive act or practice;
5. Is insolvent;
6. Has suspended payment of its obligations or has made an assignment for the benefit of its creditors;
7. Has applied for an adjudication of bankruptcy, reorganization, arrangement, or other relief under the United States Bankruptcy Code,
11 U.S.C. secs. 101 to 110;
8. Has failed to cooperate in an examination, investigation, or subpoena issued by the commissioner;
9. Has failed to make any report required by this subtitle; or
10. Has been convicted of:
a. To the extent permitted under KRS § 335B.020, a felony; or b. A misdemeanor:
i. Related to the business of student education loan servicing;
or
ii. Involving theft, fraud, or breach of trust;
(b) Any fact or condition exists that would have been grounds for denying the application if it had existed at the time the licensee applied for its license; or
(c) The licensee’s net worth, as determined in accordance with generally accepted accounting principles, falls below the required net worth as prescribed in KRS
286.12-030(2)(b), and the licensee, after ten (10) days written notice from the commissioner, fails to take any action the commissioner deems necessary to remedy the deficiency.
(2) (a) The commissioner shall provide written notice to the licensee prior to denying, suspending, or revoking a license under subsection (1) of this section.
(b) A licensee that receives a notice of the commissioner’s intent to deny, revoke, or suspend a license may file a written application for an administrative hearing in accordance with KRS Chapter 13B within twenty (20) days of the date of the notice.
(c) If a licensee fails to timely request a hearing pursuant to paragraph (b) of this
subsection, the commissioner may enter a default order of denial, revocation, or suspension against the licensee.
(3) (a) Any person who has had a license revoked by the commissioner under this section shall not be eligible for a license under KRS § 286.12-030 until three (3) years after the date of revocation.
(b) Any person who has a license revoked twice by the commissioner under this section shall be permanently ineligible for a license under this subtitle.
(4) In determining whether a licensee is engaging in an unsafe or unsound practice under subsection (1)(a)3. of this section, the commissioner may consider:
(a) The size and condition of the licensee; (b) The magnitude of the loss;
(c) The gravity of the violation of this subtitle or an administrative regulation or order issued pursuant to this subtitle;
(d) Any action taken against the licensee by another state or federal government;
and
(e) The previous conduct of the licensee.
Effective: July 14, 2022
History: Created 2022 Ky. Acts ch. 88, sec. 13, effective July 14, 2022.
(a) The licensee:
Terms Used In Kentucky Statutes 286.12-110
- Action: includes all proceedings in any court of this state. See Kentucky Statutes 446.010
- any other state: includes any state, territory, outlying possession, the District of Columbia, and any foreign government or country. See Kentucky Statutes 446.010
- Bankruptcy: Refers to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court in getting a fresh start. Under the protection of the bankruptcy court, debtors may discharge their debts, perhaps by paying a portion of each debt. Bankruptcy judges preside over these proceedings.
- Commissioner: means the commissioner of the Department of Financial
Institutions. See Kentucky Statutes 286.1-010 - Federal: refers to the United States. See Kentucky Statutes 446.010
- Fraud: Intentional deception resulting in injury to another.
- Licensee: means a person licensed as a student education loan servicer under this subtitle. See Kentucky Statutes 286.12-010
- Person: means a natural person, or any type or form of corporation, company, partnership, proprietorship, association, or other legal entity. See Kentucky Statutes 286.1-010
- servicing: means participating in any of the following activities related to a student education loan:
(a) Performing both of the following:
1. See Kentucky Statutes 286.12-010 - State: when applied to a part of the United States, includes territories, outlying possessions, and the District of Columbia. See Kentucky Statutes 446.010
- Student education loan: means any loan to a borrower to finance postsecondary education or expenses related to postsecondary education. See Kentucky Statutes 286.12-010
- Subpoena: A command to a witness to appear and give testimony.
1. No longer meets the requirements to hold a license under this subtitle;
2. Materially violated any provision of this subtitle, any administrative regulation or order issued pursuant to this subtitle, or any other state law or regulation related to the business of student education loan servicing;
3. Is conducting its business in an unsafe or unsound manner;
4. Engaged in an unfair or deceptive act or practice;
5. Is insolvent;
6. Has suspended payment of its obligations or has made an assignment for the benefit of its creditors;
7. Has applied for an adjudication of bankruptcy, reorganization, arrangement, or other relief under the United States Bankruptcy Code,
11 U.S.C. secs. 101 to 110;
8. Has failed to cooperate in an examination, investigation, or subpoena issued by the commissioner;
9. Has failed to make any report required by this subtitle; or
10. Has been convicted of:
a. To the extent permitted under KRS § 335B.020, a felony; or b. A misdemeanor:
i. Related to the business of student education loan servicing;
or
ii. Involving theft, fraud, or breach of trust;
(b) Any fact or condition exists that would have been grounds for denying the application if it had existed at the time the licensee applied for its license; or
(c) The licensee’s net worth, as determined in accordance with generally accepted accounting principles, falls below the required net worth as prescribed in KRS
286.12-030(2)(b), and the licensee, after ten (10) days written notice from the commissioner, fails to take any action the commissioner deems necessary to remedy the deficiency.
(2) (a) The commissioner shall provide written notice to the licensee prior to denying, suspending, or revoking a license under subsection (1) of this section.
(b) A licensee that receives a notice of the commissioner’s intent to deny, revoke, or suspend a license may file a written application for an administrative hearing in accordance with KRS Chapter 13B within twenty (20) days of the date of the notice.
(c) If a licensee fails to timely request a hearing pursuant to paragraph (b) of this
subsection, the commissioner may enter a default order of denial, revocation, or suspension against the licensee.
(3) (a) Any person who has had a license revoked by the commissioner under this section shall not be eligible for a license under KRS § 286.12-030 until three (3) years after the date of revocation.
(b) Any person who has a license revoked twice by the commissioner under this section shall be permanently ineligible for a license under this subtitle.
(4) In determining whether a licensee is engaging in an unsafe or unsound practice under subsection (1)(a)3. of this section, the commissioner may consider:
(a) The size and condition of the licensee; (b) The magnitude of the loss;
(c) The gravity of the violation of this subtitle or an administrative regulation or order issued pursuant to this subtitle;
(d) Any action taken against the licensee by another state or federal government;
and
(e) The previous conduct of the licensee.
Effective: July 14, 2022
History: Created 2022 Ky. Acts ch. 88, sec. 13, effective July 14, 2022.