§ 36a-850 — Prohibited activities of student loan servicers and control persons.

Connecticut § 36a-850

• Jurisdiction: Connecticut
• Title 36a: The Banking Law of Connecticut
• Ch. 669: Regulated Activities

Text

No student loan servicer and no control person of a student loan servicer shall, directly or indirectly: (1) Employ any scheme, device or artifice to defraud or mislead student loan borrowers; (2) Engage in any unfair or deceptive practice toward any person or misrepresent or omit any material information in connection with the servicing of a student education loan, including, but not limited to, misrepresenting the amount, nature or terms of any fee or payment due or claimed to be due on a student education loan, the terms and conditions of the loan agreement or the borrower's obligations under the loan; (3) Obtain property by fraud or misrepresentation; (4) Knowingly misapply or recklessly apply student education loan payments to the outstanding balance of a student education loan; (5) Knowingly or recklessly provide inaccurate information to a credit bureau, thereby harming a student loan borrower's creditworthiness; (6) Fail to report both the favorable and unfavorable payment history of the student loan borrower to a nationally recognized consumer credit bureau at least annually if the student loan servicer regularly reports information to a credit bureau; (7) Refuse to communicate with an authorized representative of the student loan borrower who provides a written authorization signed by the student loan borrower, provided the student loan servicer may adopt procedures reasonably related to verifying that the representative is in fact authorized to act on behalf of the student loan borrower; (8) Negligently make any false statement or knowingly and wilfully make any omission of a material fact in connection with any information or reports filed with a governmental agency or in connection with any investigation conducted by the commissioner or another governmental agency; or (9) Unless otherwise required pursuant to federal law, a federal student loan agreement or by a contract between a federal student loan servicer and the United States Department of Education, fail to establish, enforce and maintain policies and procedures for supervising employees, agents and office operations that are reasonably designed to achieve compliance with applicable student loan servicing laws and regulations or fail to comply with the service standards set by the commissioner in accordance with section 59 of public act 16-65*; or (10) Engage in an abusive act or practice, as described in Section 1031 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203, as amended from time to time, when servicing a student education loan. *Note: Section 59 of public act 16-65 is special in nature and therefore has not been codified but remains in full force and effect according to its terms.

Legislative History

(P.A. 15-162, S. 6; P.A. 16-65, S. 62; P.A. 17-233, S. 33; P.A. 18-173, S. 87; P.A. 21-130, S. 7; 21-190, S. 2.) History: P.A. 15-162 effective July 1, 2016; P.A. 16-65 added “licensee” re student loan servicer, effective July 1, 2016; P.A. 17-233 replaced “No student loan servicer licensee shall” with “No person who is required to be licensed and who is subject to the provisions of sections 36a-846 to 36a-854, inclusive, and no control person shall, directly or indirectly”, amended Subdiv. (1) by deleting “Directly or indirectly”, amended Subdiv. (8) by replacing “Banking Commissioner” with “commissioner”, added Subdiv. (9) re the failure to establish, enforce and maintain policies and procedures, and made technical changes; P.A. 18-173 added Subdiv. (10) re failure to comply with standards set by commissioner and made a technical change; P.A. 21-130 replaced “person who is required to be licensed and who is subject to the provisions of sections 36a-846 to 36a-854, inclusive,” with “student loan servicer”, added “of a student loan servicer” re control persons, deleted “licensee” in Subdivs. (6) and (7), added “Unless otherwise required pursuant to federal law, a federal student loan agreement or by a contract between a federal student loan servicer and the United States Department of Education” in Subdiv. (9), redesignated former Subdiv. (10) re failure to comply with service standards set by commissioner as Subdiv. (9), and made technical changes, effective July 1, 2021; P.A. 21-190 amended Subdiv. (9) by adding “Unless otherwise required pursuant to federal law, a federal student loan agreement or by a contract between a federal student loan servicer and the United States Department of Education” and the provisions of former Subdiv. (10) re failure to comply with the service standards set by the commissioner, deleted former Subdiv. (10) and added new Subdiv. (10) re engagement in an abusive act or practice under the Dodd-Frank Wall Street Reform and Consumer Protection Act and made a conforming change, effective July 1, 2021