In committee
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Virginia Senate
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Lead sponsor
Qualified education loan servicers; person must obtain license from State Corporation Commission.
Prohibits any person from acting as a qualified education loan servicer without first obtaining a license from the State Corporation Commission (SCC) and establishes procedures pertaining to such licenses. Banks, credit unions, certain wholly-owned subsidiaries of banks and credit unions, and nonprofit institutions of higher education are exempt from the licensing provisions. The servicing of a qualified education loan encompasses (i) receiving any scheduled periodic payments from a qualified education loan borrower pursuant to the terms of a qualified education loan; (ii) applying the payments of principal and interest and such other payments, with respect to the amounts received from a qualified education loan borrower, as may be required pursuant to the terms of a qualified education loan; and (iii) performing other administrative services with respect to a qualified education loan. Qualified education loan servicers are prohibited from, among other things, (a) misrepresenting the amount, nature, or terms of any fee or payment due or claimed to be due on a qualified education loan, the terms and conditions of the loan agreement, or the borrower's obligations under the loan; (b) knowingly misapplying or recklessly applying loan payments to the outstanding balance of a qualified education loan; and (c) failing to report both the favorable and unfavorable payment history of the borrower to a nationally recognized consumer credit bureau at least annually if the loan servicer regularly reports information to such a credit bureau. Violations are subject to a civil penalty not exceeding $2,500. The bill has a delayed effective date of January 1, 2019, but provides that applications shall be accepted, and investigations commenced, by the SCC beginning October 1, 2018.
