Current through Register Vol. 46, No. 12, March 20, 2024
(a) Definition of Control.
(1) As used in this part the term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a student loan servicer,
whether through the ownership of voting stock of such student loan servicer,
the ownership of voting stock of any person which possesses such power, or
otherwise.
(2) Control shall be
presumed to exist if any person, directly or indirectly, owns, controls, or
holds with power to vote ten percent or more of the voting stock of any student
loan servicer or of any person which, directly or indirectly, owns, controls,
or holds with power to vote ten percent or more of the voting stock of any
student loan servicer, but no person shall be deemed to control a student loan
servicer solely by reason of being an officer or director of such student loan
servicer. Such presumption may not be rebutted except by a determination of the
superintendent on an application under subdivision (g) of this section.
(3) As used in this section the
term "person" means individual, partnership, firm, association, corporation,
joint-stock company, trust, any similar entity or any combination of the
foregoing acting in concert.
(4) As
used in this part the term "substantial stockholder" means a person owning or
controlling directly or indirectly ten percent or more of the total outstanding
stock of a corporation.
(b) Prior Approval Required.
(1) Any action which results in a change of
control of the business of a student loan servicer shall be void unless the
superintendent has given prior approval of the act before it is
taken.
(2) Prior to taking any
action which results in any change of control of a student loan servicer, the
person desiring to acquire control shall make a proposed amendment through NMLS
consistent with the checklist and instructions for making such an amendment
posted in NMLS and pay an investigation fee as prescribed pursuant to section
eighteen-a of the banking law. After receiving the proposed amendment, the
superintendent may require the person desiring to acquire control to submit any
other information she determines necessary as a supplement thereto.
(c) Without limiting the
responsibilities of persons seeking to acquire control of a student loan
servicer to make application to the superintendent pursuant to section
715 of the banking
law and this section, every student loan servicer shall report to the
superintendent within five days of the date the student loan servicer becomes
aware of such information, the name and residence of each person (or each
member of a group of persons acting in concert) who becomes an owner of ten
percent or more of the outstanding shares of any voting class of the student
loan servicer and shall inform such person of the reporting requirements under
this part.
(d) Application for a
determination of control.
(1) The
superintendent may in her discretion, upon the application of a student loan
servicer or any person who, directly or indirectly, owns, controls, or holds
with power to vote or seeks to own, control or hold with power to vote any
voting stock of such student loan servicer, determine whether or not the
ownership, control, or holding of such voting stock constitutes or would
constitute control of such student loan servicer for purposes of this
section.
(2) Such an application
shall be in the form of a letter, containing a sworn statement under penalty of
perjury by the person making the application that the contents of the letter
are true, that sets forth all the information necessary for the superintendent
to make the determination. Such information must at a minimum include:
(i) name and address of the person seeking a
determination;
(ii) a detailed
narrative description of the manner in which the person owns, controls, or
holds, or seeks to own, control, or hold, voting stock of a student loan
servicer;
(iii) the number of
shares of each class of stock of the licensee and the amount (if any) of
obligations of the licensee of which the person seeking a determination owns or
intends to be beneficial owner;
(iv) an organizational chart showing the
structure or the proposed structure of the ownership of the student loan
servicer now or immediately after the proposed transaction to which the
application relates, including anyone who controls the person seeking the
determination; and
(v) any other
information required by the superintendent as deemed necessary under the
circumstances of the particular application.
(3) The superintendent may require the person
making the application to supplement the information contained in the
application as she, in her sole discretion, deems necessary to render a
decision.
(e)
Applications for prior approval under this section shall be approved or
disapproved in accordance with the provisions of section
713 of the banking
law and section 409.3 of this part.
(f) This section shall not apply to an exempt
organization.
