§ 627 — Standards for preferred lender lists

§ 627. Standards for preferred lender lists. A covered institution\nthat provides or makes available a preferred lender list must comply\nwith the following standards:\n 1. A preferred lender list must disclose the process by which the\ncovered institution selected lending institutions for such preferred\nlender list, including, but not limited to, the method and criteria used\nto choose the lending institutions and the relative importance of those\ncriteria;\n 2. A preferred lender list must state in the same font size and same\nmanner as the predominant text on the document that borrowers have the\nright and ability to select the education loan provider of their choice,\nare not required to use any of the lenders on such preferred lender\nlist, and will suffer no penalty for choosing a lender that is not on\nsuch preferred lender list;\n 3. The covered institution's decision to include a lending institution\non any preferred lender list and the covered institution's decision as\nto where on the preferred lender list the lending institution's name\nappears shall be determined solely by consideration of the best\ninterests of the borrowers who may use such preferred lender list\nwithout regard to the pecuniary interests of the covered institution;\n 4. The contents of any preferred lender list shall be reviewed and\nupdated no less than annually;\n 5. No lending institution shall be placed on a preferred lender list\nunless such lending institution provides assurance to the covered\ninstitution and to borrowers who take out loans from such lending\ninstitution that the advertised benefits upon repayment will continue to\ninure to the benefit of borrowers regardless of whether the lending\ninstitution's loans are sold;\n 6. No lending institution that, to the covered institution's knowledge\nafter reasonable inquiry, has an agreement to sell its loans to another\nunaffiliated lending institution shall be included on a preferred lender\nlist unless such agreement is disclosed therein in the same font size\nand same manner as the predominant text on the document in which the\npreferred lender list appears;\n 7. No lending institution shall be placed on a covered institution's\npreferred lender lists or in favored placement on a covered\ninstitution's preferred lender lists for a particular type of loan, in\nexchange for benefits provided to the covered institution or to the\ncovered institution's students in connection with a different type of\nloan.\n