(a)  Each person or entity who or that services any student education loan issued to a student loan borrower after July 1, 2019, shall register with the department as a student loan servicer no later than September 30, 2019, or within thirty (30) days of conducting servicing of student education loans, whichever is earlier.

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Terms Used In Rhode Island General Laws 19-33-4

  • 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.
  • Conviction: A judgement of guilt against a criminal defendant.
  • Department: means the department of business regulation, division of banking. See Rhode Island General Laws 19-33-2
  • Director: means the director of the department of business regulation or designee. See Rhode Island General Laws 19-33-2
  • Garnishment: Generally, garnishment is a court proceeding in which a creditor asks a court to order a third party who owes money to the debtor or otherwise holds assets belonging to the debtor to turn over to the creditor any of the debtor
  • Indictment: The formal charge issued by a grand jury stating that there is enough evidence that the defendant committed the crime to justify having a trial; it is used primarily for felonies.
  • person: may be construed to extend to and include co-partnerships and bodies corporate and politic. See Rhode Island General Laws 43-3-6
  • Service of process: The service of writs or summonses to the appropriate party.
  • servicing: means :

    (i)(A)  Receiving any scheduled periodic payments from a student loan borrower or notification of such payments; and

    (B)  Applying payments to the student loan borrower's account pursuant to the terms of the student education loan or of the contract governing the servicing;

    (ii)  During a period when no payment is required on a student education loan, maintaining account records for the loan; and

    (iii)  Communicating with the student loan borrower regarding the loan, on behalf of the loan's holder; or

    (iv)  Interactions with a student loan borrower, including activities to help prevent default on obligations arising from student education loans, conducted to facilitate the activities described in this section. See Rhode Island General Laws 19-33-2

  • Student education loan: means any loan made to a student loan borrower primarily for personal use to finance postsecondary education or other school-related expenses, and does not include an extension of credit under an open-end consumer credit plan, a reverse mortgage transaction, a residential mortgage transaction, or any other loan that is secured by real property or a dwelling. See Rhode Island General Laws 19-33-2
  • Student loan borrower: means :

    (i)  Any resident of this state who has received or agreed to pay a postsecondary student education loan; or

    (ii)  Any person who shares responsibility, as a guarantor or by other legal obligation, with such resident for repaying the postsecondary student education loan for another. See Rhode Island General Laws 19-33-2

  • Student loan servicer: means any person or entity who or that engages in student loan servicing as defined in this chapter. See Rhode Island General Laws 19-33-2

(b)  The registration provisions of this chapter shall not apply to:

(1)  Any person or entity who or that services fewer than six (6) student education loans in this state during any consecutive twelve-month (12) period; and

(2)  Any person or entity that services loans for education other than postsecondary education.

(c)  As part of that registration, the person or entity shall:

(1)  Complete a registration in the form promulgated by the department providing the information requested by the application;

(2)  Pay an annual registration fee of one thousand dollars ($1,000);

(3)  Provide a bond in which the registrant shall be the obligor and which shall run to the state for the use of the state and of the person who may have a cause of action against the obligor of the bond under the provisions of this chapter. The bond shall be perpetual and shall be conditioned upon the obligor conforming to the provisions of this chapter and all regulations thereunder and the obligor will pay to the state and to any person all money that may become due or owing to the state or to the person from the obligor under the provisions of this chapter. The bond shall provide for notice directly to the department in the manner specified by the department if the bond is canceled by the surety for any reason. The bond shall be in the sum of fifty thousand dollars ($50,000);

(4)  Appoint, and thereafter maintain, a resident agent in this state with authority to accept service of process for the registrant in this state, including the process of garnishment:

(i)  Service of process upon the agent shall be deemed sufficient service upon the registrant; and

(ii)  Any process, including the process of garnishment, may be served upon the director, as agent of the registrant, in the event that no resident agent can be found upon whom service can be made, or the registrant has failed to designate a resident agent as required.

(d)  No registration shall be transferable or assignable. A change in ownership of less than twenty-five percent (25%) of the voting stock or equity interests of a registrant shall not be considered a transfer or assignment of the registration. A change in ownership of twenty-five percent (25%) or more of the voting stock or equity interests shall require notification to the department, and registration by the transferee/assignee within fifteen (15) days of the change in ownership. A change in name shall require notification to the department within fifteen (15) days.

(e)  Any registrant shall, within twenty-four (24) hours after actual knowledge, notify the department of the occurrence of any of the following events:

(1)  The institution of bankruptcy, receivership, reorganization, or insolvency proceedings regarding a registrant;

(2)  The institution of any adverse government action against a registrant; or

(3)  Any felony indictment or conviction of any registrant or any officers, directors, owners, employees, members, or partners thereof.

(f)  Student loan servicers shall designate and provide contact information for an individual to represent the student loan servicer in communications with the department. This information shall be updated within ten (10) days of any change thereto.

(g)  Registration shall be valid for one calendar year, and student loan servicers shall be required to renew their registration with the department annually.

(h)  The department may assess a fine of ten thousand dollars ($10,000) on any student loan servicer that services student education loans for thirty (30) or more days without registering and complying with the conditions provided in this section.

(i)  The department may share any information gathered through its registration or examination of student loan servicers with the attorney general.

History of Section.
P.L. 2019, ch. 199, § 1; P.L. 2019, ch. 265, § 1.