Existing law authorizes the Commissioner of Financial Institutions to supervise and control various financial institutions, lenders and fiduciaries, including, without limitation, banks, credit unions, payday lenders and trust companies. (Chapter 604A of NRS, title 55 of NRS) Sections 2-51 of this bill add a new chapter to the Nevada Revised Statutes to provide for the licensing and regulation of student loan servicers by the Commissioner, as well as the regulation of private education loans and private education lenders. Sections 3-13 of this bill define terms used in the new chapter. Section 14 of this bill provides for money received pursuant to the new chapter to be accounted for separately and used for the regulation of student loan servicers. Sections 15-21, 25, 44 and 45 of this bill set forth requirements relating to the licensing of student loan servicers. In particular, section 15 prohibits a person from acting as a student loan servicer without obtaining a license from the Commissioner to do so, and also sets forth the persons exempted from this licensure requirement. Section 16 of this bill sets forth various requirements for applying for a license, including, without limitation, the payment of a license fee and an investigation fee and the submission of a surety bond. Section 45 provides that all fees paid are nonrefundable. Section 20 of this bill requires the Commissioner to issue a license to persons who engage in student loan servicing in this State only pursuant to certain contracts with the federal government without requiring those persons to comply with the standard requirements for the issuance of a license. Section 20: (1) requires persons who are issued such a license to comply with other relevant provisions of law; and (2) provides for the expiration of such a license not later than 37 days after the expiration, revocation or termination of the federal contract that provided the basis for the issuance of the license. Sections 20.1-20.8 of this bill authorize the Commissioner: (1) in furtherance of his or her duties with respect to the issuance and renewal of licenses as a student loan servicer, to participate in the Nationwide Multistate Licensing System and Registry; and (2) to take certain actions regarding such participation. Section 20.4: (1) requires the Commissioner to report to the Registry certain information concerning violations of applicable laws by applicants for licensure and licensees; and (2) authorizes the Commissioner to enter into certain agreements with certain entities. Section 20.2 authorizes the Commissioner to: (1) require an applicant for licensure or a licensee seeking to renew a license to submit a complete set of fingerprints when the Commissioner determines necessary; and (2) use the Registry to process and submit the fingerprints to the Federal Bureau of Investigation and certain other federal and state agencies for the purposes of conducting a criminal background check. Section 20.6 of this bill requires an applicant for the issuance of a license and certain other persons to submit a complete set of fingerprints and certain other information to the Registry. Section 20.8 authorizes the Commissioner to issue a license as a student loan servicer through the Registry. Section 21 provides for the annual expiration and renewal of a license as a student loan servicer. Sections 22-24 and 26-30 of this bill set forth requirements governing the business practices and other actions of student loan servicers. Specifically, section 22 sets forth requirements applicable to a licensee ceasing to engage in the business of student loan servicing in this State. Section 23 of this bill sets forth requirements applicable to a person who provides a check or other method of payment to the Commissioner which is returned or otherwise dishonored. Section 24 requires licensees and applicants for licenses to notify the Commissioner of any changes in certain information provided to the Commissioner. Sections 26 and 28 of this bill set forth requirements concerning business names, business locations and recordkeeping relating to student loan servicers and student education loans. Section 29 of this bill prohibits a student loan servicer from engaging in certain specified conduct. Section 30 of this bill authorizes the Student Loan Ombudsman in the Office of the State Treasurer or any member of the public to file a complaint with the Commissioner concerning the actions of a student loan servicer. Sections 31-37 of this bill establish provisions for a particular type of student education loan, the private education loan, and for private education loan borrowers and private education lenders. In particular, sections 31 and 32 of this bill establish certain protections for cosigners of private education loans. Section 32 also prohibits a private education lender from accelerating repayment of a private education loan except in cases of a default in payment. Section 33 of this bill establishes the rights and duties of private education lenders in cases of the total and permanent disability of a private education loan borrower or his or her cosigner. Sections 34-36 of this bill set forth requirements and prohibitions governing the business practices and other actions of private education lenders. Section 37 provides that a private education lender is not exempt from any applicable licensing requirements imposed by any other specific statute. Sections 38, 39 and 41-43 of this bill: (1) authorize the Commissioner to conduct investigations and examinations relating to student loan servicers and student education loans; (2) require the Commissioner to conduct such investigations and examinations at least annually; (3) require licensees to pay for such investigations and examinations; (4) authorize the Commissioner to retain certain professionals and specialists, enter into certain agreements and use certain resources for the purposes of investigations and examinations; (5) describe the scope of the authority of the Commissioner with regard to investigations and examinations; and (6) prohibit a student loan servicer or other person under examination or investigation from knowingly withholding or otherwise preventing access to information relating to the examination or investigation. Existing law requires financial institutions to pay assessments established by the Commissioner to cover: (1) the costs of certain independent audits and examinations; (2) legal services provided by the Attorney General to the Commissioner and the Division of Financial Institutions; and (3) supervision and examinations by the Commissioner or Division. (NRS 658.055, 658.098, 658.101) Sections 39 and 53 of this bill require a licensed student loan servicer to pay those assessments. Section 40 of this bill authorizes the Commission to monitor the market for the provision of student loan servicing and student education loans for risks to consumers and to take certain actions relating to such monitoring. Section 44 sets forth grounds upon which the Commissioner may deny an application for a license or suspend, revoke or refuse to renew a license. Section 46 of this bill requires a student loan servicer and a private education lender to comply with certain federal laws and regulations, and deems a violation of those federal laws or regulations to be a violation of Nevada law. Sections 47, 48 and 50 of this bill establish the rights, remedies and penalties available for violations of the new chapter. Sections 49 and 56 of this bill make confidential any books, records or other information obtained by the Division in connection with an application, complaint, audit, investigation or examination. Section 51 requires the Commissioner to adopt any regulations necessary to carry out the provisions of the new chapter. Section 52 of this bill makes a conforming change to indicate the proper placement of the new chapter in the Nevada Revised Statutes. Existing law establishes the duties of the Student Loan Ombudsman designated by the State Treasurer. Those duties include receiving, reviewing and attempting to resolve complaints from student loan borrowers. (NRS 226.570) Section 54 of this bill requires the Student Loan Ombudsman to make those complaints available to the Attorney General. Section 55 of this bill makes a conforming change to indicate the proper placement of section 54 in the Nevada Revised Statutes.

Statutes affected:
As Introduced: 657.005, 658.098, 226.500, 239.010, 394.570, 394.610
Reprint 1: 657.005, 658.098, 226.500, 239.010
As Enrolled: 657.005, 658.098, 226.500, 239.010
BDR: 657.005, 658.098, 226.500, 239.010, 394.570, 394.610