Assembly Actions -
Lowercase Senate Actions - UPPERCASE |
|
---|---|
Dec 22, 2023 |
vetoed memo.137 |
Dec 12, 2023 |
delivered to governor |
Jun 21, 2023 |
returned to senate passed assembly ordered to third reading rules cal.867 substituted for a5286a |
Jun 08, 2023 |
referred to ways and means returned to assembly repassed senate |
Jun 05, 2023 |
amended on third reading 5056a |
Jun 05, 2023 |
vote reconsidered - restored to third reading returned to senate recalled from assembly |
May 30, 2023 |
referred to banks delivered to assembly passed senate |
May 22, 2023 |
ordered to third reading cal.1098 committee discharged and committed to rules |
May 16, 2023 |
reported and committed to finance |
Feb 22, 2023 |
referred to banks |
Senate Bill S5056
Vetoed By Governor2023-2024 Legislative Session
Relates to creating a private education debt registry
download bill text pdfSponsored By
(D) 6th Senate District
Current Bill Status - Vetoed by Governor
- Introduced
-
- In Committee Assembly
- In Committee Senate
-
- On Floor Calendar Assembly
- On Floor Calendar Senate
-
- Passed Assembly
- Passed Senate
- Vetoed By Governor
- Signed By Governor
Actions
Votes
-
-
-
-
Floor Vote: Jun 8, 2023
aye (49)- Addabbo Jr.
- Ashby
- Bailey
- Breslin
- Brisport
- Brouk
- Canzoneri-Fitzpatrick
- Chu
- Cleare
- Comrie
- Felder
- Fernandez
- Gianaris
- Gonzalez
- Gounardes
- Harckham
- Hinchey
- Hoylman-Sigal
- Jackson
- Kavanagh
- Kennedy
- Krueger
- Lanza
- Liu
- Mannion
- Martinez
- Martins
- Mattera
- May
- Mayer
- Murray
- Myrie
- O'Mara
- Parker
- Persaud
- Ramos
- Rhoads
- Rivera
- Ryan
- Salazar
- Sanders Jr.
- Scarcella-Spanton
- Sepúlveda
- Serrano
- Skoufis
- Stavisky
- Stewart-Cousins
- Thomas
- Webb
nay (13)excused (1)
-
-
-
Floor Vote: May 30, 2023
aye (44)- Addabbo Jr.
- Ashby
- Bailey
- Breslin
- Brisport
- Brouk
- Chu
- Cleare
- Comrie
- Felder
- Fernandez
- Gianaris
- Gonzalez
- Gounardes
- Harckham
- Hinchey
- Hoylman-Sigal
- Jackson
- Kavanagh
- Kennedy
- Krueger
- Lanza
- Liu
- Mannion
- Martinez
- Martins
- May
- Mayer
- Myrie
- Parker
- Persaud
- Ramos
- Rivera
- Ryan
- Salazar
- Sanders Jr.
- Scarcella-Spanton
- Sepúlveda
- Serrano
- Skoufis
- Stavisky
- Stewart-Cousins
- Thomas
- Webb
nay (17)
-
May 22, 2023 - Rules Committee Vote
S505614Aye4Nay3Aye with Reservations0Absent0Excused0Abstained -
-
Bill Amendments
2023-S5056 - Details
- Law Section:
- Financial Services Law
- Laws Affected:
- Add Art 9 §§901 - 905, Fin Serv L
2023-S5056 - Summary
Directs the superintendent of financial services to create a private education debt registry which shall contain information and documentation relating to loans issued by creditors including interest rates and copies of the notes and instruments used by such creditors for education loans.
2023-S5056 - Sponsor Memo
BILL NUMBER: S5056 SPONSOR: THOMAS TITLE OF BILL: An act to amend the financial services law, in relation to creating a private education debt registry PURPOSE GENERAL IDEA OF BILL: The purpose of the bill is to give financial policymakers and consumers a full and accurate view of the state of student debt in New York through the creation of a private education debt registry. SUMMARY OF PROVISIONS: Section 1 of the bill amends the financial services law by adding a new Article 9 to create the "private education debt registry." This article requires all private education creditors operating in New York State that are not already licensed or chartered by the Department of Finan- cial Services (DFS) for their private education debt business to regis- ter with the DFS, and requires all private education creditors to annu-
ally submit information on their private education debt activity, regardless of debt's principal amount or interest rate. Private educa- tion creditors are defined as including any person that originates student loan debt or to which such a debt is owed, as well as to include non-loan debt. The annual information that private education creditor's must disclose to DFS varies based on the type of creditor and includes: a list of schools at which the private education creditor has provided a private education debt to a consumer residing in the state, the total dollar amount and number of private education debt made, both overall and during the prior fiscal year, to consumers residing in the state and made annually at each school, the range of interest rates and percentage of applicants who receive those rates, the general default rate, the default rate due to non-payment or due to other reasons, the total dollar amount and number of private education debts made annually with a cosigner, the total dollar amount and number of private education debts that were used to refinance other private education debts, the total dollar amount and number of private education debts for which the credi- tor sued to collect, and a copy of the promissory notes and other agree- ments used to issue private education debts. The bill provides for modi- fied reporting requirements relating to private education debts that do not arise from credit transactions. DFS must publish a summary of the information received from private education creditors on their website along with the name, address, telephone number and website for all private education creditors. DFS is authorized to promulgate rules and regulations. A violation of this article done knowingly may result in a civil penalty up to $10,000 for each violation or being barred from acting as a private education creditor for up to ten years. Section 2 of the bill contains the effective date. JUSTIFICATION: In New York, consumer lenders are not required to be licensed unless the loan is both smaller than $25,000 and at a rate above 16 percent.1 Even subprime loans generally have interest rates below 16 percent. As a result, private education creditors who do not meet licensing require- ments operate below the Department of Financial Services' radar. This makes information related to private education debts originated to New Yorker borrowers at rates below 16 percent scarce. Additionally, private education creditors that are regulated by DFS are not required to specifically report on their education debt portfolios. Further, there is increasing national scrutiny of school-based debt collection and the role of institutions of higher education as creditors. The federal Consumer Financial Protection Bureau began to examine school-based lend- ing in 2022, and determined that transcript withholding as a means of collecting these debts is "abusive" in violation of federal consumer protection law. New York State in 2022 prohibited the practice of tran- script withholding at all schools in the state, which serves as a debt collection tactic for school-based education debt, but has not taken any additional steps to study or regulate these debts themselves. Whereas federal student loan terms are set by federal law, and whereas data about the federal student loan market are regularly published by the federal government, the lack of consistently available data related to private education debt and the variety of persons that act as private education creditors means that we do not know the full size of the market, trends in origination, terms and conditions of debts, differ- ences in finance costs across demographic groups, default rates, rates of cosigning, prevalence of private student debt and repayment outcomes among older consumers, or outcomes related to student loan servicing. Any data that are available are extrapolations. To address this lack of data, Colorado, Maine, California, Louisiana, and Illinois require private education creditors to annually submit data to financial regulators. New York should do the same. This bill does not require any changes to the business practices of private education creditors, other than require them to share data with the State. PRIOR LEGISLATIVE HISTORY: New bill. FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: To be determined. EFFECTIVE DATE: This act shall take effect. 1 New York Bank Law 340
2023-S5056 - Bill Text download pdf
S T A T E O F N E W Y O R K ________________________________________________________________________ 5056 2023-2024 Regular Sessions I N S E N A T E February 22, 2023 ___________ Introduced by Sen. THOMAS -- read twice and ordered printed, and when printed to be committed to the Committee on Banks AN ACT to amend the financial services law, in relation to creating a private education debt registry THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The financial services law is amended by adding a new arti- cle 9 to read as follows: ARTICLE 9 PRIVATE EDUCATION DEBT REGISTRY SECTION 901. DEFINITIONS. 902. PRIVATE EDUCATION DEBT REGISTRY. 903. RULES AND REGULATIONS. 904. VIOLATIONS. 905. SEVERABILITY. § 901. DEFINITIONS. AS USED IN THIS ARTICLE: 1. "FISCAL YEAR" MEANS THE TWELVE-MONTH PERIOD THAT THE PRIVATE EDUCA- TION CREDITOR USES FOR FINANCIAL REPORTING AND BUDGETING. 2. "HIGHER EDUCATION" MEANS HIGHER EDUCATION, INCLUDING CAREER EDUCA- TION, AS THOSE TERMS ARE DEFINED IN SECTION TWO OF THE EDUCATION LAW, VIA CORRESPONDENCE, ONLINE, OR IN PERSON, REGARDLESS OF WHETHER THE HIGHER EDUCATION INSTITUTION IS ACCREDITED WITHIN NEW YORK STATE. 3. "HIGHER EDUCATION EXPENSE" MEANS ANY EXPENSE ARISING FROM HIGHER EDUCATION. 4. "PRIVATE EDUCATION CREDITOR" MEANS ANY PERSON ENGAGED IN THE BUSI- NESS OF SECURING, MAKING, OR EXTENDING A PRIVATE EDUCATION DEBT, OR ANY HOLDER OF A PRIVATE EDUCATION DEBT, INCLUDING PROVIDERS OF HIGHER EDUCA- TION TO WHICH A STUDENT EDUCATION DEBT IS OWED. "PRIVATE EDUCATION CRED- ITOR" SHALL NOT INCLUDE THE FOLLOWING PERSONS, ONLY TO THE EXTENT THAT STATE REGULATION IS PREEMPTED BY FEDERAL LAW: EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08128-02-3 S. 5056 2
(A) ANY FEDERALLY CHARTERED BANK, SAVINGS BANK, SAVINGS AND LOAN ASSO- CIATION, OR CREDIT UNION; (B) ANY BANK, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, OR CREDIT UNION ORGANIZED UNDER THE LAWS OF THIS OR ANY OTHER STATE; (C) ANY WHOLLY OWNED SUBSIDIARY OF A FEDERALLY CHARTERED BANK OR CRED- IT UNION; AND (D) ANY OPERATING SUBSIDIARY WHERE EACH OWNER OF THE OPERATING SUBSID- IARY IS WHOLLY OWNED BY THE SAME FEDERALLY CHARTERED BANK OR CREDIT UNION. 5. "PRIVATE EDUCATION DEBT" MEANS AN EXTENSION OF CREDIT OR DEBT OR OBLIGATION OWED OR INCURRED BY A CONSUMER, CONTRACTUAL OR OTHERWISE, CONTINGENT OR ABSOLUTE, THAT MEETS ALL OF THE FOLLOWING CRITERIA: (A) IS NOT MADE, INSURED, OR GUARANTEED UNDER TITLE IV OF THE HIGHER EDUCATION ACT OF 1965 (20 U.S.C. S.1070 ET SEQ.); (B) IS EXTENDED TO A CONSUMER EXPRESSLY, IN WHOLE OR IN PART, FOR, OR ACCRUES FROM NONPAYMENT OF, HIGHER EDUCATION EXPENSES, REGARDLESS OF WHETHER THE CREDIT OR DEBT OR OBLIGATION IS OWED TO THE PROVIDER OF HIGHER EDUCATION THAT THE STUDENT ATTENDS; AND (C) SHALL NOT INCLUDE ANY LOAN THAT IS SECURED BY REAL PROPERTY OR A DWELLING. "PRIVATE EDUCATION DEBT" SHALL INCLUDE EXTENSIONS OF CREDIT OR DEBT OR OBLIGATIONS OWED OR INCURRED TO REFINANCE A PRIVATE EDUCATION DEBT. 6. "PROVIDER OF HIGHER EDUCATION" OR "SCHOOL" MEANS A PERSON ENGAGED IN THE BUSINESS OF HIGHER EDUCATION. FOR THE PURPOSES OF THIS DEFI- NITION, A PERSON NEED NOT HAVE OBTAINED AUTHORIZATION FROM THE DEPART- MENT OF EDUCATION TO OPERATE IN THIS STATE AND NEED NOT BE AN ACCREDITED INSTITUTION. § 902. PRIVATE EDUCATION DEBT REGISTRY. 1. BEGINNING ON OR AFTER THE ONE HUNDRED EIGHTIETH DAY AFTER THE EFFECTIVE DATE OF THIS ARTICLE, NO PERSON SHALL ENGAGE IN BUSINESS AS A PRIVATE EDUCATION CREDITOR IN THIS STATE WITHOUT FIRST SATISFYING THE FOLLOWING REQUIREMENTS SET FORTH IN SUBDIVISIONS TWO AND THREE OF THIS SECTION. 2. (A) A PRIVATE EDUCATION CREDITOR OPERATING IN THIS STATE SHALL REGISTER WITH THE SUPERINTENDENT PURSUANT TO ANY REGISTRATION PROCEDURES SET FORTH BY THE SUPERINTENDENT BY RULE OR REGULATION, WHICH MAY INCLUDE REGISTRATION THROUGH THE NATIONWIDE MULTISTATE LICENSING SYSTEM AND REGISTRY, AND SHALL PAY A FEE SET BY THE SUPERINTENDENT. THE SUPERINTEN- DENT MAY PRESCRIBE AN ALTERNATIVE REGISTRATION PROCESS AND FEE STRUCTURE FOR A PROVIDER OF HIGHER EDUCATION. REGISTRATION SHALL INCLUDE, AT A MINIMUM, THE NAME AND ADDRESS OF THE PRIVATE EDUCATION CREDITOR AND ANY OFFICER, DIRECTOR, PARTNER, OR OWNER OF A CONTROLLING INTEREST OF THE PRIVATE EDUCATION CREDITOR. A PRIVATE EDUCATION CREDITOR SHALL ANNUALLY RENEW ITS REGISTRATION AND PAY A RENEWAL FEE PURSUANT TO A PROCEDURE AND ON OR BEFORE A DATE TO BE DETERMINED BY THE SUPERINTENDENT. (B) THIS SUBDIVISION SHALL NOT APPLY TO REGULATED PERSONS, AS SUCH TERM IS DEFINED IN SECTION ONE HUNDRED FOUR OF THIS CHAPTER, ENGAGED IN BUSINESS AS A PRIVATE EDUCATION CREDITOR IN THIS STATE, TO THE EXTENT SUCH REGULATION RELATES TO ITS BUSINESS AS A PRIVATE EDUCATION CREDITOR AND SUCH PERSONS ARE REQUIRED TO FURNISH DATA OR REPORTS ANNUALLY TO THE SUPERINTENDENT. 3. A PRIVATE EDUCATION CREDITOR OPERATING IN THIS STATE SHALL ANNUAL- LY, ON OR BEFORE A DATE TO BE DETERMINED BY THE SUPERINTENDENT AND NOT TO EXCEED SIX MONTHS FOLLOWING THE EFFECTIVE DATE OF THIS ARTICLE, PROVIDE THE SUPERINTENDENT WITH THE FOLLOWING DOCUMENTS AND INFORMATION ABOUT SUCH CREDITOR'S PRIVATE EDUCATION DEBT PORTFOLIO RELATED TO CONSUMERS THAT RESIDE IN THIS STATE PURSUANT TO ANY PROCEDURE SET FORTH S. 5056 3 BY THE SUPERINTENDENT, WHICH MAY INCLUDE REPORTING THROUGH THE NATION- WIDE MULTISTATE LICENSING SYSTEM AND REGISTRY, AND WHICH MAY FURTHER INCLUDE DIFFERENT PROCEDURES FOR REGULATED PERSONS, AS THAT TERM IS DEFINED IN SECTION ONE HUNDRED FOUR OF THIS CHAPTER, AND NON-REGULATED PERSONS: (A) FOR PRIVATE EDUCATION CREDITORS THAT SECURE, MAKE, OR EXTEND PRIVATE EDUCATION DEBTS, OTHER THAN THOSE PRIVATE EDUCATION DEBTS REPORTED PURSUANT TO PARAGRAPH (C) OF THIS SUBDIVISION, RELATING TO SUCH DEBTS OWED BY A CONSUMER RESIDING IN THIS STATE AS OF THE END OF THE PRIOR FISCAL YEAR: (I) A LIST OF ALL SCHOOLS FOR WHICH SUCH PRIVATE EDUCATION DEBTS WERE USED TO FINANCE HIGHER EDUCATION, INCLUDING, IN THE CASE OF A REFINANC- ING LOAN, THE SCHOOL THAT THE CONSUMER ATTENDED USING THE PRIVATE EDUCA- TION DEBT THAT WAS REFINANCED; (II) THE TOTAL OUTSTANDING DOLLAR AMOUNT AND NUMBER OF SUCH PRIVATE EDUCATION DEBTS AND THE NUMBER OF CONSUMERS WHO OWE SUCH PRIVATE EDUCA- TION DEBTS; (III) THE TOTAL DOLLAR AMOUNT AND NUMBER OF SUCH PRIVATE EDUCATION DEBTS ASSOCIATED WITH EACH SCHOOL IDENTIFIED UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH; (IV) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS SECURED, MADE, OR EXTENDED IN THE PRIOR FISCAL YEAR; (V) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS SECURED, MADE, OR EXTENDED IN THE PRIOR FISCAL YEAR ASSOCIATED WITH EACH SCHOOL IDENTIFIED UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH; (VI) THE RANGE OF STARTING INTEREST RATES FOR PRIVATE EDUCATION DEBTS SECURED, MADE, OR EXTENDED TO CONSUMERS IN THE PRIOR FISCAL YEAR AND PERCENTAGE OF CONSUMERS WHO RECEIVE THOSE RATES; (VII) THE OVERALL DEFAULT RATE, AS WELL AS THE OVERALL DEFAULT FOR SUCH DEBTS ASSOCIATED WITH EACH SCHOOL LISTED UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH; (VIII) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS THAT DEFAULTED FOR REASONS OTHER THAN NON-PAYMENT IN THE PRIOR FISCAL YEAR, AS APPLICABLE; (IX) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS WITH A COSIGNER, AS APPLICABLE; (X) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS SECURED, MADE, OR EXTENDED WITH A COSIGNER IN THE PRIOR FISCAL YEAR, AS APPLICABLE; (XI) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS SECURED, MADE, OR EXTENDED TO REFINANCE OTHER PRIVATE EDUCATION DEBTS OR FEDERAL STUDENT LOANS, RESPECTIVELY, AS APPLICABLE; (XII) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS SECURED, MADE, OR EXTENDED TO REFINANCE OTHER PRIVATE EDUCATION DEBTS OR FEDERAL STUDENT LOANS, RESPECTIVELY, IN THE PRIOR FISCAL YEAR, AS APPLI- CABLE; (XIII) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS FOR WHICH THE PRIVATE EDUCATION CREDITOR HAS SUED TO COLLECT IN THE PRIOR FISCAL YEAR, AS APPLICABLE; (XIV) ADDITIONAL INFORMATION AS MAY IN THE JUDGMENT OF THE SUPERINTEN- DENT BE NECESSARY AND APPROPRIATE IN ORDER TO ASSESS THE TOTAL SIZE AND STATUS OF THE PRIVATE EDUCATION DEBT MARKET AND TO ASSESS BORROWER WELL- BEING; AND (XV) A COPY OF ANY MODEL PROMISSORY NOTE, AGREEMENT, CONTRACT OR OTHER INSTRUMENT USED BY A PRIVATE EDUCATION CREDITOR DURING THE PREVIOUS FISCAL YEAR TO SUBSTANTIATE THAT A NEW PRIVATE EDUCATION DEBT HAS BEEN S. 5056 4 EXTENDED TO THE CONSUMER OR THAT A CONSUMER OWES A DEBT OR OBLIGATION TO THE PRIVATE EDUCATION CREDITOR. (B) FOR PRIVATE EDUCATION CREDITORS THAT ACQUIRE OR ASSUME PRIVATE EDUCATION DEBTS OWED BY A CONSUMER RESIDING IN THIS STATE, RELATING TO SUCH DEBTS AS OF THE END OF THE PRIOR FISCAL YEAR: (I) A LIST OF ALL SCHOOLS FOR WHICH SUCH PRIVATE EDUCATION DEBTS WERE USED TO FINANCE HIGHER EDUCATION, INCLUDING, IN THE CASE OF A REFINANC- ING LOAN, THE SCHOOL THAT THE CONSUMER ATTENDED USING THE PRIVATE EDUCA- TION DEBT THAT WAS REFINANCED; (II) THE TOTAL OUTSTANDING DOLLAR AMOUNT AND NUMBER OF SUCH PRIVATE EDUCATION DEBTS AND NUMBER OF CONSUMERS WHO OWE SUCH PRIVATE EDUCATION DEBTS; (III) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS ASSOCIATED WITH EACH SCHOOL IDENTIFIED UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH; (IV) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS ACQUIRED OR ASSUMED IN THE PRIOR FISCAL YEAR; (V) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS ACQUIRED OR ASSUMED IN THE PRIOR FISCAL YEAR ASSOCIATED WITH EACH SCHOOL IDENTIFIED UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH; (VI) THE OVERALL DEFAULT RATE, AS WELL AS THE OVERALL DEFAULT FOR SUCH DEBTS ASSOCIATED WITH EACH SCHOOL LISTED UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH; (VII) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS THAT DEFAULTED FOR REASONS OTHER THAN NONPAYMENT IN THE PRIOR FISCAL YEAR, AS APPLICABLE; (VIII) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS WITH A COSIGNER, AS APPLICABLE; (IX) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS THAT WERE USED TO REFINANCE OTHER PRIVATE EDUCATION DEBTS, AS APPLICA- BLE; (X) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS FOR WHICH THE PRIVATE EDUCATION CREDITOR HAS SUED TO COLLECT IN THE PRIOR FISCAL YEAR, AS APPLICABLE; AND (XI) ADDITIONAL INFORMATION AS MAY IN THE JUDGMENT OF THE SUPERINTEN- DENT BE NECESSARY AND APPROPRIATE IN ORDER TO ASSESS THE TOTAL SIZE AND STATUS OF THE PRIVATE EDUCATION DEBT MARKET AND TO ASSESS BORROWER WELL- BEING. (C) FOR PRIVATE EDUCATION CREDITORS THAT ARE PROVIDERS OF HIGHER EDUCATION AND WHOSE PRIVATE EDUCATION DEBTS RESULT FROM UNPAID DEBTS OR OBLIGATIONS THAT WERE NOT EXTENSIONS OF CREDIT AND THAT RESULT FROM HIGHER EDUCATION PROVIDED IN THIS STATE, RELATING TO SUCH DEBTS AS OF THE END OF THE PRIOR FISCAL YEAR, REPORTED BY RACE AND GENDER: (I) THE TOTAL OUTSTANDING DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCA- TION DEBTS AND NUMBER OF CONSUMERS WHO OWE THOSE DEBTS; (II) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS ACCRUED AND NUMBER OF CONSUMERS WHO OWE THOSE DEBTS IN THE PRIOR FISCAL YEAR; (III) THE TOTAL NUMBER AND BALANCE OF STUDENT ACCOUNTS WITH AN ACADEM- IC OR ADMINISTRATIVE HOLD RESULTING FROM A PRIVATE EDUCATION DEBT; (IV) THE TOTAL NUMBER AND BALANCE OF STUDENT ACCOUNTS WITH AN ACADEMIC OR ADMINISTRATIVE HOLD RESULTING FROM A PRIVATE EDUCATION DEBT FOR WHICH A PAYMENT WAS MADE IN THE PRIOR FISCAL YEAR AND AVERAGE PAYMENT MADE; (V) THE TOTAL NUMBER OF STUDENT ACCOUNTS FOR WHICH FEDERAL FINANCIAL AID WAS RETURNED TO THE FEDERAL GOVERNMENT UPON THE STUDENT'S WITHDRAWAL S. 5056 5 FROM THE PROVIDER OF HIGHER EDUCATION IN THE PRIOR FISCAL YEAR, AND THE TOTAL DOLLAR AMOUNT OF ANY PRIVATE EDUCATION DEBT ACCRUED AS A RESULT; (VI) THE NUMBER OF CONSUMERS WHO OWE A PRIVATE EDUCATION DEBT WHO RECEIVED A FEDERAL PELL GRANT AND THE AVERAGE DEBT OWED; (VII) THE NUMBER OF CONSUMERS WHO OWE A PRIVATE EDUCATION DEBT WHO ARE CONSIDERED IN-STATE AND OUT-OF-STATE STUDENTS, AND THE TOTAL DEBT OWED BY EACH GROUP; (VIII) THE TOTAL DOLLAR AMOUNT, NUMBER OF PRIVATE EDUCATION DEBTS, AND NUMBER OF CONSUMERS FOR WHICH THE PRIVATE EDUCATION CREDITOR HAS IN THE PRIOR FISCAL YEAR (A) CHARGED OFF THE DEBT, (B) SENT THE DEBT TO A THIRD PARTY COLLECTION AGENCY, (C) INITIATED A COLLECTION LAWSUIT, (D) REPORTED THE DEBT TO A CONSUMER CREDIT REPORTING AGENCY, AND (E) SOLD THE DEBT; (IX) THE TOTAL DOLLAR AMOUNT, NUMBER OF PRIVATE EDUCATION DEBTS, AND NUMBER OF CONSUMERS FOR WHICH THE PRIVATE EDUCATION CREDITOR HAS, IN THE PRIOR FISCAL YEAR, COLLECTED ON A PRIVATE EDUCATION DEBT IN THE FOLLOW- ING INSTANCES: (A) PAYMENT ARRANGEMENTS WHEREIN THE PAYMENT WAS NOT CONSIDERED PAST DUE, SUCH AS TUITION INSTALLMENT AGREEMENTS; (B) PAYMENTS MADE ON PAST DUE DEBTS DURING THE SAME ACADEMIC TERM OR BILLING CYCLE IN WHICH THE DEBT ACCRUED AND BEFORE SUCH DEBTS WERE SENT TO A COLLECTION AGENCY; (C) PAYMENTS MADE ON PAST DUE DEBTS BEFORE THEY WERE SENT TO A COLLECTION AGENCY, EXCLUDING THOSE PAYMENTS MADE DURING THE SAME ACADEMIC TERM OR BILLING CYCLE IN WHICH THE DEBT ACCRUED; (D) A THIRD PARTY COLLECTION AGENCY, PRIOR TO INITIATING A LAWSUIT; AND (E) A COLLECTION LAWSUIT, INCLUDING PAYMENTS MADE BY SETTLEMENT OR PURSUANT TO A JUDGMENT; (X) ADDITIONAL INFORMATION AS MAY IN THE JUDGMENT OF THE SUPERINTEN- DENT BE NECESSARY AND APPROPRIATE IN ORDER TO ASSESS THE TOTAL SIZE AND STATUS OF THE PRIVATE EDUCATION DEBT MARKET AND TO ASSESS BORROWER WELL- BEING; AND (XI) A COPY OF ANY MODEL WRITTEN INSTRUMENT USED BY A PROVIDER OF HIGHER EDUCATION IN THE PRIOR FISCAL YEAR TO SUBSTANTIATE A PRIVATE EDUCATION DEBT, INCLUDING BUT NOT LIMITED TO A PROMISSORY NOTE, ENROLL- MENT AGREEMENT, OR CONTRACT. 4. NOT LATER THAN ONE YEAR FOLLOWING THE EFFECTIVE DATE OF THIS SECTION, THE SUPERINTENDENT SHALL CREATE A PUBLICLY ACCESSIBLE WEBSITE THAT INCLUDES AT LEAST THE FOLLOWING INFORMATION ABOUT PRIVATE EDUCATION CREDITORS REGISTERED IN THIS STATE: (A) THE NAME, ADDRESS, TELEPHONE NUMBER AND WEBSITE FOR ALL PRIVATE EDUCATION CREDITORS; (B) A SUMMARY OF THE INFORMATION REQUIRED BY SUBDIVISION THREE OF THIS SECTION; AND (C) COPIES OF ALL DOCUMENTS PROVIDED UNDER SUBPARAGRAPH (XV) OF PARA- GRAPH (A) OF SUBDIVISION THREE OF THIS SECTION AND SUBPARAGRAPH (XI) OF PARAGRAPH (C) OF SUBDIVISION THREE OF THIS SECTION. § 903. RULES AND REGULATIONS. IN ADDITION TO SUCH POWERS AS MAY OTHER- WISE BE PRESCRIBED BY THIS CHAPTER, THE SUPERINTENDENT IS HEREBY AUTHOR- IZED 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. § 904. VIOLATIONS. 1. IF THE SUPERINTENDENT FINDS, AFTER NOTICE AND HEARING, THAT A PRIVATE EDUCATION CREDITOR HAS KNOWINGLY VIOLATED THIS ARTICLE BY FAILING TO COMPLY WITH ANY REGISTRATION OR REPORTING REQUIRE- MENT OR BY FURNISHING INACCURATE INFORMATION TO THE SUPERINTENDENT, ANY PRIVATE EDUCATION DEBT MADE TO OR INCURRED BY A RESIDENT OF THIS STATE S. 5056 6 AND OWED TO SUCH PRIVATE EDUCATION CREDITOR WHILE SUCH CREDITOR WAS OUT OF COMPLIANCE WITH THIS ARTICLE IS VOID AND UNENFORCEABLE AND THE SUPER- INTENDENT MAY IMPOSE A CIVIL PENALTY OF NOT MORE THAN TEN THOUSAND DOLLARS FOR EACH VIOLATION. 2. THE SUPERINTENDENT MAY ORDER THAT ANY PERSON WHO HAS BEEN FOUND TO HAVE KNOWINGLY VIOLATED ANY PROVISION OF THIS ARTICLE, OR OF THE RULES AND REGULATIONS ISSUED PURSUANT THERETO, AND HAS THEREBY CAUSED FINAN- CIAL HARM TO CONSUMERS, BE BARRED FOR A TERM NOT EXCEEDING TEN YEARS FROM ACTING AS A PRIVATE EDUCATION CREDITOR, OR A STOCKHOLDER, OR AN OFFICER, DIRECTOR, PARTNER OR OTHER OWNER, OR AN EMPLOYEE OF A PRIVATE EDUCATION CREDITOR. § 905. SEVERABILITY. IF ANY PROVISION OF THIS ARTICLE OR THE APPLICA- TION THEREOF TO ANY PERSON OR CIRCUMSTANCE IS ADJUDGED INVALID BY A COURT OF COMPETENT JURISDICTION, THAT JUDGMENT SHALL NOT AFFECT OR IMPAIR THE VALIDITY OF THE OTHER PROVISIONS OF THIS ARTICLE OR THE APPLICATION THEREOF TO OTHER PERSONS AND CIRCUMSTANCES. § 2. This act shall take effect immediately.
2023-S5056A (ACTIVE) - Details
- Law Section:
- Financial Services Law
- Laws Affected:
- Add Art 9 §§901 - 905, Fin Serv L
2023-S5056A (ACTIVE) - Summary
Directs the superintendent of financial services to create a private education debt registry which shall contain information and documentation relating to loans issued by creditors including interest rates and copies of the notes and instruments used by such creditors for education loans.
2023-S5056A (ACTIVE) - Sponsor Memo
BILL NUMBER: S5056A SPONSOR: THOMAS TITLE OF BILL: An act to amend the financial services law, in relation to creating a private education debt registry PURPOSE GENERAL IDEA OF BILL: The purpose of the bill is to give financial policymakers and consumers a full and accurate view of the state of student debt in New York through the creation of a private education debt registry. SUMMARY OF PROVISIONS: Section 1 of the bill amends the financial services law by adding a new Article 9 to create the "private education debt registry." This article requires all private education creditors operating in New York State that are not already licensed or chartered by the Department of Finan- cial Services (DFS) for their private education debt business to regis- ter with the DFS, and requires all private education creditors to annu-
ally submit information on their private education debt activity, regardless of debt's principal amount or interest rate. Private educa- tion creditors are defined as including any person that originates student loan debt or to which such a debt is owed, as well as to include non-loan debt. The annual information that private education creditor's must disclose to DFS varies based on the type of creditor and includes: a list of schools at which the private education creditor has provided a private education debt to a consumer residing in the state, the total dollar amount and number of private education debt made, both overall and during the prior fiscal year, to consumers residing in the state and made annually at each school, the range of interest rates and percentage of applicants who receive those rates, the general default rate, the default rate due to non-payment or due to other reasons, the total dollar amount and number of private education debts made annually with a cosigner, the total dollar amount and number of private education debts that were used to refinance other private education debts, the total dollar amount and number of private education debts for which the credi- tor sued to collect, and a copy of the promissory notes and other agree- ments used to issue private education debts. The bill provides for modi- fied reporting requirements relating to private education debts that do not arise from credit transactions. DFS must publish a summary of the information received from private education creditors on their website along with the name, address, telephone number and website for all private education creditors. DFS is authorized to promulgate rules and regulations. A violation of this article done knowingly may result in a civil penalty up to $10,000 for each violation or being barred from acting as a private education creditor for up to ten years. Section 2 of the bill contains the effective date. JUSTIFICATION: In New York, consumer lenders are not required to be licensed unless the loan is both smaller than $25,000 and at a rate above 16 percent. (1) Even subprime loans generally have interest rates below 16 percent. As a result, private education creditors who do not meet licensing require- ments operate below the Department of Financial Services' radar. This makes information related to private education debts originated to New Yorker borrowers at rates below 16 percent scarce. Additionally, private education creditors that are regulated by DFS are not required to specifically report on their education debt portfolios. Further, there is increasing national scrutiny of school-based debt collection and the role of institutions of higher education as creditors. The federal Consumer Financial Protection Bureau began to examine school-based lend- ing in 2022, and determined that transcript withholding as a means of collecting these debts is "abusive" in violation of federal consumer protection law. New York State in 2022 prohibited the practice of tran- script withholding at all schools in the state, which serves as a debt collection tactic for school-based education debt, but has not taken any additional steps to study or regulate these debts themselves. Whereas federal student loan terms are set by federal law, and whereas data about the federal student loan market are regularly published by the federal government, the lack of consistently available data related to private education debt and the variety of persons that act as private education creditors means that we do not know the full size of the market, trends in origination, terms and conditions of debts, differ- ences in finance costs across demographic groups, default rates, rates of cosigning, prevalence of private student debt and repayment outcomes among older consumers, or outcomes related to student loan servicing. Any data that are available are extrapolations. To address this lack of data, Colorado, Maine, California, Louisiana, and Illinois require private education creditors to annually submit data to financial regulators. New York should do the same. This bill does not require any changes to the business practices of private education creditors, other than require them to share data with the State. PRIOR LEGISLATIVE HISTORY: New bill. FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: To be determined. EFFECTIVE DATE: This act shall take effect. 1 New York Bank Law 340
2023-S5056A (ACTIVE) - Bill Text download pdf
S T A T E O F N E W Y O R K ________________________________________________________________________ 5056--A Cal. No. 1098 2023-2024 Regular Sessions I N S E N A T E February 22, 2023 ___________ Introduced by Sen. THOMAS -- read twice and ordered printed, and when printed to be committed to the Committee on Banks -- reported favora- bly from said committee and committed to the Committee on Finance -- committee discharged and said bill committed to the Committee on Rules -- reported favorably from said committee, ordered to a third reading, passed by Senate and delivered to the Assembly, recalled, vote recon- sidered, restored to third reading, amended and ordered reprinted, retaining its place in the order of third reading AN ACT to amend the financial services law, in relation to creating a private education debt registry THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The financial services law is amended by adding a new arti- cle 9 to read as follows: ARTICLE 9 PRIVATE EDUCATION DEBT REGISTRY SECTION 901. DEFINITIONS. 902. PRIVATE EDUCATION DEBT REGISTRY. 903. RULES AND REGULATIONS. 904. VIOLATIONS. 905. SEVERABILITY. § 901. DEFINITIONS. AS USED IN THIS ARTICLE: 1. "FISCAL YEAR" MEANS THE TWELVE-MONTH PERIOD THAT THE PRIVATE EDUCA- TION CREDITOR USES FOR FINANCIAL REPORTING AND BUDGETING. 2. "HIGHER EDUCATION" MEANS HIGHER EDUCATION, INCLUDING CAREER EDUCA- TION, AS THOSE TERMS ARE DEFINED IN SECTION TWO OF THE EDUCATION LAW, VIA CORRESPONDENCE, ONLINE, OR IN PERSON, REGARDLESS OF WHETHER THE HIGHER EDUCATION INSTITUTION IS ACCREDITED WITHIN NEW YORK STATE. 3. "HIGHER EDUCATION EXPENSE" MEANS ANY EXPENSE ARISING FROM HIGHER EDUCATION. EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08128-04-3
S. 5056--A 2 4. "PRIVATE EDUCATION CREDITOR" MEANS ANY PERSON ENGAGED IN THE BUSI- NESS OF SECURING, MAKING, OR EXTENDING A PRIVATE EDUCATION DEBT, OR ANY HOLDER OF A PRIVATE EDUCATION DEBT, INCLUDING PROVIDERS OF HIGHER EDUCA- TION TO WHICH A STUDENT EDUCATION DEBT IS OWED. "PRIVATE EDUCATION CRED- ITOR" SHALL NOT INCLUDE THE FOLLOWING PERSONS, ONLY TO THE EXTENT THAT STATE REGULATION IS PREEMPTED BY FEDERAL LAW: (A) ANY FEDERALLY CHARTERED BANK, SAVINGS BANK, SAVINGS AND LOAN ASSO- CIATION, OR CREDIT UNION; (B) ANY BANK, SAVINGS BANK, SAVINGS AND LOAN ASSOCIATION, OR CREDIT UNION ORGANIZED UNDER THE LAWS OF THIS OR ANY OTHER STATE; (C) ANY WHOLLY OWNED SUBSIDIARY OF A FEDERALLY CHARTERED BANK OR CRED- IT UNION; AND (D) ANY OPERATING SUBSIDIARY WHERE EACH OWNER OF THE OPERATING SUBSID- IARY IS WHOLLY OWNED BY THE SAME FEDERALLY CHARTERED BANK OR CREDIT UNION. 5. "PRIVATE EDUCATION DEBT" MEANS AN EXTENSION OF CREDIT OR DEBT OR OBLIGATION OWED OR INCURRED BY A CONSUMER, CONTRACTUAL OR OTHERWISE, CONTINGENT OR ABSOLUTE, THAT MEETS ALL OF THE FOLLOWING CRITERIA: (A) IS NOT MADE, INSURED, OR GUARANTEED UNDER TITLE IV OF THE HIGHER EDUCATION ACT OF 1965 (20 U.S.C. S.1070 ET SEQ.); (B) IS EXTENDED TO A CONSUMER EXPRESSLY, IN WHOLE OR IN PART, FOR, OR ACCRUES FROM NONPAYMENT OF, HIGHER EDUCATION EXPENSES, REGARDLESS OF WHETHER THE CREDIT OR DEBT OR OBLIGATION IS OWED TO THE PROVIDER OF HIGHER EDUCATION THAT THE STUDENT ATTENDS; AND (C) SHALL NOT INCLUDE ANY LOAN THAT IS SECURED BY REAL PROPERTY OR A DWELLING. "PRIVATE EDUCATION DEBT" SHALL INCLUDE EXTENSIONS OF CREDIT OR DEBT OR OBLIGATIONS OWED OR INCURRED TO REFINANCE A PRIVATE EDUCATION DEBT. 6. "PROVIDER OF HIGHER EDUCATION" OR "SCHOOL" MEANS A PERSON ENGAGED IN THE BUSINESS OF HIGHER EDUCATION. FOR THE PURPOSES OF THIS DEFI- NITION, A PERSON NEED NOT HAVE OBTAINED AUTHORIZATION FROM THE DEPART- MENT OF EDUCATION TO OPERATE IN THIS STATE AND NEED NOT BE AN ACCREDITED INSTITUTION. § 902. PRIVATE EDUCATION DEBT REGISTRY. 1. BEGINNING ON OR AFTER THE ONE HUNDRED EIGHTIETH DAY AFTER THE EFFECTIVE DATE OF THIS ARTICLE, NO PERSON SHALL ENGAGE IN BUSINESS AS A PRIVATE EDUCATION CREDITOR IN THIS STATE WITHOUT FIRST SATISFYING THE FOLLOWING REQUIREMENTS SET FORTH IN SUBDIVISIONS TWO AND THREE OF THIS SECTION. 2. (A) A PRIVATE EDUCATION CREDITOR OPERATING IN THIS STATE SHALL REGISTER WITH THE SUPERINTENDENT PURSUANT TO ANY REGISTRATION PROCEDURES SET FORTH BY THE SUPERINTENDENT BY RULE OR REGULATION, WHICH MAY INCLUDE REGISTRATION THROUGH THE NATIONWIDE MULTISTATE LICENSING SYSTEM AND REGISTRY, AND SHALL PAY A FEE SET BY THE SUPERINTENDENT. THE SUPERINTEN- DENT MAY PRESCRIBE AN ALTERNATIVE REGISTRATION PROCESS AND FEE STRUCTURE FOR A PROVIDER OF HIGHER EDUCATION. REGISTRATION SHALL INCLUDE, AT A MINIMUM, THE NAME AND ADDRESS OF THE PRIVATE EDUCATION CREDITOR AND ANY OFFICER, DIRECTOR, PARTNER, OR OWNER OF A CONTROLLING INTEREST OF THE PRIVATE EDUCATION CREDITOR. A PRIVATE EDUCATION CREDITOR SHALL ANNUALLY RENEW ITS REGISTRATION AND PAY A RENEWAL FEE PURSUANT TO A PROCEDURE AND ON OR BEFORE A DATE TO BE DETERMINED BY THE SUPERINTENDENT. (B) THIS SUBDIVISION SHALL NOT APPLY TO REGULATED PERSONS, AS SUCH TERM IS DEFINED IN SECTION ONE HUNDRED FOUR OF THIS CHAPTER, ENGAGED IN BUSINESS AS A PRIVATE EDUCATION CREDITOR IN THIS STATE, TO THE EXTENT SUCH REGULATION RELATES TO ITS BUSINESS AS A PRIVATE EDUCATION CREDITOR AND SUCH PERSONS ARE REQUIRED TO FURNISH DATA OR REPORTS ANNUALLY TO THE SUPERINTENDENT. S. 5056--A 3 3. A PRIVATE EDUCATION CREDITOR OPERATING IN THIS STATE SHALL ANNUAL- LY, ON OR BEFORE A DATE TO BE DETERMINED BY THE SUPERINTENDENT AND NOT TO EXCEED SIX MONTHS FOLLOWING THE EFFECTIVE DATE OF THIS ARTICLE, PROVIDE THE SUPERINTENDENT WITH THE FOLLOWING DOCUMENTS AND INFORMATION ABOUT SUCH CREDITOR'S PRIVATE EDUCATION DEBT PORTFOLIO RELATED TO CONSUMERS THAT RESIDE IN THIS STATE PURSUANT TO ANY PROCEDURE SET FORTH BY THE SUPERINTENDENT, WHICH MAY INCLUDE REPORTING THROUGH THE NATION- WIDE MULTISTATE LICENSING SYSTEM AND REGISTRY, AND WHICH MAY FURTHER INCLUDE DIFFERENT PROCEDURES FOR REGULATED PERSONS, AS THAT TERM IS DEFINED IN SECTION ONE HUNDRED FOUR OF THIS CHAPTER, AND NON-REGULATED PERSONS: (A) FOR PRIVATE EDUCATION CREDITORS THAT SECURE, MAKE, OR EXTEND PRIVATE EDUCATION DEBTS, OTHER THAN THOSE PRIVATE EDUCATION DEBTS REPORTED PURSUANT TO PARAGRAPH (C) OF THIS SUBDIVISION, RELATING TO SUCH DEBTS OWED BY A CONSUMER RESIDING IN THIS STATE AS OF THE END OF THE PRIOR FISCAL YEAR: (I) A LIST OF ALL SCHOOLS FOR WHICH SUCH PRIVATE EDUCATION DEBTS WERE USED TO FINANCE HIGHER EDUCATION, INCLUDING, IN THE CASE OF A REFINANC- ING LOAN, THE SCHOOL THAT THE CONSUMER ATTENDED USING THE PRIVATE EDUCA- TION DEBT THAT WAS REFINANCED; (II) THE TOTAL OUTSTANDING DOLLAR AMOUNT AND NUMBER OF SUCH PRIVATE EDUCATION DEBTS AND THE NUMBER OF CONSUMERS WHO OWE SUCH PRIVATE EDUCA- TION DEBTS; (III) THE TOTAL DOLLAR AMOUNT AND NUMBER OF SUCH PRIVATE EDUCATION DEBTS ASSOCIATED WITH EACH SCHOOL IDENTIFIED UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH; (IV) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS SECURED, MADE, OR EXTENDED IN THE PRIOR FISCAL YEAR; (V) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS SECURED, MADE, OR EXTENDED IN THE PRIOR FISCAL YEAR ASSOCIATED WITH EACH SCHOOL IDENTIFIED UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH; (VI) THE RANGE OF STARTING INTEREST RATES FOR PRIVATE EDUCATION DEBTS SECURED, MADE, OR EXTENDED TO CONSUMERS IN THE PRIOR FISCAL YEAR AND PERCENTAGE OF CONSUMERS WHO RECEIVE THOSE RATES; (VII) THE OVERALL DEFAULT RATE, AS WELL AS THE OVERALL DEFAULT FOR SUCH DEBTS ASSOCIATED WITH EACH SCHOOL LISTED UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH; (VIII) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS THAT DEFAULTED FOR REASONS OTHER THAN NON-PAYMENT IN THE PRIOR FISCAL YEAR, AS APPLICABLE; (IX) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS WITH A COSIGNER, AS APPLICABLE; (X) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS SECURED, MADE, OR EXTENDED WITH A COSIGNER IN THE PRIOR FISCAL YEAR, AS APPLICABLE; (XI) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS SECURED, MADE, OR EXTENDED TO REFINANCE OTHER PRIVATE EDUCATION DEBTS OR FEDERAL STUDENT LOANS, RESPECTIVELY, AS APPLICABLE; (XII) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS SECURED, MADE, OR EXTENDED TO REFINANCE OTHER PRIVATE EDUCATION DEBTS OR FEDERAL STUDENT LOANS, RESPECTIVELY, IN THE PRIOR FISCAL YEAR, AS APPLI- CABLE; (XIII) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS FOR WHICH THE PRIVATE EDUCATION CREDITOR HAS SUED TO COLLECT IN THE PRIOR FISCAL YEAR, AS APPLICABLE; S. 5056--A 4 (XIV) ADDITIONAL INFORMATION AS MAY IN THE JUDGMENT OF THE SUPERINTEN- DENT BE NECESSARY AND APPROPRIATE IN ORDER TO ASSESS THE TOTAL SIZE AND STATUS OF THE PRIVATE EDUCATION DEBT MARKET AND TO ASSESS BORROWER WELL- BEING; AND (XV) A COPY OF ANY MODEL PROMISSORY NOTE, AGREEMENT, CONTRACT OR OTHER INSTRUMENT USED BY A PRIVATE EDUCATION CREDITOR DURING THE PREVIOUS FISCAL YEAR TO SUBSTANTIATE THAT A NEW PRIVATE EDUCATION DEBT HAS BEEN EXTENDED TO THE CONSUMER OR THAT A CONSUMER OWES A DEBT OR OBLIGATION TO THE PRIVATE EDUCATION CREDITOR. (B) FOR PRIVATE EDUCATION CREDITORS THAT ACQUIRE OR ASSUME PRIVATE EDUCATION DEBTS OWED BY A CONSUMER RESIDING IN THIS STATE, RELATING TO SUCH DEBTS AS OF THE END OF THE PRIOR FISCAL YEAR: (I) A LIST OF ALL SCHOOLS FOR WHICH SUCH PRIVATE EDUCATION DEBTS WERE USED TO FINANCE HIGHER EDUCATION, INCLUDING, IN THE CASE OF A REFINANC- ING LOAN, THE SCHOOL THAT THE CONSUMER ATTENDED USING THE PRIVATE EDUCA- TION DEBT THAT WAS REFINANCED; (II) THE TOTAL OUTSTANDING DOLLAR AMOUNT AND NUMBER OF SUCH PRIVATE EDUCATION DEBTS AND NUMBER OF CONSUMERS WHO OWE SUCH PRIVATE EDUCATION DEBTS; (III) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS ASSOCIATED WITH EACH SCHOOL IDENTIFIED UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH; (IV) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS ACQUIRED OR ASSUMED IN THE PRIOR FISCAL YEAR; (V) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS ACQUIRED OR ASSUMED IN THE PRIOR FISCAL YEAR ASSOCIATED WITH EACH SCHOOL IDENTIFIED UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH; (VI) THE OVERALL DEFAULT RATE, AS WELL AS THE OVERALL DEFAULT FOR SUCH DEBTS ASSOCIATED WITH EACH SCHOOL LISTED UNDER SUBPARAGRAPH (I) OF THIS PARAGRAPH; (VII) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS THAT DEFAULTED FOR REASONS OTHER THAN NONPAYMENT IN THE PRIOR FISCAL YEAR, AS APPLICABLE; (VIII) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS WITH A COSIGNER, AS APPLICABLE; (IX) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS THAT WERE USED TO REFINANCE OTHER PRIVATE EDUCATION DEBTS, AS APPLICA- BLE; (X) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS FOR WHICH THE PRIVATE EDUCATION CREDITOR HAS SUED TO COLLECT IN THE PRIOR FISCAL YEAR, AS APPLICABLE; AND (XI) ADDITIONAL INFORMATION AS MAY IN THE JUDGMENT OF THE SUPERINTEN- DENT BE NECESSARY AND APPROPRIATE IN ORDER TO ASSESS THE TOTAL SIZE AND STATUS OF THE PRIVATE EDUCATION DEBT MARKET AND TO ASSESS BORROWER WELL- BEING. (C) FOR PRIVATE EDUCATION CREDITORS THAT ARE PROVIDERS OF HIGHER EDUCATION AND WHOSE PRIVATE EDUCATION DEBTS RESULT FROM UNPAID DEBTS OR OBLIGATIONS THAT WERE NOT EXTENSIONS OF CREDIT AND THAT RESULT FROM HIGHER EDUCATION PROVIDED IN THIS STATE, RELATING TO SUCH DEBTS AS OF THE END OF THE PRIOR FISCAL YEAR, REPORTED BY RACE AND GENDER: (I) THE TOTAL OUTSTANDING DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCA- TION DEBTS AND NUMBER OF CONSUMERS WHO OWE THOSE DEBTS; (II) THE TOTAL DOLLAR AMOUNT AND NUMBER OF PRIVATE EDUCATION DEBTS ACCRUED AND NUMBER OF CONSUMERS WHO OWE THOSE DEBTS IN THE PRIOR FISCAL YEAR; S. 5056--A 5 (III) THE TOTAL NUMBER AND BALANCE OF STUDENT ACCOUNTS WITH AN ACADEM- IC OR ADMINISTRATIVE HOLD RESULTING FROM A PRIVATE EDUCATION DEBT; (IV) THE TOTAL NUMBER AND BALANCE OF STUDENT ACCOUNTS WITH AN ACADEMIC OR ADMINISTRATIVE HOLD RESULTING FROM A PRIVATE EDUCATION DEBT FOR WHICH A PAYMENT WAS MADE IN THE PRIOR FISCAL YEAR AND AVERAGE PAYMENT MADE; (V) THE TOTAL NUMBER OF STUDENT ACCOUNTS FOR WHICH FEDERAL FINANCIAL AID WAS RETURNED TO THE FEDERAL GOVERNMENT UPON THE STUDENT'S WITHDRAWAL FROM THE PROVIDER OF HIGHER EDUCATION IN THE PRIOR FISCAL YEAR, AND THE TOTAL DOLLAR AMOUNT OF ANY PRIVATE EDUCATION DEBT ACCRUED AS A RESULT; (VI) THE NUMBER OF CONSUMERS WHO OWE A PRIVATE EDUCATION DEBT WHO RECEIVED A FEDERAL PELL GRANT AND THE AVERAGE DEBT OWED; (VII) THE NUMBER OF CONSUMERS WHO OWE A PRIVATE EDUCATION DEBT WHO ARE CONSIDERED IN-STATE AND OUT-OF-STATE STUDENTS, AND THE TOTAL DEBT OWED BY EACH GROUP; (VIII) THE TOTAL DOLLAR AMOUNT, NUMBER OF PRIVATE EDUCATION DEBTS, AND NUMBER OF CONSUMERS FOR WHICH THE PRIVATE EDUCATION CREDITOR HAS IN THE PRIOR FISCAL YEAR (A) CHARGED OFF THE DEBT, (B) SENT THE DEBT TO A THIRD PARTY COLLECTION AGENCY, (C) INITIATED A COLLECTION LAWSUIT, (D) REPORTED THE DEBT TO A CONSUMER CREDIT REPORTING AGENCY, AND (E) SOLD THE DEBT; (IX) THE TOTAL DOLLAR AMOUNT, NUMBER OF PRIVATE EDUCATION DEBTS, AND NUMBER OF CONSUMERS FOR WHICH THE PRIVATE EDUCATION CREDITOR HAS, IN THE PRIOR FISCAL YEAR, COLLECTED ON A PRIVATE EDUCATION DEBT IN THE FOLLOW- ING INSTANCES: (A) PAYMENT ARRANGEMENTS WHEREIN THE PAYMENT WAS NOT CONSIDERED PAST DUE, SUCH AS TUITION INSTALLMENT AGREEMENTS; (B) PAYMENTS MADE ON PAST DUE DEBTS DURING THE SAME ACADEMIC TERM OR BILLING CYCLE IN WHICH THE DEBT ACCRUED AND BEFORE SUCH DEBTS WERE SENT TO A COLLECTION AGENCY; (C) PAYMENTS MADE ON PAST DUE DEBTS BEFORE THEY WERE SENT TO A COLLECTION AGENCY, EXCLUDING THOSE PAYMENTS MADE DURING THE SAME ACADEMIC TERM OR BILLING CYCLE IN WHICH THE DEBT ACCRUED; (D) A THIRD PARTY COLLECTION AGENCY, PRIOR TO INITIATING A LAWSUIT; AND (E) A COLLECTION LAWSUIT, INCLUDING PAYMENTS MADE BY SETTLEMENT OR PURSUANT TO A JUDGMENT; (X) ADDITIONAL INFORMATION AS MAY IN THE JUDGMENT OF THE SUPERINTEN- DENT BE NECESSARY AND APPROPRIATE IN ORDER TO ASSESS THE TOTAL SIZE AND STATUS OF THE PRIVATE EDUCATION DEBT MARKET AND TO ASSESS BORROWER WELL- BEING; AND (XI) A COPY OF ANY MODEL WRITTEN INSTRUMENT USED BY A PROVIDER OF HIGHER EDUCATION IN THE PRIOR FISCAL YEAR TO SUBSTANTIATE A PRIVATE EDUCATION DEBT, INCLUDING BUT NOT LIMITED TO A PROMISSORY NOTE, ENROLL- MENT AGREEMENT, OR CONTRACT. 4. NOT LATER THAN ONE YEAR FOLLOWING THE EFFECTIVE DATE OF THIS SECTION, THE SUPERINTENDENT SHALL CREATE A PUBLICLY ACCESSIBLE WEBSITE THAT INCLUDES AT LEAST THE FOLLOWING INFORMATION ABOUT PRIVATE EDUCATION CREDITORS REGISTERED IN THIS STATE: (A) THE NAME, ADDRESS, TELEPHONE NUMBER AND WEBSITE FOR ALL PRIVATE EDUCATION CREDITORS; (B) A SUMMARY OF THE INFORMATION REQUIRED BY SUBDIVISION THREE OF THIS SECTION; AND (C) COPIES OF ALL DOCUMENTS PROVIDED UNDER SUBPARAGRAPH (XV) OF PARA- GRAPH (A) OF SUBDIVISION THREE OF THIS SECTION AND SUBPARAGRAPH (XI) OF PARAGRAPH (C) OF SUBDIVISION THREE OF THIS SECTION. § 903. RULES AND REGULATIONS. IN ADDITION TO SUCH POWERS AS MAY OTHER- WISE BE PRESCRIBED BY THIS CHAPTER, THE SUPERINTENDENT IS HEREBY AUTHOR- IZED AND EMPOWERED TO PROMULGATE SUCH RULES AND REGULATIONS AS MAY IN THE JUDGMENT OF THE SUPERINTENDENT BE CONSISTENT WITH THE PURPOSES OF S. 5056--A 6 THIS ARTICLE, OR APPROPRIATE FOR THE EFFECTIVE ADMINISTRATION OF THIS ARTICLE. § 904. VIOLATIONS. 1. IF THE SUPERINTENDENT FINDS, AFTER NOTICE AND HEARING, THAT A PRIVATE EDUCATION CREDITOR HAS KNOWINGLY VIOLATED THIS ARTICLE BY FAILING TO COMPLY WITH ANY REGISTRATION OR REPORTING REQUIRE- MENT OR BY FURNISHING INACCURATE INFORMATION TO THE SUPERINTENDENT, THE SUPERINTENDENT MAY IMPOSE A CIVIL PENALTY OF NOT MORE THAN TEN THOUSAND DOLLARS FOR EACH VIOLATION. 2. THE SUPERINTENDENT MAY ORDER THAT ANY PERSON WHO HAS BEEN FOUND TO HAVE KNOWINGLY VIOLATED ANY PROVISION OF THIS ARTICLE, OR OF THE RULES AND REGULATIONS ISSUED PURSUANT THERETO, AND HAS THEREBY CAUSED FINAN- CIAL HARM TO CONSUMERS, BE BARRED FOR A TERM NOT EXCEEDING TEN YEARS FROM ACTING AS A PRIVATE EDUCATION CREDITOR, OR A STOCKHOLDER, OR AN OFFICER, DIRECTOR, PARTNER OR OTHER OWNER, OR AN EMPLOYEE OF A PRIVATE EDUCATION CREDITOR. § 905. SEVERABILITY. IF ANY PROVISION OF THIS ARTICLE OR THE APPLICA- TION THEREOF TO ANY PERSON OR CIRCUMSTANCE IS ADJUDGED INVALID BY A COURT OF COMPETENT JURISDICTION, THAT JUDGMENT SHALL NOT AFFECT OR IMPAIR THE VALIDITY OF THE OTHER PROVISIONS OF THIS ARTICLE OR THE APPLICATION THEREOF TO OTHER PERSONS AND CIRCUMSTANCES. § 2. This act shall take effect immediately.
Comments
Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.
Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. Comment moderation is generally performed Monday through Friday. By contributing or voting you agree to the Terms of Participation and verify you are over 13.
Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.