Current through 2024-38, September 18, 2024
A.
License
needed. Student loan servicers must obtain a license to operate in Maine
or to service Maine residents' student loans. If a servicer has more than one
physical location from which it services Maine residents' loans, each location
must have a separate license. A license is not transferable or assignable. A
change in control must be submitted to the Bureau for prior approval.
B.
Application
Contents. Each applicant for a license or license renewal shall provide
the following information to NMLS or on such forms as the Superintendent
requires.
1. The applicant's full legal name,
address, telephone number, website, federal Tax Identification Number or Social
Security Number, as applicable.
2.
All locations where loan records are stored.
3. All locations from which business with
Maine residents will be transacted.
4. All assumed or trade names under which
business will be transacted.
5. The
name, title, address, telephone number, and email address of the individual to
contact if the Bureau receives a complaint regarding the activities of the
applicant.
6. The name, title,
address, telephone number, and email address of the individual to contact for
the scheduling of routine compliance examinations.
7. For foreign applicants required to
register with the State of Maine prior to commencing business:
a. The date and state of incorporation or
founding;
b. A certificate of good
standing from the state of incorporation or founding;
c. A complete description of the applicant's
structure, including parents and subsidiaries, and identification of whether
any parent or subsidiary is publicly traded on a stock exchange;
d. A certified copy of the applicant's
authority to do business in Maine, including every assumed or fictitious
name;
e. The name and address of
the designated agent on whom service of process may be made in Maine;
and
f. The name and address of
every controlling person.
8. A copy of the applicant's most recent
audited financial statement and, if available, audited financial statements for
the immediately preceding two-year period.
9. Every name, business address, residential
address, and employment position for the last 10 years of each owner, partner,
member, executive officer, director, manager of the location to be licensed,
and controlling person. For individuals, provide a date of birth.
10. Whether any owner, partner, member,
executive officer, director, manager who will be in charge of the location to
be licensed, or controlling person has been involved in material litigation
and/or convicted of a crime in the ten (10) year period immediately prior to
the application. If so, for each such instance, provide the title of the
action; jurisdiction; date of disposition; a detailed explanation of the
person's involvement; and a copy of the disposition, e.g., the
settlement document, decision, or judgment.
11. A management chart displaying the
applicant's directors, members, executive officers, and managers by name,
title, and duties and identifying compliance reporting and internal audit
structure.
13. A Chart showing (or
a description which includes) the percentage of ownership of:
a. Direct owners (total direct ownership
percentage must equate to 100%);
b.
Indirect owners;
c. Subsidiaries;
and
d. Affiliates of the
applicant/licensee
14.
Sufficient evidence from which the Superintendent can conclude that the
following persons are in all respects properly qualified and of good character:
a. If the applicant is an individual, that
individual;
b. If the applicant is
a partnership, each partner;
c. If
the applicant is a limited liability company or association, each
member;
d. If the applicant is a
corporation, the president, the chair of the executive committee, the senior
executive responsible for finance, the senior executive responsible for
operations, each director, each trustee, and each shareholder owning 10% or
more of any class of securities of the corporation.
15. A consumer report for each owner,
partner, member, director, executive officer, controlling person, and manager
of the location to be licensed.
16.
Whether the applicant, any predecessor of the applicant, or controlling person
has ever been denied a license in another jurisdiction; had a license revoked,
been the subject of an administrative proceeding relating to the business for
which it seeks to be licensed; or been convicted of a crime related to the
business of money transmission, supervised lending, forgery, theft or false
representation. If so, for each such instance, provide the title of the action;
jurisdiction; date of disposition; a detailed explanation of the applicant's
involvement; and a copy of the disposition,
e.g., the settlement document, decision, or
judgment.
17. A copy of the
applicant's quality control program.
C.
Automatic licensure of persons
servicing student loans under contract with the United States Department of
Education. In addition to the information listed in section IV(A) above,
each applicant seeking automatic licensure pursuant to
9-A
M.R.S. §
14-107(9)
shall submit either to NMLS or to the Superintendent on required forms:
1. A copy of the applicant's original signed
contract with the United States Department of Education; and
2. For every licensed location, a copy of the
applicant's most recent contract extension with the United States Department of
Education. A licensee may not act within this State as a student loan servicer
under any name or at any place of business other than those named in the
license(s) issued by the Bureau. Any change of location of a place of business
of a licensee requires prior written notice to the Superintendent.
D.
Student Loan
Ombudsman. The Superintendent hereby establishes the position of student
loan ombudsman within the Bureau to provide timely assistance to student loan
borrowers. The student loan ombudsman shall be responsible, in consultation
with the Superintendent, for carrying out the duties of that position set forth
in 9-A M.R.S. Article 14, including licensing and examining student loan
servicers and lenders.
E.
Records Retention and Accessibility.
A student loan servicer shall maintain adequate records of
each student education loan transaction, including and all communications with
a borrower, for not less than two years following the final payment on the
student education loan or the assignment of the student education loan,
whichever occurs first, or except as otherwise required by federal law, a
federal student loan education agreement, or a contract between the Federal
Government and a licensee under 9-A M.R.S. Article 14. When requested by the
Superintendent, a student loan servicer shall make such records available or
shall send such records to the Superintendent electronically or by registered
or certified mail, return receipt requested, or by any express delivery carrier
that provides a dated delivery receipt, not later than five business days after
requested by the Superintendent to do so. The Superintendent may grant a
licensee additional time to make such records available or to send the records
to the Superintendent.
F.
Loan Agreement and Contract Requirements. Except as otherwise
provided in federal law, a federal student education loan agreement, or a
contract between the Federal Government and a student loan servicer, a student
loan servicer shall comply with the requirements of this subsection.
1. Upon receipt of a written inquiry from a
student loan borrower or the representative of a student loan borrower, a
student loan servicer shall respond by:
a.
Acknowledging receipt of the written inquiry within 10 days; and
b. Within 30 days after receiving the
inquiry, provide a narrative response to the inquiry including either a
detailed description of the action the student loan servicer will take to
correct the student loan borrower's account or an explanation of the student
loan servicer's position that the borrower's account is correct.
2. A student loan servicer must
ask student loan borrowers how to apply an overpayment or prepayment to a
student loan. A student loan borrower's direction on how to apply an
overpayment or prepayment to a student loan must stay in effect for any future
overpayments or prepayments during the term of a student loan until the
borrower provides different directions. For purposes of this paragraph,
"overpayment" or "prepayment" means a payment on a student loan in excess of
the monthly amount due from a borrow on a student loan.
3. A student loan servicer shall apply a
partial payment or underpayment in a manner that minimizes late fees and
negative credit reporting. When loans on a student loan borrower's account have
an equal stage of delinquency, a student loan servicer shall apply a partial
payment or underpayment to satisfy as many individual loan payments as possible
on a borrower's account. For purposes of this paragraph, "partial payment" or
"underpayment" means a payment on a student loan account that contains multiple
individual loans in an amount less than the amount necessary to satisfy the
outstanding payment due on all loans in the student loan account.
4. In the event of the sale, assignment or
other transfer of the servicing of a student education loan that results in a
change in the identity of the person to whom a student loan borrower is
required to send payments or direct any communication concerning the student
education loan, as a condition of the sale, assignment or transfer, the student
loan servicer shall:
a. Require the new
student loan servicer to honor all benefits originally represented as available
to the student loan borrower during the repayment of the student education loan
and preserve the availability of such benefits, including any benefits for
which the student loan borrower has not yet qualified;
b. Within 45 days after the sale, assignment
or transfer, transfer to the new student loan servicer all information
regarding the student loan borrower, the account of the student loan borrower
and the student education loan of the student loan borrower, including the
repayment status of the student loan borrower and any benefits associated with
the student education loan of the student loan borrower; and
c. Complete the sale, assignment or transfer
of the servicing of the student education loan at least seven days before the
next payment on the loan is due.
5. A student loan servicer that obtains the
right to service a student education loan shall adopt policies and procedures
to verify that the student loan servicer has received all information regarding
the student loan borrower, the account of the student loan borrower and the
student education loan of the student loan borrower, including, but not limited
to, the repayment status of the student loan borrower and any benefits
associated with the student education loan of the student loan
borrower.
6. A student loan
servicer shall evaluate a student loan borrower for a repayment program based
on income prior to placing the borrower in forbearance or default, if a
repayment program based on income is available to the borrower.
G.
Administrative authority
granted to NMLS. To effectuate student loan servicer licensing in NMLS,
NMLS is authorized to collect fees and remit those fees to the Bureau, collect
fees for its processing costs, process and maintain license records, and
require use of NMLS uniform electronic and paper forms.
H.
State of Maine New and Renewal
Applications.
After the effective date of this rule, application for a new
license must be filed through NMLS. An applicant must pay the NMLS processing
fee directly to NMLS. New licenses issued November 1 or later each year shall
be valid through December 31 of the following year. Licenses issued before
November 1 will expire on December 31 of the same year. State of Maine new and
renewal license application fees assessed to each new application for a main or
branch office are as follows:
1.
Application and renewal fees: $1,000.00;
2. Investigation fee: $800.00.
I.
New licenses and renewal
licenses issued following completion of the transition to NMLS.
New licenses and renewal licenses issued after the effective
date of this rule shall be processed pursuant to the procedures established by
NMLS. New licenses and renewal licenses shall be valid for the time periods
established by NMLS. Application, renewal, and processing fees will be paid
directly to NMLS. Renewal applications received after December 31 of any year
will be considered late. The status of such licenses will be changed to
"terminated," failed to renew," or an equivalent status. Such licenses may be
reinstated if a renewal application is received no later than the last day of
February, together with all renewal fees and a late fee of $100.00. Beginning
March 1, renewal requests will not be processed, and applicants must apply for
a new license.
J.
Changes to existing licensing information. If any information
reported by a licensee changes during a period of licensure, the licensee must
amend its information on file with NMLS within 10 days of the occurrence of the
change or such shorter period as required by NMLS rules or procedures. Notice
of a change of control of the licensee must be provided to the Bureau in
advance of notice on NMLS, and the Bureau must approve any change of control
before the same becomes effective. Any change of control of a licensee which
occurs without approval or which the Bureau rejects will constitute cause for
revocation of licensure.
K.
License suspension and revocation; refusal to renew.
The Superintendent may suspend, revoke, or refuse to renew a
license issued pursuant to this section or take any other action in accordance
with 9-A M.R.S. Article 6 if the Superintendent finds one of the
following:
1. The licensee has
violated any provision of 9-A M.R.S. Article 14 or any rule or order adopted
pursuant to Article 14;
2. Any fact
or condition exists that, if it had existed at the time of the original
application for the license, would have warranted a denial of the license;
or
3. If any state or federal
regulatory agency has brought a licensing action, civil enforcement action, or
criminal action against the licensee or applicant and the Superintendent finds
that action by the Bureau is in the public interest.
L.
Assistance and report by an exempt
person.
If the student loan ombudsman requests that an exempt person
assist in resolving a complaint pursuant to
9-A
M.R.S. §14-106, the exempt person
shall:
1. Within 10 days of receiving
the ombudsman's request, formally acknowledge its receipt; and
2. Within 30 days of receiving the request,
either:
a. Provide information requested and
necessary to investigate and resolve the complaint, with an explanation of
steps taken by the exempt person to resolve the complaint; or
b. If the exempt person resolves the
complaint on its own, provide the ombudsman with all documentation regarding
the resolution.
On or before January 31 of every year, an exempt person that
has been involved in the resolution of a complaint during the previous calendar
year shall report to the ombudsman the number of complaints received and the
number of complaints resolved by the exempt person in the preceding calendar
year.
M.
Routine technical rule. This
is a routine technical rule authorized by
9-A
M.R.S. §§6-105 -A(1) and
14-109(H).
