Oregon Statutes 725A.503 – Prohibition on servicing student loan without license; exceptions; powers of Director of Department of Consumer and Business Services; rules
(1) A person may not directly or indirectly service a student loan in this state unless the person obtains or renews a license under ORS § 725A.506.
Terms Used In Oregon Statutes 725A.503
- Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
- Person: includes individuals, corporations, associations, firms, partnerships, limited liability companies and joint stock companies. See Oregon Statutes 174.100
- public body: means state government bodies, local government bodies and special government bodies. See Oregon Statutes 174.109
- United States: includes territories, outlying possessions and the District of Columbia. See Oregon Statutes 174.100
- Violate: includes failure to comply. See Oregon Statutes 174.100
(2) Subsection (1) of this section does not apply to:
(a) A financial institution, as defined in ORS § 706.008.
(b) A financial holding company or bank holding company, both as defined in ORS § 706.008, if the financial holding company or bank holding company does no more than control an affiliate or subsidiary, as defined in 12 U.S.C. § 1841(d), and does not engage in business as a student loan servicer.
(c) An attorney who is licensed or otherwise authorized to practice law in this state if the attorney services a student loan only incidentally in the course of practicing law.
(d) A public body, as defined in ORS § 174.109.
(e) A public university listed in ORS § 352.002.
(f) A community college, as defined in ORS § 341.005.
(g) The Oregon Health and Science University.
(h) A nonprofit, private, post-secondary institution that the Higher Education Coordinating Commission has authorized to confer academic degrees under ORS § 348.594 to 348.615.
(i) A state agency or a private nonprofit institution or organization that has an agreement with the United States Secretary of Education under section 428(b) of the Higher Education Act of 1965 (20 U.S.C. § 1078(b)), solely to the extent of the agency’s, institution’s or organization’s actions as a guarantor that engages in averting defaults. The exemption set forth in this paragraph does not extend to the agency’s, institution’s or organization’s actions in servicing a student loan.
(j) A person that the Director of the Department of Consumer and Business Services designates by rule or order as exempt.
(3) Notwithstanding subsection (2) of this section, the director may require any person to obtain a license under ORS § 725A.506 before the person services a student loan in this state if the director determines that the person has violated state or federal law or has engaged in a course of dealing that is fraudulent, deceptive or dishonest.
(4)(a) If the director reasonably believes that a person is subject to ORS § 725A.500 to 725A.530 or is engaging in or is about to engage in an act or practice that constitutes servicing a student loan in this state without first obtaining a license as provided in subsection (1) of this section, the director may:
(A) Order the person to:
(i) Cease and desist from the act or practice; or
(ii) Affirmatively perform an act; or
(B) Apply to a circuit court of this state to enjoin the person from engaging in the act or practice.
(b) The director shall state in reasonable detail the facts on which the director bases an order under paragraph (a)(A) of this subsection.
(c) If a person that is subject to an order under paragraph (a)(A) of this subsection requests a hearing, the director shall schedule and give notice of a hearing in accordance with ORS Chapter 183. If the person does not request a hearing, the director’s order becomes final 30 days after the date of the order.
(5) The director may waive or modify a requirement set forth in this section if the director determines that a person’s compliance with the requirement would cause the person to violate federal law. [2021 c.651 § 2]
(Licensing and Duties of Licensee)