Virginia Code 6.2-2602: Licensure of qualified education loan servicers; automatic issuance of license for federal student loan servicing contractors
A. A person seeking to act as a qualified education loan servicer is exempt from the application procedures described in subsections A and B of § 6.2-2603 upon determination by the Commissioner that the person (i) has an agreement with the U.S. Secretary of Education under 20 U.S.C. § 1078(b), solely to the extent of the person’s actions as a guarantor that engages in averting defaults, or (ii) is a party to a contract awarded by the U.S. Secretary of Education under 20 U.S.C. § 1087f. The Commissioner shall prescribe the procedure to document eligibility for this exemption.
Terms Used In Virginia Code 6.2-2602
- Commission: means the State Corporation Commission. See Virginia Code 6.2-100
- Commissioner: means the Commissioner of Financial Institutions. See Virginia Code 6.2-100
- Contract: A legal written agreement that becomes binding when signed.
- Guarantor: A party who agrees to be responsible for the payment of another party's debts should that party default. Source: OCC
- Injunction: An order of the court prohibiting (or compelling) the performance of a specific act to prevent irreparable damage or injury.
- loan servicer: means any person, wherever located, that:
1. See Virginia Code 6.2-2600
- Person: means any individual, corporation, partnership, association, cooperative, limited liability company, trust, joint venture, government, political subdivision, or other legal or commercial entity. See Virginia Code 6.2-100
- Qualified education loan: includes a loan made to refinance a qualified education loan. See Virginia Code 6.2-2600
- Servicing: means :
1. See Virginia Code 6.2-2600
B. With regard to a person exempted from the application procedures described in subsections A and B of § 6.2-2603 pursuant to subsection A, the Commissioner shall:
1. Automatically issue a license upon payment of the fee required by subsection C of § 6.2-2603 and the providing of the bond required by § 6.2-2604;
2. Automatically renew a license upon payment of the fees required by subsection E of § 6.2-2607; and
3. Deem the person to have met all the requirements set forth in subsections A and B of § 6.2-2603.
C. A person issued a license pursuant to subdivision B 1:
1. Is exempt from subsections A and B of § 6.2-2603; and
2. Shall comply with the record requirements in § 6.2-2608 except to the extent that the requirements are inconsistent with federal law.
D. A person issued a license pursuant to subdivision B 1 shall, within seven days after receiving notification of the expiration, revocation, or termination of (i) an agreement with the U.S. Secretary of Education under 20 U.S.C. § 1078(b) or (ii) any contract awarded by the U.S. Secretary of Education under 20 U.S.C. § 1087f, provide the Commissioner with written notice of such expiration, revocation, or termination. Notwithstanding any other provision of this chapter, such person’s license shall automatically expire 30 days after the expiration, revocation, or termination of such person’s contract. A person seeking to act as a qualified education loan servicer following the expiration of its license may apply for a new license by filing an application that meets the requirements of §§ 6.2-2603 and 6.2-2604 and subsection B of § 6.2-2605.
E. With respect to qualified education loan servicing not conducted pursuant to (i) an agreement with the U.S. Secretary of Education under 20 U.S.C. § 1078(b) or (ii) a contract awarded by the U.S. Secretary of Education under 20 U.S.C. § 1087f, nothing in this section prevents the Commission from issuing an order to temporarily or permanently prohibit or bar any person from acting as a qualified education loan servicer or violating applicable law.
F. In the case of qualified education loan servicing conducted pursuant to (i) an agreement with the U.S. Secretary of Education under 20 U.S.C. § 1078(b) or (ii) a contract awarded by the U.S. Secretary of Education under 20 U.S.C. § 1087f, nothing in this section shall prevent the Commission from issuing a cease and desist order or injunction against any qualified education loan servicer to cease activities in violation of this act.