APPROVED CHAPTER
JUNE 23, 2021 357
BY GOVERNOR PUBLIC LAW
STATE OF MAINE
_____
IN THE YEAR OF OUR LORD
TWO THOUSAND TWENTY-ONE
_____
S.P. 530 - L.D. 1645
An Act To Establish Protections for Private Student Loan Borrowers and a
Registry of Lenders
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 9-A MRSA Art. 15 is enacted to read:
ARTICLE 15
PRIVATE STUDENT LENDER REGISTRY
§15-101. Definitions
As used in this Article, unless the context indicates otherwise, the following terms have
the following meanings.
1. Provider of postsecondary education. "Provider of postsecondary education"
means a person engaged in the business of providing postsecondary education directly, by
correspondence or by the Internet to a person located in the State. "Provider of
postsecondary education" also includes a person not authorized to operate as and not
accredited as a postsecondary educational institution in the State.
2. Student financing. "Student financing" means an extension of credit or a debt or
obligation owned or incurred by a student, contractual or otherwise, that:
A. Is not made, insured or guaranteed under the federal Higher Education Act of 1965,
20 United States Code, Chapter 28, Subchapter IV; and
B. Is extended to or owned or incurred by a student expressly for postsecondary
education expenses regardless of whether the extension of credit or a debt or obligation
owned or incurred is provided by or owed to the provider of postsecondary education
that the student attends.
"Student financing" does not include a loan secured by real property or a dwelling.
3. Student financing company. "Student financing company" means a person
engaged in the business of making or extending credit to a student for postsecondary
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education expenses or a holder of debt or obligation owned or incurred by a student to
finance postsecondary education expenses. "Student financing company" does not include
a supervised financial organization; a financial institution holding company as defined in
Title 9‑B, section 1011, subsection 1; a mutual holding company as defined in Title 9‑B,
section 1052, subsection 2; a wholly owned subsidiary of a supervised financial
organization, financial institution holding company or mutual holding company; or the
Finance Authority of Maine. Only to the extent that state regulation is preempted by federal
law, "student financing company" does not include:
A. A federally chartered bank, savings bank, savings and loan association or credit
union;
B. A wholly owned subsidiary of a federally chartered bank or credit union; or
C. An operating subsidiary of a wholly owned subsidiary of a federally chartered bank
or credit union in which each owner of the operating subsidiary is wholly owned by
the same federally chartered bank or credit union.
4. Superintendent. "Superintendent" means the Superintendent of Consumer Credit
Protection within the Department of Professional and Financial Regulation.
§15-102. Private student lender registry
1. Private student lender registry. A person may not engage in the business of
student financing as a student financing company in the State unless the person:
A. Registers with the superintendent under rules or procedures adopted by the
superintendent, including the payment of a fee of not less than $500 annually; and
B. Provides the superintendent, at the time of registration under paragraph A and
annually after registration, with the following information for the previous year:
(1) A list of all providers of postsecondary education for which the person has
provided student financing to a student residing in the State;
(2) The number of student financing transactions made to students residing in the
State;
(3) The number of student financing transactions made for each provider of
postsecondary education listed in subparagraph (1);
(4) The default rate for a student obtaining student financing from the person; and
(5) A sample copy of the promissory note, agreement, contract or other instrument
used by the person to extend student financing.
2. Publicly accessible website. By November 15, 2022, the superintendent shall list
on a publicly accessible website the following information, which must be updated on at
least an annual basis:
A. The name, address, telephone number and website address for each student
financing company registered under this section;
B. A summary of the information required under subsection 1, paragraph B,
subparagraphs (1) to (4); and
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 C. A sample copy of each promissory note, agreement, contract or other instrument
provided to the superintendent pursuant to subsection 1, paragraph B, subparagraph
(5).
§15-103. Violations
1. Fine. The superintendent may impose a fine of up to $25,000 on a person for any
violation of this Article. Each violation of this Article or of any rule adopted pursuant to
section 15-104 is a separate offense for the purposes of this section.
2. Suspended from operating in State. If the superintendent finds that a person has
knowingly violated any provision of this Article and the violation caused financial harm to
a student, the superintendent may suspend the person from operating as or bar the person
from being a stockholder, officer, director, partner, owner or employee of a student
financing company for a period of up to 10 years.
3. Crime. A violation of this Article is a Class E crime.
4. Private right of action. A student financing company that fails to comply with this
Article is liable to any person or class of persons obligated on such student financing
contract for any of the following:
A. Actual damages or $500, whichever is greater;
B. An order enjoining the methods, acts or practices;
C. Restitution of property;
D. Punitive damages;
E. Attorney's fees; and
F. Any other relief that the court determines proper, including a declaration that the
contract between the person or class of persons and the student financing company is
void and unenforceable.
5. Remedies. Any violation of this Article is subject to the remedies provided in this
section in addition to remedies otherwise provided by law.
§15-104. Rules
The superintendent may adopt rules to carry out the purposes of this Article. Rules
adopted under this section are routine technical rules as defined in Title 5, chapter 375,
subchapter 2-A.
Sec. 2. 9-A MRSA Art. 16 is enacted to read:
ARTICLE 16
PRIVATE EDUCATION LENDING
§16-101. Definitions
As used in this Article, unless the context otherwise indicates, the following terms have
the following meanings.
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 1. Cosigner. "Cosigner" means an individual who is liable for the loan obligation of
another, regardless of how the individual is designated in the loan contract or instrument
with respect to that obligation, including an obligation under a private education loan
extended to consolidate a borrower's preexisting private education loan. "Cosigner"
includes an individual whose signature is requested as a condition to grant credit or forbear
a collection. "Cosigner" does not include a spouse of a borrower or cosigner whose
signature is needed solely to perfect the security interest in the loan.
2. Cosigner release. "Cosigner release" means the release of the obligations of a
cosigner on a private education loan.
3. Creditor. "Creditor" means:
A. The original creditor of a private education loan if ownership of the loan has not
been sold, assigned or transferred;
B. A person that owns a private education loan at the time the private education loan
is defaulted if the loan has not been subsequently sold, transferred or assigned,
regardless of whether the person is the original creditor; or
C. A person that purchases a defaulted private education loan for collection purposes,
regardless of whether the person collects on the loan itself, hires a 3rd party for
collection or hires an attorney for collection litigation.
4. Original creditor. "Original creditor" means the private education lender identified
in a promissory note, loan agreement or loan contract entered into with a private education
loan borrower or cosigner.
5. Private education lender. "Private education lender" or "lender" means any person
engaged in the business of securing, making or extending private education loans or any
holder of a private education loan. "Private education lender" does not include a supervised
financial organization; a financial institution holding company as defined in Title 9‑B,
section 1011, subsection 1; a mutual holding company as defined in Title 9‑B, section 1052,
subsection 2; a wholly owned subsidiary of a supervised financial organization, financial
institution holding company or mutual holding company; or the Finance Authority of
Maine. Only to the extent that state regulation is preempted by federal law, "private
education lender" does not include the following persons:
A. Any federally chartered bank, savings bank, savings and loan association or credit
union;
B. Any wholly owned subsidiary of a federally chartered bank or credit union; and
C. An operating subsidiary of a wholly owned subsidiary of a federally chartered bank
or credit union in which each owner of the operating subsidiary is wholly owned by
the same federally chartered bank or credit union.
6. Private education loan. "Private education loan" means an extension of credit that
is extended to a consumer expressly, in whole or in part, for postsecondary education
expenses, regardless of whether the loan is provided by the education institution that the
student attends, and that is not made, insured or guaranteed under the federal Higher
Education Act of 1965, 20 United States Code, Chapter 28, Subchapter IV. "Private
education loan" does not include:
A. An open-ended credit or any loan that is secured by real property or a dwelling; or
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 B. An extension of credit in which the covered education institution is the creditor if:
(1) The term of the extension of credit is 90 days or less; or
(2) An interest rate is not applied to the credit balance and the term of the extension
of credit is one year or less, regardless of whether the credit is payable in more than
4 installments.
7. Private education loan borrower. "Private education loan borrower" or
"borrower" means any resident of this State who has received or agreed to pay a private
education loan for the borrower's own education expenses.
8. Private education loan collector. "Private education loan collector" means a
person collecting or attempting to collect on a defaulted private education loan.
9. Private education loan collection action. "Private education loan collection
action" means any judicial action in which a claim is asserted to collect on a defaulted
private education loan.
10. Total and permanent disability. "Total and permanent disability" means the
condition of an individual who:
A. Has been determined by the United States Secretary of Veterans Affairs to be
unemployable due to a service-connected disability; or
B. Is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment that can be expected to result in death, has
lasted for a continuous period of not less than 12 months or can be expected to last for
a continuous period of not less than 12 months.
§16-102. License required
A person may not engage in the business of securing, making or extending a private
education loan or holding a private education loan without having first obtained a license
as a supervised lender from the administrator pursuant to section 2-301.
§16-103. Cosigned private education loan
1. Information prior to extension of loan. Prior to the extension of a private
education loan that requires a cosigner, a private education lender shall deliver the
following information to the cosigner:
A. How the private education loan will appear on the cosigner's credit report;
B. How the cosigner will be notified if the private education loan becomes delinquent,
and how the cosigner can cure a delinquency to avoid negative credit reporting and loss
of cosigner release eligibility; and
C. Eligibility criteria for cosigner release, including the number of on-time payments
and any other criteria required to approve the cosigner release.
2. Disclosure. Prior to offering a person a private education loan that is being used to
refinance an existing education loan, a private education lender shall provide the person a
disclosure that the benefits and protections applicable to the existing loan may be lost due
to the refinancing.
3. Form of and access to information and disclosure. A private education lender
shall provide the information disclosure required by subsections 1 and 2 on a one-page
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information sheet in 12-point type written in simple, clear, understandable and easily
readable language. A private education lender shall provide a cosigner with access to all
documents or records related to a cosigned private education loan that is available to the
borrower. If a private education lender provides electronic access to a document or record
to a borrower of a cosigned private education loan, the lender shall provide equivalent
access to the cosigner. Upon written request of the borrower or cosigner, the lender may
withhold individual contact information from the other party.
§16-104. Cosigner release
1. Annual written notice. A private education lender shall inform the borrower and
cosigner of all administrative, nonjudgmental required for cosigner release. A private
education lender shall provide the borrower and the cosigner of a cosigned private
education loan an annual written notice containing information about cosigner release,
including the criteria the lender requires to approve cosigner release and the process for
applying for cosigner release.
2. Written notification of eligibility for release. If the borrower of a cosigned private
education loan has met the applicable payment requirement to be eligible for cosigner
release and the borrower or cosigner has elected to receive electronic communications from
the lender, the lender shall send the borrower and the cosigner a written notification by mail
and, if the borrower or cosigner has elected to receive electronic communications from the
lender, by e-mail informing the borrower and cosigner that the payment requirement to be
eligible for cosigner release has been met. The notification must also include information
about any additional criteria to qualify for cosigner release and the procedure to apply for
cosigner release.
3. Incomplete cosigner release application. If an application by a borrower of a
cosigned private education loan for cosigner release is incomplete, the private education
lender shall provide written notice to the borrower that the application is incomplete. The
written notice must include a description of the information needed to consider the
application complete and the date by which the missing information must be received by
the lender.
4. Approval or denial of application for cosigner release. Within 30 days after a
borrower of a cosigned private education loan submits a completed application for cosigner
release, the private education lender shall send the borrower and cosigner a written notice
that informs the borrower and cosigner whether the cosigner release application has been
approved or denied. If the lender denies a request for cosigner release, the borrower may
request any documents or information used in the determination, including, but not limited
to, the credit score threshold used by the lender, the borrower's consumer report, the
borrower's credit score and any other documents specific to the borrower. The lender shall
also provide any adverse action notices required under applicable federal law if the denial
is based in whole or in part on any information contained in a consumer report.
5. Request for cosigner release. In response to a written or oral request for cosigner
release, a private education lender shall provide the requestor information detailing the
criteria to qualify for cosigner release and the procedure to apply for cosigner release.
6. Prohibition on restriction from cosigner release. A private education lender may
not impose any restriction that permanently bars a borrower of a cosigned private education
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loan from qualifying for cosigner release, including restricting the number of times the
borrower may apply for cosigner release.
7. Prohibition on negative consequences. A private education lender may not
impose any negative consequences on any borrower or cosigner of a cosigned private
education loan during the 60 days following the issuance of the notice under subsection 3
or until the lender makes a final determination about a borrower's cosigner release
application, whichever is earlier. For the purpose of this subsection, "negative
consequences" includes, but is not limited to, the imposition of additional cosigner release
eligibility criteria, negative credit reporting, lost eligibility for cosigner release, late fees,
interest capitalizatio