S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7582
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                May 3, 2017
                                ___________
 
 Introduced by M. of A. ZEBROWSKI, SEAWRIGHT, WALKER, ORTIZ, ENGLEBRIGHT,
   GJONAJ,  MONTESANO,  SIMON, JAFFEE, GOTTFRIED, COLTON, D'URSO, HARRIS,
   HOOPER, BLAKE -- Multi-Sponsored by -- M. of A.  DE LA ROSA,  HYNDMAN,
   THIELE -- read once and referred to the Committee on Banks
 
 AN  ACT to amend the banking law, in relation to requiring the licensure
   of student loan servicers
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. The banking law is amended by adding a new article 14-A to
 read as follows:
                               ARTICLE XIV-A
                          STUDENT LOAN SERVICERS
 SECTION 710. DEFINITIONS.
         711. LICENSING.
         712. APPLICATION FOR A STUDENT LOAN SERVICER LICENSE; FEES.
         713. APPLICATION PROCESS TO RECEIVE LICENSE  TO  ENGAGE  IN  THE
                BUSINESS OF STUDENT LOAN SERVICING.
         714. CHANGES IN OFFICERS AND DIRECTORS.
         715. CHANGES IN CONTROL.
         716. GROUNDS FOR SUSPENSION OR REVOCATION OF LICENSE.
         717. BOOKS AND RECORDS; REPORTS AND ELECTRONIC FILING.
         718. RULES AND REGULATIONS.
         719. PROHIBITED PRACTICES.
         720. SERVICING STUDENT LOANS WITHOUT A LICENSE.
         721. RESPONSIBILITIES.
         722. EXAMINATIONS.
         723. PENALTIES FOR VIOLATION OF THIS ARTICLE.
         724. SEVERABILITY OF PROVISIONS.
         725. COMPLIANCE WITH OTHER LAWS.
   §  710. DEFINITIONS. 1. "APPLICANT" SHALL MEAN ANY PERSON APPLYING FOR
 A LICENSE TO BE A STUDENT LOAN SERVICER.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD11195-01-7

 A. 7582                             2
 
   2. "BORROWER" SHALL MEAN ANY RESIDENT OF THIS STATE WHO HAS RECEIVED A
 STUDENT LOAN OR AGREED IN WRITING TO PAY A STUDENT LOAN  OR  ANY  PERSON
 WHO  SHARES A LEGAL OBLIGATION WITH SUCH RESIDENT FOR REPAYING A STUDENT
 LOAN.
   3. "BORROWER BENEFIT" SHALL MEAN AN INCENTIVE OFFERED TO A BORROWER IN
 CONNECTION  WITH  THE  ORIGINATION  OF A STUDENT LOAN, INCLUDING BUT NOT
 LIMITED TO AN INTEREST RATE REDUCTION, PRINCIPAL REBATE, FEE  WAIVER  OR
 REBATE, LOAN CANCELLATION, OR COSIGNER RELEASE.
   4.  "EXEMPT ORGANIZATION" SHALL MEAN ANY BANKING ORGANIZATION, FOREIGN
 BANKING CORPORATION, NATIONAL BANK, FEDERAL SAVINGS ASSOCIATION, FEDERAL
 CREDIT UNION, OR ANY BANK, TRUST COMPANY, SAVINGS BANK, SAVINGS AND LOAN
 ASSOCIATION, OR CREDIT UNION ORGANIZED  UNDER  THE  LAWS  OF  ANY  OTHER
 STATE.
   5.  "PERSON"  SHALL  MEAN  ANY  INDIVIDUAL,  ASSOCIATION, CORPORATION,
 LIMITED LIABILITY COMPANY, PARTNERSHIP, TRUST, UNINCORPORATED  ORGANIZA-
 TION, OR ANY OTHER ENTITY.
   6.  "SERVICER" OR "STUDENT LOAN SERVICER" SHALL MEAN A PERSON LICENSED
 PURSUANT TO SECTION SEVEN HUNDRED ELEVEN OF THIS ARTICLE  TO  ENGAGE  IN
 THE BUSINESS OF SERVICING ANY STUDENT LOAN OF A BORROWER.
   7. "SERVICING" SHALL MEAN:
   (A) RECEIVING ANY PAYMENT FROM A BORROWER PURSUANT TO THE TERMS OF ANY
 STUDENT LOAN;
   (B) APPLYING ANY PAYMENT TO A BORROWER'S ACCOUNT PURSUANT TO THE TERMS
 OF  A  STUDENT  LOAN OR THE CONTRACT GOVERNING THE SERVICING OF ANY SUCH
 LOAN;
   (C) PROVIDING ANY NOTIFICATION OF AMOUNTS OWED ON A STUDENT LOAN BY OR
 ON ACCOUNT OF ANY BORROWER;
   (D) DURING A PERIOD WHEN A BORROWER IS NOT REQUIRED TO MAKE A  PAYMENT
 ON  A STUDENT LOAN, MAINTAINING ACCOUNT RECORDS FOR THE STUDENT LOAN AND
 COMMUNICATING WITH THE BORROWER REGARDING THE STUDENT LOAN ON BEHALF  OF
 THE OWNER OF THE STUDENT LOAN PROMISSORY NOTE;
   (E)  INTERACTING  WITH  A  BORROWER  WITH  RESPECT TO OR REGARDING ANY
 ATTEMPT TO AVOID DEFAULT ON THE BORROWER'S STUDENT LOAN, OR FACILITATING
 THE ACTIVITIES DESCRIBED IN PARAGRAPH (A) OR (B) OF THIS SUBDIVISION; OR
   (F) PERFORMING OTHER ADMINISTRATIVE SERVICES WITH RESPECT TO A BORROW-
 ER'S STUDENT LOAN.
   8. "STUDENT LOAN" SHALL MEAN ANY LOAN TO A BORROWER TO FINANCE POSTSE-
 CONDARY EDUCATION OR EXPENSES RELATED TO POSTSECONDARY EDUCATION.
   § 711. LICENSING. 1. NO PERSON SHALL ENGAGE IN THE BUSINESS OF SERVIC-
 ING STUDENT LOANS OWED BY ONE OR MORE BORROWERS RESIDING IN  THIS  STATE
 WITHOUT  FIRST  BEING  LICENSED  BY THE SUPERINTENDENT AS A STUDENT LOAN
 SERVICER IN ACCORDANCE WITH THIS ARTICLE AND SUCH REGULATIONS AS MAY  BE
 PRESCRIBED BY THE SUPERINTENDENT.
   2. THE LICENSING PROVISIONS OF THIS SUBDIVISION SHALL NOT APPLY TO ANY
 EXEMPT ORGANIZATION; PROVIDED THAT SUCH EXEMPT ORGANIZATION NOTIFIES THE
 SUPERINTENDENT  THAT THE EXEMPT ORGANIZATION IS ACTING AS A STUDENT LOAN
 SERVICER IN THIS STATE AND COMPLIES WITH SECTIONS SEVEN HUNDRED NINETEEN
 AND SEVEN HUNDRED TWENTY-ONE OF THIS ARTICLE AND ANY REGULATION APPLICA-
 BLE TO STUDENT LOAN SERVICERS PROMULGATED BY THE SUPERINTENDENT.
   § 712. APPLICATION FOR A STUDENT LOAN SERVICER LICENSE; FEES. 1.   THE
 APPLICATION  FOR  A  LICENSE  TO  BE A STUDENT LOAN SERVICER SHALL BE IN
 WRITING, UNDER OATH, AND IN THE FORM PRESCRIBED BY  THE  SUPERINTENDENT.
 NOTWITHSTANDING  ARTICLE  THREE OF THE STATE TECHNOLOGY LAW OR ANY OTHER
 LAW TO THE CONTRARY, THE SUPERINTENDENT MAY REQUIRE THAT AN  APPLICATION
 FOR A LICENSE OR ANY OTHER SUBMISSION OR APPLICATION FOR APPROVAL AS MAY
 BE  REQUIRED  BY THIS ARTICLE BE MADE OR EXECUTED BY ELECTRONIC MEANS IF

 A. 7582                             3
 
 HE OR SHE DEEMS IT NECESSARY  TO  ENSURE  THE  EFFICIENT  AND  EFFECTIVE
 ADMINISTRATION   OF  THIS  ARTICLE.  THE  APPLICATION  SHALL  INCLUDE  A
 DESCRIPTION OF THE ACTIVITIES OF THE APPLICANT, IN SUCH DETAIL  AND  FOR
 SUCH PERIODS AS THE SUPERINTENDENT MAY REQUIRE, INCLUDING:
   (A)  AN  AFFIRMATION  OF FINANCIAL SOLVENCY NOTING SUCH CAPITALIZATION
 REQUIREMENTS AS MAY BE REQUIRED BY THE  SUPERINTENDENT,  AND  ACCESS  TO
 SUCH CREDIT AS MAY BE REQUIRED BY THE SUPERINTENDENT;
   (B)  A  FINANCIAL STATEMENT PREPARED BY A CERTIFIED PUBLIC ACCOUNTANT,
 THE ACCURACY OF WHICH IS SWORN TO UNDER OATH BEFORE A NOTARY  PUBLIC  BY
 AN OFFICER OR OTHER REPRESENTATIVE OF THE APPLICANT WHO IS AUTHORIZED TO
 EXECUTE SUCH DOCUMENTS;
   (C) AN AFFIRMATION THAT THE APPLICANT, OR ITS MEMBERS, OFFICERS, PART-
 NERS, DIRECTORS AND PRINCIPALS AS MAY BE APPROPRIATE, ARE AT LEAST TWEN-
 TY-ONE YEARS OF AGE;
   (D)  INFORMATION  AS TO THE CHARACTER, FITNESS, FINANCIAL AND BUSINESS
 RESPONSIBILITY, BACKGROUND AND EXPERIENCES  OF  THE  APPLICANT,  OR  ITS
 MEMBERS,  OFFICERS,  PARTNERS, DIRECTORS AND PRINCIPALS AS MAY BE APPRO-
 PRIATE; AND
   (E) ANY ADDITIONAL DETAIL OR INFORMATION REQUIRED BY  THE  SUPERINTEN-
 DENT.
   2. AN APPLICATION TO BECOME A STUDENT LOAN SERVICER OR ANY APPLICATION
 WITH RESPECT TO A STUDENT LOAN SERVICER SHALL BE ACCOMPANIED BY A FEE AS
 PRESCRIBED PURSUANT TO SECTION EIGHTEEN-A OF THIS CHAPTER.
   §  713.  APPLICATION PROCESS TO RECEIVE LICENSE TO ENGAGE IN THE BUSI-
 NESS OF STUDENT LOAN SERVICING. 1. UPON THE FILING OF AN APPLICATION FOR
 A LICENSE, IF THE SUPERINTENDENT SHALL FIND THAT THE FINANCIAL RESPONSI-
 BILITY, EXPERIENCE, CHARACTER, AND GENERAL FITNESS OF THE APPLICANT AND,
 IF APPLICABLE, THE MEMBERS, OFFICERS, PARTNERS, DIRECTORS AND PRINCIPALS
 OF THE APPLICANT ARE SUCH AS TO COMMAND THE CONFIDENCE OF THE  COMMUNITY
 AND TO WARRANT BELIEF THAT THE BUSINESS WILL BE OPERATED HONESTLY, FAIR-
 LY,  AND EFFICIENTLY WITHIN THE PURPOSE OF THIS ARTICLE, THE SUPERINTEN-
 DENT SHALL THEREUPON ISSUE A LICENSE IN DUPLICATE TO ENGAGE IN THE BUSI-
 NESS OF SERVICING STUDENT LOANS DESCRIBED IN SECTION SEVEN  HUNDRED  TEN
 OF  THIS  ARTICLE  IN ACCORDANCE WITH THE PROVISIONS OF THIS ARTICLE. IF
 THE SUPERINTENDENT SHALL NOT SO FIND, THE SUPERINTENDENT SHALL NOT ISSUE
 A LICENSE, AND THE SUPERINTENDENT SHALL SO  NOTIFY  THE  APPLICANT.  THE
 SUPERINTENDENT SHALL TRANSMIT ONE COPY OF A LICENSE TO THE APPLICANT AND
 FILE ANOTHER COPY IN THE OFFICE OF THE DEPARTMENT OF FINANCIAL SERVICES.
 UPON  RECEIPT  OF SUCH LICENSE, A STUDENT LOAN SERVICER SHALL BE AUTHOR-
 IZED TO ENGAGE IN THE BUSINESS OF SERVICING STUDENT LOANS IN  ACCORDANCE
 WITH  THE  PROVISIONS OF THIS ARTICLE. SUCH LICENSE SHALL REMAIN IN FULL
 FORCE AND EFFECT UNTIL IT IS SURRENDERED BY THE SERVICER OR  REVOKED  OR
 SUSPENDED AS HEREINAFTER PROVIDED.
   2.  THE  SUPERINTENDENT MAY REFUSE TO ISSUE A LICENSE PURSUANT TO THIS
 ARTICLE IF HE OR SHE SHALL FIND THAT THE APPLICANT, OR ANY PERSON WHO IS
 A DIRECTOR, OFFICER, PARTNER, AGENT,  EMPLOYEE,  MEMBER  OR  SUBSTANTIAL
 STOCKHOLDER OF THE APPLICANT:
   (A)  LACKS  THE  GOOD  MORAL  CHARACTER AND GENERAL FITNESS SUCH AS TO
 WARRANT BELIEF THAT THE LICENSED  ENTITY  WOULD  BE  OPERATED  HONESTLY,
 FAIRLY AND EFFICIENTLY WITHIN THE PURPOSES OF THIS ARTICLE;
   (B) HAS HAD A LICENSE OR REGISTRATION REVOKED BY THE SUPERINTENDENT OR
 ANY OTHER REGULATOR OR JURISDICTION;
   (C)  HAS  BEEN  AN  OFFICER,  DIRECTOR, PARTNER, MEMBER OR SUBSTANTIAL
 STOCKHOLDER OF AN ENTITY WHICH HAS HAD A LICENSE OR REGISTRATION REVOKED
 BY THE SUPERINTENDENT OR ANY OTHER REGULATOR OR JURISDICTION; OR

 A. 7582                             4
 
   (D) HAS BEEN AN AGENT, EMPLOYEE, OFFICER, DIRECTOR, PARTNER OR  MEMBER
 OF  AN  ENTITY  WHICH  HAS  HAD A LICENSE OR REGISTRATION REVOKED BY THE
 SUPERINTENDENT WHERE SUCH PERSON SHALL HAVE BEEN  FOUND  BY  THE  SUPER-
 INTENDENT TO BEAR RESPONSIBILITY IN CONNECTION WITH THE REVOCATION.
   3.  THE TERM "SUBSTANTIAL STOCKHOLDER", AS USED IN THIS SECTION, SHALL
 BE DEEMED TO REFER TO A PERSON OWNING OR CONTROLLING DIRECTLY  OR  INDI-
 RECTLY TEN PER CENTUM OR MORE OF THE TOTAL OUTSTANDING STOCK OF A CORPO-
 RATION.
   §  714.  CHANGES  IN OFFICERS AND DIRECTORS. UPON ANY CHANGE OF ANY OF
 THE EXECUTIVE OFFICERS, DIRECTORS, PARTNERS OR MEMBERS  OF  ANY  STUDENT
 LOAN SERVICER, THE STUDENT LOAN SERVICER SHALL SUBMIT TO THE SUPERINTEN-
 DENT  THE  NAME,  ADDRESS, AND OCCUPATION OF EACH NEW OFFICER, DIRECTOR,
 PARTNER OR MEMBER, AND PROVIDE SUCH OTHER INFORMATION AS THE SUPERINTEN-
 DENT MAY REQUIRE.
   § 715. CHANGES IN CONTROL. 1. IT SHALL BE UNLAWFUL,  EXCEPT  WITH  THE
 PRIOR  APPROVAL  OF THE SUPERINTENDENT, FOR ANY ACTION TO BE TAKEN WHICH
 RESULTS IN A CHANGE OF CONTROL OF THE BUSINESS OF A STUDENT LOAN  SERVI-
 CER.  PRIOR  TO  ANY CHANGE OF CONTROL, THE PERSON DESIROUS OF ACQUIRING
 CONTROL OF THE BUSINESS OF A STUDENT LOAN SERVICER  SHALL  MAKE  WRITTEN
 APPLICATION  TO  THE  SUPERINTENDENT  AND  PAY  AN  INVESTIGATION FEE AS
 PRESCRIBED PURSUANT TO SECTION EIGHTEEN-A OF THIS CHAPTER TO THE  SUPER-
 INTENDENT.  THE APPLICATION SHALL CONTAIN SUCH INFORMATION AS THE SUPER-
 INTENDENT, BY RULE OR REGULATION, MAY PRESCRIBE AS NECESSARY  OR  APPRO-
 PRIATE   FOR  THE  PURPOSE  OF  MAKING  THE  DETERMINATION  REQUIRED  BY
 SUBDIVISION TWO OF THIS SECTION. SUCH INFORMATION SHALL INCLUDE, BUT NOT
 BE LIMITED TO, THE INFORMATION AND OTHER MATERIAL REQUIRED FOR A STUDENT
 LOAN SERVICER BY SUBDIVISION ONE OF SECTION SEVEN HUNDRED TWELVE OF THIS
 ARTICLE.
   2. THE SUPERINTENDENT SHALL APPROVE OR DISAPPROVE THE PROPOSED  CHANGE
 OF  CONTROL OF A STUDENT LOAN SERVICER IN ACCORDANCE WITH THE PROVISIONS
 OF SECTION SEVEN HUNDRED THIRTEEN OF THIS ARTICLE.
   3. FOR A PERIOD OF SIX MONTHS FROM THE DATE OF  QUALIFICATION  THEREOF
 AND  FOR  SUCH  ADDITIONAL  PERIOD  OF  TIME  AS  THE SUPERINTENDENT MAY
 PRESCRIBE, IN WRITING, THE PROVISIONS OF SUBDIVISIONS  ONE  AND  TWO  OF
 THIS  SECTION  SHALL  NOT APPLY TO A TRANSFER OF CONTROL BY OPERATION OF
 LAW TO THE LEGAL REPRESENTATIVE, AS HEREINAFTER DEFINED, OF ONE WHO  HAS
 CONTROL  OF  A  STUDENT  LOAN SERVICER. THEREAFTER, SUCH LEGAL REPRESEN-
 TATIVE SHALL COMPLY WITH THE PROVISIONS OF SUBDIVISIONS ONE AND  TWO  OF
 THIS SECTION. THE PROVISIONS OF SUBDIVISIONS ONE AND TWO OF THIS SECTION
 SHALL BE APPLICABLE TO AN APPLICATION MADE UNDER THIS SECTION BY A LEGAL
 REPRESENTATIVE.  THE  TERM  "LEGAL  REPRESENTATIVE", FOR THE PURPOSES OF
 THIS SUBDIVISION, SHALL MEAN A PERSON  DULY  APPOINTED  BY  A  COURT  OF
 COMPETENT  JURISDICTION  TO  ACT  AS  EXECUTOR,  ADMINISTRATOR, TRUSTEE,
 COMMITTEE, CONSERVATOR OR RECEIVER, INCLUDING A PERSON  WHO  SUCCEEDS  A
 LEGAL REPRESENTATIVE AND A PERSON ACTING IN AN ANCILLARY CAPACITY THERE-
 TO IN ACCORDANCE WITH THE PROVISIONS OF SUCH COURT APPOINTMENT.
   4.  AS  USED  IN THIS SECTION 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 OWNER-
 SHIP OF VOTING STOCK OF ANY PERSON WHICH POSSESSES SUCH POWER OR  OTHER-
 WISE.    CONTROL  SHALL  BE PRESUMED TO EXIST IF ANY PERSON, DIRECTLY OR
 INDIRECTLY, OWNS, CONTROLS OR HOLDS WITH POWER TO VOTE TEN PER CENTUM OR
 MORE OF THE VOTING STOCK OF ANY STUDENT LOAN SERVICER OR OF  ANY  PERSON
 WHICH  OWNS, CONTROLS OR HOLDS WITH POWER TO VOTE TEN PER CENTUM OR MORE
 OF THE VOTING STOCK OF ANY STUDENT LOAN SERVICER, BUT NO PERSON SHALL BE

 A. 7582                             5
 
 DEEMED TO CONTROL A STUDENT LOAN SERVICER SOLELY BY REASON OF  BEING  AN
 OFFICER  OR  DIRECTOR  OF SUCH STUDENT LOAN SERVICER. THE SUPERINTENDENT
 MAY IN HIS 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.
   §  716. GROUNDS FOR SUSPENSION OR REVOCATION OF LICENSE. 1. THE SUPER-
 INTENDENT MAY REVOKE ANY LICENSE TO ENGAGE IN THE BUSINESS OF A  STUDENT
 LOAN  SERVICER  ISSUED  PURSUANT  TO THIS ARTICLE IF A DETERMINATION HAS
 BEEN MADE, AFTER NOTICE AND A HEARING, THAT:
   (A) A SERVICER HAS VIOLATED ANY PROVISION OF THIS ARTICLE, ANY RULE OR
 REGULATION PROMULGATED  BY  THE  SUPERINTENDENT  UNDER  AND  WITHIN  THE
 AUTHORITY OF THIS ARTICLE, OR ANY OTHER APPLICABLE LAW;
   (B)  A  SERVICER  ENGAGES  IN FRAUD, INTENTIONAL MISREPRESENTATION, OR
 GROSS NEGLIGENCE IN SERVICING A STUDENT LOAN;
   (C) THE COMPETENCE, EXPERIENCE, CHARACTER, OR GENERAL FITNESS  OF  THE
 SERVICER, AN INDIVIDUAL CONTROLLING, DIRECTLY OR INDIRECTLY, TEN PERCENT
 OR  MORE  OF  THE  OUTSTANDING  INTERESTS, OR ANY PERSON RESPONSIBLE FOR
 SERVICING A STUDENT LOAN FOR THE SERVICER INDICATES THAT IT  IS  NOT  IN
 THE PUBLIC INTEREST TO PERMIT THE SERVICER TO CONTINUE SERVICING STUDENT
 LOANS;
   (D) THE SERVICER IS INSOLVENT, SUSPENDS PAYMENT OF ITS OBLIGATIONS, OR
 MAKES A GENERAL ASSIGNMENT FOR THE BENEFIT OF ITS CREDITORS; OR
   (E)  THE SERVICER HAS VIOLATED THE LAWS OF THIS STATE, ANY OTHER STATE
 LAW OR ANY FEDERAL LAW INVOLVING FRAUDULENT OR DISHONEST DEALING,  OR  A
 FINAL  JUDGMENT  HAS  BEEN  ENTERED AGAINST A STUDENT LOAN SERVICER IN A
 CIVIL ACTION UPON GROUNDS OF FRAUD, MISREPRESENTATION OR DECEIT.
   2. THE SUPERINTENDENT MAY, ON GOOD CAUSE SHOWN, OR WHERE  THERE  IS  A
 SUBSTANTIAL  RISK  OF  PUBLIC HARM, SUSPEND ANY LICENSE FOR A PERIOD NOT
 EXCEEDING THIRTY DAYS, PENDING INVESTIGATION. "GOOD CAUSE", AS  USED  IN
 THIS SUBDIVISION, SHALL EXIST WHEN A STUDENT LOAN SERVICER HAS DEFAULTED
 IN PERFORMING ITS FINANCIAL ENGAGEMENTS OR ENGAGES IN DISHONEST OR INEQ-
 UITABLE  PRACTICES  WHICH  MAY  CAUSE  SUBSTANTIAL  HARM  TO THE PERSONS
 AFFORDED THE PROTECTION OF THIS ARTICLE.
   3. NO LICENSE SHALL BE REVOKED OR SUSPENDED EXCEPT AFTER NOTICE AND  A
 HEARING  THEREON.    ANY  ORDER  OF SUSPENSION ISSUED AFTER NOTICE AND A
 HEARING MAY INCLUDE AS A CONDITION OF  REINSTATEMENT  THAT  THE  STUDENT
 LOAN  SERVICER  MAKE  RESTITUTION  TO CONSUMERS OF FEES OR OTHER CHARGES
 WHICH HAVE BEEN IMPROPERLY  CHARGED  OR  COLLECTED,  INCLUDING  BUT  NOT
 LIMITED  TO BY ALLOCATING PAYMENTS CONTRARY TO A BORROWER'S DIRECTION OR
 IN A MANNER THAT FAILS TO HELP A BORROWER AVOID DEFAULT,  AS  DETERMINED
 BY  THE  SUPERINTENDENT.  ANY HEARING HELD PURSUANT TO THE PROVISIONS OF
 THIS SECTION SHALL BE NOTICED, CONDUCTED AND ADMINISTERED IN  COMPLIANCE
 WITH THE STATE ADMINISTRATIVE PROCEDURE ACT.
   4.  ANY  STUDENT LOAN SERVICER MAY SURRENDER ANY LICENSE BY DELIVERING
 TO THE SUPERINTENDENT WRITTEN NOTICE  THAT  THE  STUDENT  LOAN  SERVICER
 THEREBY SURRENDERS SUCH LICENSE, BUT SUCH SURRENDER SHALL NOT AFFECT THE
 SERVICER'S  CIVIL  OR CRIMINAL LIABILITY FOR ACTS COMMITTED PRIOR TO THE
 SURRENDER. IF SUCH SURRENDER IS MADE AFTER THE ISSUANCE  BY  THE  SUPER-
 INTENDENT  OF  A  STATEMENT OF CHARGES AND NOTICE OF HEARING, THE SUPER-
 INTENDENT MAY PROCEED AGAINST THE SERVICER AS IF THE SURRENDER  HAD  NOT
 TAKEN PLACE.

 A. 7582                             6
 
   5. NO REVOCATION, SUSPENSION, OR SURRENDER OF ANY LICENSE SHALL IMPAIR
 OR AFFECT THE OBLIGATION OF ANY PRE-EXISTING LAWFUL CONTRACT BETWEEN THE
 STUDENT LOAN SERVICER AND ANY PERSON, INCLUDING THE DEPARTMENT OF FINAN-
 CIAL SERVICES.
   6.  EVERY LICENSE ISSUED PURSUANT TO THIS ARTICLE SHALL REMAIN IN FULL
 FORCE AND EFFECT UNTIL THE SAME SHALL HAVE BEEN SURRENDERED, REVOKED  OR
 SUSPENDED IN ACCORDANCE WITH ANY OTHER PROVISIONS OF THIS ARTICLE.
   7.  WHENEVER  THE  SUPERINTENDENT  SHALL  REVOKE  OR SUSPEND A LICENSE
 ISSUED PURSUANT TO THIS ARTICLE, HE OR SHE SHALL  FORTHWITH  EXECUTE  IN
 DUPLICATE  A WRITTEN ORDER TO THAT EFFECT. THE SUPERINTENDENT SHALL FILE
 ONE COPY OF THE ORDER IN THE  OFFICE  OF  THE  DEPARTMENT  OF  FINANCIAL
 SERVICES  AND SHALL FORTHWITH SERVE THE OTHER COPY UPON THE STUDENT LOAN
 SERVICER. ANY SUCH ORDER MAY BE REVIEWED IN THE MANNER PROVIDED BY ARTI-
 CLE SEVENTY-EIGHT OF THE CIVIL PRACTICE LAW AND RULES.
   § 717. BOOKS AND RECORDS;  REPORTS  AND  ELECTRONIC  FILING.  1.  EACH
 STUDENT  LOAN SERVICER AND EXEMPT ORGANIZATION SHALL KEEP AND USE IN ITS
 BUSINESS SUCH BOOKS, ACCOUNTS AND RECORDS AS WILL ENABLE THE SUPERINTEN-
 DENT TO DETERMINE WHETHER THE SERVICER OR EXEMPT ORGANIZATION IS COMPLY-
 ING WITH THE PROVISIONS OF THIS ARTICLE AND WITH  THE  RULES  AND  REGU-
 LATIONS  LAWFULLY  MADE BY THE SUPERINTENDENT. EVERY SERVICER AND EXEMPT
 ORGANIZATION SHALL PRESERVE SUCH BOOKS, ACCOUNTS, AND  RECORDS,  FOR  AT
 LEAST THREE YEARS.
   2.  (A) EACH STUDENT LOAN SERVICER SHALL ANNUALLY, ON OR BEFORE A DATE
 TO BE DETERMINED BY THE SUPERINTENDENT, FILE A REPORT  WITH  THE  SUPER-
 INTENDENT  GIVING  SUCH  INFORMATION  AS  THE SUPERINTENDENT MAY REQUIRE
 CONCERNING THE BUSINESS AND OPERATIONS  DURING  THE  PRECEDING  CALENDAR
 YEAR OF SUCH SERVICER UNDER AUTHORITY OF THIS ARTICLE. SUCH REPORT SHALL
 BE  SUBSCRIBED  AND AFFIRMED AS TRUE BY THE SERVICER UNDER THE PENALTIES
 OF PERJURY AND SHALL BE IN THE FORM PRESCRIBED BY THE SUPERINTENDENT.
   (B) IN ADDITION TO ANNUAL REPORTS, THE SUPERINTENDENT MAY REQUIRE SUCH
 ADDITIONAL REGULAR OR SPECIAL REPORTS AS HE OR SHE MAY DEEM NECESSARY TO
 THE PROPER SUPERVISION OF STUDENT LOAN  SERVICERS  UNDER  THIS  ARTICLE.
 SUCH  ADDITIONAL REPORTS SHALL BE SUBSCRIBED AND AFFIRMED AS TRUE BY THE
 SERVICER UNDER THE PENALTIES  OF  PERJURY  AND  SHALL  BE  IN  THE  FORM
 PRESCRIBED BY THE SUPERINTENDENT.
   3.  NOTWITHSTANDING  ARTICLE  THREE OF THE STATE TECHNOLOGY LAW OR ANY
 OTHER LAW TO THE CONTRARY,  THE  SUPERINTENDENT  MAY  REQUIRE  THAT  ANY
 SUBMISSION  OR APPROVAL AS MAY BE REQUIRED BY THE SUPERINTENDENT BE MADE
 OR EXECUTED BY ELECTRONIC MEANS IF HE  OR  SHE  DEEMS  IT  NECESSARY  TO
 ENSURE THE EFFICIENT ADMINISTRATION OF THIS ARTICLE.
   §  718.  RULES  AND  REGULATIONS. 1. IN ADDITION TO SUCH POWERS AS MAY
 OTHERWISE BE PRESCRIBED BY THIS CHAPTER, THE  SUPERINTENDENT  IS  HEREBY
 AUTHORIZED AND EMPOWERED TO PROMULGATE SUCH RULES AND REGULATIONS AS MAY
 IN THE JUDGMENT OF THE SUPERINTENDENT BE CONSISTENT WITH THE PURPOSES OF
 THIS  ARTICLE,  OR  APPROPRIATE FOR THE EFFECTIVE ADMINISTRATION OF THIS
 ARTICLE, INCLUDING, BUT NOT LIMITED TO:
   (A) SUCH RULES AND REGULATIONS IN CONNECTION WITH  THE  ACTIVITIES  OF
 STUDENT  LOAN SERVICERS AND EXEMPT ORGANIZATIONS AS MAY BE NECESSARY AND
 APPROPRIATE FOR THE PROTECTION OF BORROWERS IN THIS STATE;
   (B) SUCH RULES AND REGULATIONS AS MAY BE NECESSARY AND APPROPRIATE  TO
 DEFINE UNFAIR, DECEPTIVE OR ABUSIVE ACTS OR PRACTICES IN CONNECTION WITH
 THE  ACTIVITIES  OF  STUDENT  LOAN SERVICERS AND EXEMPT ORGANIZATIONS IN
 SERVICING STUDENT LOANS;
   (C) SUCH RULES AND REGULATIONS AS MAY DEFINE THE TERMS  USED  IN  THIS
 ARTICLE  AND AS MAY BE NECESSARY AND APPROPRIATE TO INTERPRET AND IMPLE-
 MENT THE PROVISIONS OF THIS ARTICLE; AND

 A. 7582                             7
 
   (D) SUCH RULES AND REGULATIONS AS MAY BE NECESSARY FOR THE ENFORCEMENT
 OF THIS ARTICLE.
   2.  THE SUPERINTENDENT IS HEREBY AUTHORIZED AND EMPOWERED TO MAKE SUCH
 SPECIFIC RULINGS, DEMANDS AND FINDINGS AS THE  SUPERINTENDENT  MAY  DEEM
 NECESSARY FOR THE PROPER CONDUCT OF THE STUDENT LOAN SERVICING INDUSTRY.
   § 719. PROHIBITED PRACTICES. NO STUDENT LOAN SERVICER SHALL:
   1.  DIRECTLY  EMPLOY  ANY  SCHEME,  DEVICE  OR  ARTIFICE TO DEFRAUD OR
 MISLEAD A BORROWER.
   2. INTENTIONALLY ENGAGE IN ANY UNFAIR, DECEPTIVE OR PREDATORY  ACT  OR
 PRACTICE TOWARD ANY PERSON OR MISREPRESENT OR OMIT ANY MATERIAL INFORMA-
 TION  IN CONNECTION WITH THE SERVICING OF A STUDENT 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 LOAN, THE TERMS AND
 CONDITIONS OF THE LOAN AGREEMENT OR THE BORROWER'S OBLIGATIONS UNDER THE
 LOAN.
   3. INTENTIONALLY MISAPPLY PAYMENTS TO THE OUTSTANDING BALANCE  OF  ANY
 STUDENT LOAN OR TO ANY RELATED INTEREST OR FEES.
   4.  INTENTIONALLY PROVIDE MISLEADING INFORMATION TO A CONSUMER REPORT-
 ING AGENCY.
   5. REFUSE TO COMMUNICATE WITH  AN  AUTHORIZED  REPRESENTATIVE  OF  THE
 BORROWER  WHO  PROVIDES  A WRITTEN AUTHORIZATION SIGNED BY THE BORROWER,
 PROVIDED THAT THE SERVICER MAY ADOPT PROCEDURES  REASONABLY  RELATED  TO
 VERIFYING THAT THE REPRESENTATIVE IS IN FACT AUTHORIZED TO ACT ON BEHALF
 OF THE BORROWER.
   6.  KNOWINGLY MAKE ANY FALSE STATEMENT OR MAKE ANY OMISSION OF A MATE-
 RIAL FACT IN CONNECTION WITH ANY INFORMATION OR  REPORTS  FILED  WITH  A
 GOVERNMENTAL AGENCY OR IN CONNECTION WITH ANY INVESTIGATION CONDUCTED BY
 THE SUPERINTENDENT OR ANOTHER GOVERNMENTAL AGENCY.
   §  720. SERVICING STUDENT LOANS WITHOUT A LICENSE. 1. WHENEVER, IN THE
 OPINION OF THE SUPERINTENDENT, A PERSON IS ENGAGED IN  THE  BUSINESS  OF
 SERVICING  STUDENT LOANS, EITHER ACTUALLY OR THROUGH SUBTERFUGE, WITHOUT
 A LICENSE FROM THE SUPERINTENDENT, THE  SUPERINTENDENT  MAY  ORDER  THAT
 PERSON  TO DESIST AND REFRAIN FROM ENGAGING IN THE BUSINESS OF SERVICING
 STUDENT LOANS IN THE STATE. IF, WITHIN THIRTY DAYS  AFTER  AN  ORDER  IS
 SERVED,  A  REQUEST FOR A HEARING IS FILED IN WRITING AND THE HEARING IS
 NOT HELD WITHIN SIXTY DAYS OF THE FILING, THE ORDER SHALL BE RESCINDED.
   2. THIS SECTION SHALL NOT APPLY TO EXEMPT ORGANIZATIONS.
   § 721. RESPONSIBILITIES. 1.  IF  A  STUDENT  LOAN  SERVICER  REGULARLY
 REPORTS  INFORMATION  TO A CONSUMER REPORTING AGENCY, THE SERVICER SHALL
 ACCURATELY REPORT A BORROWER'S  PAYMENT  PERFORMANCE  TO  AT  LEAST  ONE
 CONSUMER REPORTING AGENCY THAT COMPILES AND MAINTAINS FILES ON CONSUMERS
 ON  A  NATIONWIDE BASIS AS DEFINED IN SECTION 603(P) OF THE FEDERAL FAIR
 CREDIT REPORTING ACT (15 U.S.C. SEC. 1681A(P)),  UPON  ACCEPTANCE  AS  A
 DATA FURNISHER BY THAT CONSUMER REPORTING AGENCY.
   2. (A) EXCEPT AS PROVIDED IN FEDERAL LAW OR REQUIRED BY A STUDENT LOAN
 AGREEMENT,  A  STUDENT  LOAN SERVICER SHALL INQUIRE OF A BORROWER HOW TO
 APPLY A BORROWER'S NONCONFORMING PAYMENT. A BORROWER'S DIRECTION ON  HOW
 TO  APPLY  A NONCONFORMING PAYMENT SHALL REMAIN IN EFFECT FOR ANY FUTURE
 NONCONFORMING PAYMENT DURING THE  TERM  OF  A  STUDENT  LOAN  UNTIL  THE
 BORROWER PROVIDES DIFFERENT DIRECTIONS.
   (B)  FOR  PURPOSES  OF THIS SUBDIVISION, "NONCONFORMING PAYMENT" SHALL
 MEAN A PAYMENT THAT IS EITHER MORE OR LESS THAN THE BORROWER'S  REQUIRED
 STUDENT LOAN PAYMENT.
   3.  (A) IF THE SALE, ASSIGNMENT, OR OTHER TRANSFER OF THE SERVICING OF
 A STUDENT LOAN RESULTS IN A CHANGE IN THE IDENTITY OF THE PERSON TO WHOM
 THE BORROWER IS REQUIRED TO  SEND  SUBSEQUENT  PAYMENTS  OR  DIRECT  ANY

 A. 7582                             8
 
 COMMUNICATIONS  CONCERNING  THE  STUDENT  LOAN,  A STUDENT LOAN SERVICER
 SHALL TRANSFER  ALL  INFORMATION  REGARDING  A  BORROWER,  A  BORROWER'S
 ACCOUNT, AND A BORROWER'S STUDENT LOAN, INCLUDING BUT NOT LIMITED TO THE
 BORROWER'S  REPAYMENT  STATUS  AND ANY BORROWER BENEFITS ASSOCIATED WITH
 THE BORROWER'S STUDENT LOAN, TO THE NEW STUDENT LOAN SERVICER  SERVICING
 THE BORROWER'S STUDENT LOAN WITHIN FORTY-FIVE DAYS.
   (B)  A  STUDENT  LOAN  SERVICER SHALL ADOPT POLICIES AND PROCEDURES TO
 VERIFY THAT IT HAS RECEIVED ALL  INFORMATION  REGARDING  A  BORROWER,  A
 BORROWER'S  ACCOUNT,  AND  A  BORROWER'S STUDENT LOAN, INCLUDING BUT NOT
 LIMITED TO THE BORROWER'S REPAYMENT STATUS  AND  ANY  BORROWER  BENEFITS
 ASSOCIATED  WITH  THE BORROWER'S STUDENT LOAN, WHEN THE SERVICER OBTAINS
 THE RIGHT TO SERVICE A STUDENT LOAN.
   4. IF A STUDENT LOAN SERVICER SELLS, ASSIGNS, OR  OTHERWISE  TRANSFERS
 THE  SERVICING OF A STUDENT LOAN TO A NEW SERVICER, THE SALE, ASSIGNMENT
 OR OTHER TRANSFER SHALL BE COMPLETED AT  LEAST  SEVEN  DAYS  BEFORE  THE
 BORROWER'S NEXT PAYMENT IS DUE.
   5.  (A)  A  STUDENT  LOAN  SERVICER  THAT SELLS, ASSIGNS, OR OTHERWISE
 TRANSFERS THE SERVICING OF A STUDENT LOAN SHALL REQUIRE AS  A  CONDITION
 OF  SUCH  SALE,  ASSIGNMENT  OR OTHER TRANSFER THAT THE NEW STUDENT LOAN
 SERVICER SHALL HONOR ALL BORROWER  BENEFITS  ORIGINALLY  REPRESENTED  AS
 BEING  AVAILABLE  TO A BORROWER DURING THE REPAYMENT OF THE STUDENT LOAN
 AND THE POSSIBILITY OF SUCH BENEFITS, INCLUDING ANY BENEFITS  THAT  WERE
 REPRESENTED  AS  BEING  AVAILABLE BUT FOR WHICH THE BORROWER HAD NOT YET
 QUALIFIED.
   (B) A STUDENT LOAN SERVICER  THAT  OBTAINS  THE  RIGHT  TO  SERVICE  A
 STUDENT LOAN SHALL HONOR ALL BORROWER BENEFITS ORIGINALLY REPRESENTED AS
 BEING  AVAILABLE  TO A BORROWER DURING THE REPAYMENT OF THE STUDENT LOAN
 AND THE POSSIBILITY OF SUCH BENEFITS, INCLUDING ANY BENEFITS  THAT  WERE
 REPRESENTED  AS  BEING  AVAILABLE BUT FOR WHICH THE BORROWER HAD NOT YET
 QUALIFIED.
   6. A STUDENT LOAN SERVICER SHALL  RESPOND  WITHIN  THIRTY  DAYS  AFTER
 RECEIPT  TO A WRITTEN INQUIRY FROM A BORROWER OR A BORROWER'S AUTHORIZED
 REPRESENTATIVE.
   7. A STUDENT LOAN SERVICER SHALL PRESERVE RECORDS OF EACH STUDENT LOAN
 AND ALL COMMUNICATIONS WITH  BORROWERS  FOR  NOT  LESS  THAN  TWO  YEARS
 FOLLOWING THE FINAL PAYMENT ON A STUDENT LOAN OR THE SALE, ASSIGNMENT OR
 OTHER  TRANSFER  OF  THE  SERVICING  OF A STUDENT LOAN, WHICHEVER OCCURS
 FIRST, OR SUCH LONGER PERIOD AS MAY BE REQUIRED BY ANY  OTHER  PROVISION
 OF LAW.
   §  722.  EXAMINATIONS.  1.  THE SUPERINTENDENT MAY AT ANY TIME, AND AS
 OFTEN AS HE OR SHE MAY DETERMINE, EITHER PERSONALLY OR BY A PERSON  DULY
 DESIGNATED  BY  THE SUPERINTENDENT, INVESTIGATE THE BUSINESS AND EXAMINE
 THE BOOKS, ACCOUNTS, RECORDS, AND FILES USED THEREIN  OF  EVERY  STUDENT
 LOAN  SERVICER.  FOR THAT PURPOSE THE SUPERINTENDENT AND HIS OR HER DULY
 DESIGNATED REPRESENTATIVE SHALL HAVE FREE  ACCESS  TO  THE  OFFICES  AND
 PLACES  OF  BUSINESS, BOOKS, ACCOUNTS, PAPERS, RECORDS, FILES, SAFES AND
 VAULTS OF ALL STUDENT LOAN SERVICERS. THE SUPERINTENDENT AND ANY  PERSON
 DULY  DESIGNATED  BY  HIM OR HER SHALL HAVE THE AUTHORITY TO REQUIRE THE
 ATTENDANCE OF AND TO EXAMINE UNDER OATH ALL PERSONS WHOSE  TESTIMONY  HE
 OR SHE MAY REQUIRE RELATIVE TO SUCH BUSINESS.
   2.  NO  PERSON  SUBJECT  TO  INVESTIGATION  OR  EXAMINATION UNDER THIS
 SECTION MAY KNOWINGLY WITHHOLD, ABSTRACT, REMOVE, MUTILATE,  DESTROY  OR
 SECRETE ANY BOOKS, RECORDS, COMPUTER RECORDS OR OTHER INFORMATION.
   3.  THE  EXPENSES  INCURRED IN MAKING ANY EXAMINATION PURSUANT TO THIS
 SECTION SHALL BE ASSESSED AGAINST AND PAID BY THE STUDENT LOAN  SERVICER
 SO  EXAMINED, EXCEPT THAT TRAVELING AND SUBSISTENCE EXPENSES SO INCURRED

 A. 7582                             9
 
 SHALL BE CHARGED AGAINST AND PAID BY SERVICERS IN  SUCH  PROPORTIONS  AS
 THE  SUPERINTENDENT  SHALL  DEEM  JUST  AND REASONABLE, AND SUCH PROPOR-
 TIONATE CHARGES SHALL BE ADDED TO THE ASSESSMENT OF THE  OTHER  EXPENSES
 INCURRED  UPON  EACH EXAMINATION. UPON WRITTEN NOTICE BY THE SUPERINTEN-
 DENT OF THE TOTAL AMOUNT OF SUCH ASSESSMENT, THE SERVICER  SHALL  BECOME
 LIABLE FOR AND SHALL PAY SUCH ASSESSMENT TO THE SUPERINTENDENT.
   4. IN ANY HEARING IN WHICH A DEPARTMENT EMPLOYEE ACTING UNDER AUTHORI-
 TY  OF  THIS  CHAPTER  IS  AVAILABLE FOR CROSS-EXAMINATION, ANY OFFICIAL
 WRITTEN REPORT, WORKSHEET, OTHER RELATED PAPERS, OR DULY CERTIFIED  COPY
 THEREOF,  COMPILED, PREPARED, DRAFTED, OR OTHERWISE MADE BY SUCH DEPART-
 MENT EMPLOYEE, AFTER BEING DULY AUTHENTICATED BY THE  EMPLOYEE,  MAY  BE
 ADMITTED  AS  COMPETENT EVIDENCE UPON THE OATH OF THE EMPLOYEE THAT SUCH
 WORKSHEET,  INVESTIGATIVE  REPORT,  OR  OTHER  RELATED  DOCUMENTS   WERE
 PREPARED  AS  A  RESULT  OF AN EXAMINATION OF THE BOOKS AND RECORDS OF A
 SERVICER OR OTHER PERSON, CONDUCTED PURSUANT TO THE  AUTHORITY  OF  THIS
 CHAPTER.
   5.  UNLESS  OTHERWISE  EXEMPT  PURSUANT  TO SUBDIVISION TWO OF SECTION
 SEVEN HUNDRED ELEVEN OF THIS  ARTICLE,  AFFILIATES  OF  A  STUDENT  LOAN
 SERVICER  SHALL  BE  SUBJECT TO EXAMINATION BY THE SUPERINTENDENT ON THE
 SAME TERMS AS THE SERVICER, BUT ONLY WHEN REPORTS FROM,  OR  EXAMINATION
 OF, A SERVICER PROVIDES EVIDENCE OF UNLAWFUL ACTIVITY BETWEEN A SERVICER
 AND  AFFILIATE  BENEFITTING,  AFFECTING,  OR ARISING FROM THE ACTIVITIES
 REGULATED BY THIS ARTICLE.
   § 723. PENALTIES FOR VIOLATION OF THIS ARTICLE. 1. IN ADDITION TO SUCH
 PENALTIES AS MAY OTHERWISE BE APPLICABLE BY LAW, THE SUPERINTENDENT MAY,
 AFTER NOTICE  AND  HEARING,  REQUIRE  ANY  PERSON  FOUND  VIOLATING  THE
 PROVISIONS OF THIS ARTICLE OR THE RULES OR REGULATIONS PROMULGATED HERE-
 UNDER TO PAY TO THE PEOPLE OF THIS STATE A PENALTY FOR EACH VIOLATION OF
 THIS ARTICLE OR ANY REGULATION OR POLICY PROMULGATED HEREUNDER A SUM NOT
 TO EXCEED AN AMOUNT AS DETERMINED PURSUANT TO SECTION FORTY-FOUR OF THIS
 CHAPTER FOR EACH SUCH VIOLATION.
   2.  NOTHING  IN  THIS  ARTICLE SHALL LIMIT ANY STATUTORY OR COMMON-LAW
 RIGHT OF ANY PERSON TO BRING ANY ACTION IN ANY COURT FOR ANY ACT, OR THE
 RIGHT OF THE STATE TO PUNISH ANY PERSON FOR ANY VIOLATION OF ANY LAW.
   § 724. SEVERABILITY OF PROVISIONS. IF ANY PROVISION OF  THIS  ARTICLE,
 OR  THE  APPLICATION  OF  SUCH  PROVISION TO ANY PERSON OR CIRCUMSTANCE,
 SHALL BE HELD INVALID, ILLEGAL OR UNENFORCEABLE, THE  REMAINDER  OF  THE
 ARTICLE,  AND  THE  APPLICATION  OF SUCH PROVISION TO PERSONS OR CIRCUM-
 STANCES OTHER THAN THOSE AS TO WHICH IT  IS  HELD  INVALID,  ILLEGAL  OR
 UNENFORCEABLE, SHALL NOT BE AFFECTED THEREBY.
   §  725.  COMPLIANCE  WITH  OTHER LAWS. 1. STUDENT LOAN SERVICERS SHALL
 ENGAGE IN THE BUSINESS OF SERVICING STUDENT LOANS IN CONFORMITY WITH THE
 PROVISIONS OF THIS CHAPTER, SUCH RULES AND REGULATIONS AS MAY BE PROMUL-
 GATED BY THE SUPERINTENDENT THEREUNDER AND ALL APPLICABLE  FEDERAL  LAWS
 AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER.
   2.  NOTHING  IN THIS SECTION SHALL BE CONSTRUED TO LIMIT ANY OTHERWISE
 APPLICABLE STATE OR FEDERAL LAW OR REGULATIONS.
   § 2. Subdivision 10 of section 36 of the banking law,  as  amended  by
 chapter 182 of the laws of 2011, is amended to read as follows:
   10. All reports of examinations and investigations, correspondence and
 memoranda  concerning  or  arising  out of such examination and investi-
 gations, including any duly authenticated copy or copies thereof in  the
 possession  of  any  banking  organization,  bank holding company or any
 subsidiary thereof (as such terms "bank holding  company"  and  "subsid-
 iary"  are  defined in article three-A of this chapter), any corporation
 or any other entity affiliated with a banking  organization  within  the

 A. 7582                            10
 
 meaning  of  subdivision six of this section and any non-banking subsid-
 iary of a corporation or any other entity which is  an  affiliate  of  a
 banking  organization  within  the  meaning of subdivision six-a of this
 section,  foreign  banking corporation, licensed lender, licensed casher
 of  checks,  licensed  mortgage  banker,  registered  mortgage   broker,
 licensed  mortgage  loan  originator,  licensed  sales  finance company,
 registered mortgage  loan  servicer,  LICENSED  STUDENT  LOAN  SERVICER,
 licensed  insurance  premium  finance  agency,  licensed  transmitter of
 money, licensed budget planner, any other person or  entity  subject  to
 supervision under this chapter, or the department, shall be confidential
 communications,  shall  not be subject to subpoena and shall not be made
 public unless, in the  judgment  of  the  superintendent,  the  ends  of
 justice  and  the  public advantage will be subserved by the publication
 thereof, in which event the superintendent may publish or authorize  the
 publication  of  a  copy  of any such report or any part thereof in such
 manner as may be deemed proper or unless such laws specifically  author-
 ize  such  disclosure. For the purposes of this subdivision, "reports of
 examinations and investigations, and any  correspondence  and  memoranda
 concerning  or  arising  out  of  such examinations and investigations",
 includes any such materials of a bank, insurance or securities regulato-
 ry agency or any unit of the federal government or that  of  this  state
 any  other  state or that of any foreign government which are considered
 confidential by such agency or unit and which are in the  possession  of
 the  department  or which are otherwise confidential materials that have
 been shared by the department with any such agency or unit  and  are  in
 the possession of such agency or unit.
   §  3.  Subdivisions  1,  2,  3 and 5 of section 39 of the banking law,
 subdivisions 1, 2 and 5 as amended by chapter 123 of the  laws  of  2009
 and  subdivision  3  as  amended by chapter 155 of the laws of 2012, are
 amended to read as follows:
   1. To appear and explain an  apparent  violation.  Whenever  it  shall
 appear to the superintendent that any banking organization, bank holding
 company,  registered mortgage broker, licensed mortgage banker, LICENSED
 STUDENT LOAN SERVICER, registered mortgage loan servicer, licensed mort-
 gage loan  originator,  licensed  lender,  licensed  casher  of  checks,
 licensed sales finance company, licensed insurance premium finance agen-
 cy, licensed transmitter of money, licensed budget planner, out-of-state
 state  bank  that  maintains  a  branch or branches or representative or
 other offices in this state, or foreign banking corporation licensed  by
 the superintendent to do business or maintain a representative office in
 this  state has violated any law or regulation, he or she may, in his or
 her discretion, issue an order describing such  apparent  violation  and
 requiring  such  banking  organization, bank holding company, registered
 mortgage broker, licensed mortgage banker, LICENSED STUDENT LOAN  SERVI-
 CER, licensed mortgage loan originator, licensed lender, licensed casher
 of  checks,  licensed  sales finance company, licensed insurance premium
 finance agency, licensed transmitter of money, licensed budget  planner,
 out-of-state state bank that maintains a branch or branches or represen-
 tative or other offices in this state, or foreign banking corporation to
 appear  before  him  or her, at a time and place fixed in said order, to
 present an explanation of such apparent violation.
   2. To discontinue unauthorized or unsafe and unsound practices.  When-
 ever  it  shall  appear to the superintendent that any banking organiza-
 tion, bank holding company, registered mortgage broker,  licensed  mort-
 gage  banker,  LICENSED  STUDENT LOAN SERVICER, registered mortgage loan
 servicer, licensed mortgage loan originator, licensed  lender,  licensed

 A. 7582                            11
 
 casher  of  checks,  licensed  sales finance company, licensed insurance
 premium finance agency, licensed transmitter of money,  licensed  budget
 planner,  out-of-state state bank that maintains a branch or branches or
 representative or other offices in this state, or foreign banking corpo-
 ration  licensed  by  the superintendent to do business in this state is
 conducting business in an unauthorized or unsafe and unsound manner,  he
 or  she  may,  in  his  or  her discretion, issue an order directing the
 discontinuance of such unauthorized or unsafe and unsound practices, and
 fixing a time and place at which such banking organization, bank holding
 company, registered mortgage broker, licensed mortgage banker,  LICENSED
 STUDENT LOAN SERVICER, registered mortgage loan servicer, licensed mort-
 gage  loan  originator,  licensed  lender,  licensed  casher  of checks,
 licensed sales finance company, licensed insurance premium finance agen-
 cy, licensed transmitter of money, licensed budget planner, out-of-state
 state bank that maintains a branch  or  branches  or  representative  or
 other  offices  in this state, or foreign banking corporation may volun-
 tarily appear before him or her to present any explanation in defense of
 the practices directed in said order to be discontinued.
   3. To make good impairment of capital or  to  ensure  compliance  with
 financial  requirements.  Whenever it shall appear to the superintendent
 that the capital or capital stock  of  any  banking  organization,  bank
 holding  company  or any subsidiary thereof which is organized, licensed
 or registered pursuant to this chapter, is impaired,  or  the  financial
 requirements  imposed by subdivision one of section two hundred two-b of
 this chapter or any regulation of the superintendent on  any  branch  or
 agency  of  a  foreign banking corporation or the financial requirements
 imposed by this chapter or any regulation of the superintendent  on  any
 licensed  lender,  registered mortgage broker, licensed mortgage banker,
 LICENSED STUDENT LOAN SERVICER,  licensed  casher  of  checks,  licensed
 sales  finance  company,  licensed  insurance  premium  finance  agency,
 licensed transmitter of money, licensed budget planner or private banker
 are not satisfied,  the  superintendent  may,  in  the  superintendent's
 discretion,  issue  an  order  directing that such banking organization,
 bank holding company, branch or agency of a foreign banking corporation,
 registered mortgage broker, licensed mortgage banker,  LICENSED  STUDENT
 LOAN  SERVICER,  licensed  lender,  licensed  casher of checks, licensed
 sales  finance  company,  licensed  insurance  premium  finance  agency,
 licensed transmitter of money, licensed budget planner, or private bank-
 er  make  good  such  deficiency forthwith or within a time specified in
 such order.
   5. To keep books and accounts as prescribed. Whenever it shall  appear
 to the superintendent that any banking organization, bank holding compa-
 ny,  registered  mortgage  broker,  licensed  mortgage  banker, LICENSED
 STUDENT LOAN SERVICER, registered mortgage loan servicer, licensed mort-
 gage loan  originator,  licensed  lender,  licensed  casher  of  checks,
 licensed sales finance company, licensed insurance premium finance agen-
 cy,  licensed  transmitter  of money, licensed budget planner, agency or
 branch of a foreign banking corporation licensed by  the  superintendent
 to  do  business  in this state, does not keep its books and accounts in
 such manner as to enable him or her to readily ascertain its true condi-
 tion, he or she may, in his or her discretion, issue an order  requiring
 such  banking  organization,  bank  holding company, registered mortgage
 broker, licensed mortgage banker, LICENSED STUDENT LOAN SERVICER, regis-
 tered  mortgage  loan  servicer,  licensed  mortgage  loan   originator,
 licensed  lender,  licensed  casher  of  checks,  licensed sales finance
 company, licensed insurance premium finance agency, licensed transmitter

 A. 7582                            12
 
 of money, licensed budget planner, or foreign  banking  corporation,  or
 the  officers  or  agents thereof, or any of them, to open and keep such
 books or accounts as he or she may, in his or her discretion,  determine
 and prescribe for the purpose of keeping accurate and convenient records
 of its transactions and accounts.
   §  4. Paragraph (a) of subdivision 1 of section 44 of the banking law,
 as amended by chapter 155 of the laws of 2012, is  amended  to  read  as
 follows:
   (a) Without limiting any power granted to the superintendent under any
 other provision of this chapter, the superintendent may, in a proceeding
 after  notice  and a hearing, require any safe deposit company, licensed
 lender, licensed casher  of  checks,  licensed  sales  finance  company,
 licensed  insurance  premium  finance  agency,  licensed  transmitter of
 money, licensed mortgage banker, LICENSED STUDENT LOAN SERVICER,  regis-
 tered  mortgage  broker,  licensed  mortgage loan originator, registered
 mortgage loan servicer or licensed budget planner to pay to  the  people
 of  this  state  a  penalty for any violation of this chapter, any regu-
 lation promulgated thereunder,  any  final  or  temporary  order  issued
 pursuant  to  section thirty-nine of this article, any condition imposed
 in writing by the superintendent in connection with  the  grant  of  any
 application  or  request, or any written agreement entered into with the
 superintendent.
   § 5. This act shall take effect on the one hundred eightieth day after
 it shall have become a law.