§ 6.2-2610 — Prohibited activities; compliance with federal laws and regulations

Virginia § 6.2-2610

• Jurisdiction: Virginia
• Title 6.2: Financial Institutions and Services
• Subtitle IV: Other Financial Activities
• Ch. 26: Qualified Education Loan Servicers

Text

A. No qualified education loan servicer shall:

1. Directly or indirectly employ any scheme, device, or artifice to defraud or mislead qualified education loan borrowers;

2. Engage in any unfair or deceptive act or practice toward any person or misrepresent or omit any material information in connection with the servicing of a qualified education loan, including misrepresenting (i) the amount, nature, or terms of any fee or payment due or claimed to be due on a qualified education loan; (ii) the terms and conditions of the loan agreement; or (iii) the borrower's obligations under the loan;

3. Obtain property by fraud or misrepresentation;

4. Misapply qualified education loan payments to the outstanding balance of a qualified education loan;

5. Provide inaccurate information to a nationally recognized consumer credit bureau;

6. Fail to report both the favorable and unfavorable payment history of the borrower to a nationally recognized consumer credit bureau at least annually if the loan servicer regularly reports information to such a credit bureau;

7. Fail to communicate with an authorized representative of the borrower who provides a written authorization signed by the borrower, provided that the loan servicer may adopt procedures reasonably related to verifying that the representative is in fact authorized to act on behalf of the borrower;

8. Make any false statement of a material fact or omit any material fact in connection with any information provided to the Commission or another governmental authority; or

9. Engage in any other prohibited activities identified in regulations adopted by the Commission pursuant to this chapter.

B. A qualified education loan servicer shall comply with all federal laws and regulations applicable to the conduct of its licensed business. In addition to any other remedies provided by law, a violation of any such federal law or regulation shall be deemed a violation of this chapter and a basis upon which the Commission may take enforcement action pursuant to § 6.2-2615, 6.2-2617, or 6.2-2618.

C. A qualified education loan servicer shall not engage in abusive acts or practices when servicing a qualified education loan. An act or practice is abusive in connection with the servicing of a qualified education loan if the act or practice does either of the following:

1. Materially interferes with the ability of a borrower to understand a term or condition of a qualified education loan; or

2. Takes unreasonable advantage of:

a. A lack of understanding on the part of a qualified education loan borrower of the material risks, costs, or conditions of the qualified education loan;

b. The reasonable reliance by the borrower on a person engaged in the servicing of a qualified education loan to act in the interests of the borrower; or

c. The inability of a borrower to protect the interests of the borrower when selecting (i) a qualified education loan or (ii) a feature, term, or condition of a qualified education loan.

Legislative History

2020, cc. 1198, 1250.