MA DOB Finalizes Student Loan Servicer License Regulations

The Massachusetts Division of Banks have filed and finalized two emergency regulations which implement the student loan servicer licensure provisions that were passed as Chapter 358 of the Acts of 2020. The regulations amended by the Act are 209 CMR 18.00: Conduct of the Business of Debt Collectors and Loan Servicers and 209 CMR 48.00: Licensee Record Keeping. Both regulations are effective as of July 1, 2021.

209 CMR 18.00: Conduct of the Business of Debt Collectors, Student Loan Servicers, and Third Party Loan Servicers

Chapter 358 sets forth several provisions relative to student loan servicing, including the creation of G.L. c. 93L, which requires the licensure of certain student loan servicers by the Division. The proposed amendments to 209 CMR 18.00 would expressly incorporate the new student loan servicer licenses into the current regulation setting forth the requirements for licensure, as well as providing standards for conduct and prohibited practices, among other provisions. The amendments add the particular application requirements and licensing standards for student loan servicers, as well as the requirements for licensure as an automatic federal student loan servicer. In addition, the amendments incorporate the student loan servicers and automatic federal student loan servicers into the applicable existing provisions governing the requirements for office locations, changes in ownership, and the filing of annual reports. 

The amendments also add student loan servicers and automatic federal student loan servicers into the existing provisions, identifying unfair servicing practices for loan servicers of all types, and also add a new section setting forth standards of conduct and unfair or deceptive acts or practices specifically by student loan servicers.

The amendments add a section regarding the confidentiality of examination and investigation records for the three license types (debt collectors, student loan servicers, and automatic federal student loan servicers) and one registrant (third party loan servicers) covered by the regulation, incorporating the language from the respective statutes. The title of the regulation has been changed to Conduct of the Business of Debt Collectors, Student Loan Servicers, and Third Party Loan Servicers.   

The amendments to 209 CMR 18.00 and a set of Frequently Asked Questions can be accessed HERE.

209 CMR 48.00: Licensee Record Keeping

The purpose of 209 CMR 48.00: Licensee Record Keeping is to establish procedures and requirements for record keeping by the Division’s licensees. In order to implement Chapter 358, the proposed amendments to 209 CMR 48.00 would expressly incorporate the new student loan servicer license into the regulation setting forth the record keeping requirements for all of the Division’s licensees. The amendments make the following changes: adding student loan servicers and automatic federal student loan servicers to the definition of “licensee” so that they are included within the requirements of the regulation; incorporating the specific record retention period for student loans servicers; and including the specific time period within which student loan servicers must respond to records requests from the Commissioner.

The amendments to 209 CMR 48.00 can be accessed HERE.

Additional information is available on the Division’s website at www.mass.gov/dob/.

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