Amd Art 9 Art Head, §§901, 902 & 904, Fin Serv L (as proposed in S.8197 & A.8913)
Provides that each student loan servicer shall submit an annual report containing a list of all private education creditors associated with the private education debts serviced by the student loan servicer that are owed by persons who resided in New York during the prior calendar year and containing additional information for each private education creditor reported.
STATE OF NEW YORK
________________________________________________________________________
2680
2025-2026 Regular Sessions
IN SENATE
January 22, 2025
___________
Introduced by Sen. SANDERS -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules
AN ACT to amend the financial services law, in relation to private
education debt reporting
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The article heading of article 9 and sections 901, 902 and
2 904 of the financial services law, as added by a chapter of the laws of
3 2024 amending the financial services law relating to creating a private
4 education debt registry, as proposed in legislative bills numbers S.
5 8197 and A. 8913, are amended to read as follows:
6 ARTICLE 9
7 PRIVATE EDUCATION DEBT [REGISTRY] REPORTING
8 § 901. Definitions. As used in this article:
9 1.[ "Fiscal year" means the twelve-month period that the private
10 education creditor uses for financial reporting and budgeting.
11 2.] "Higher education" means higher education[, including] or career
12 education, as those terms are defined in section two of the education
13 law, via correspondence, online, or in person, regardless of whether the
14 provider of such higher education [institution] is [accredited] located
15 within New York state.
16 [3.] 2. "Higher education expense" means any expense that is incurred
17 by a consumer arising from higher education.
18 3. "Student loan servicer" has the same meaning as such term is
19 defined in subdivision six of section seven hundred ten of the banking
20 law.
21 4. "Private education creditor" means any person engaged in the busi-
22 ness of [securing, making, or] extending a private education debt[, or
23 any holder of a private education debt, including providers of higher
24 education to which a student education debt is owed. "Private education
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02724-01-5
S. 2680 2
1 creditor" shall not include the following persons, only to the extent
2 that state regulation is preempted by federal law:
3 (a) any federally chartered bank, savings bank, savings and loan asso-
4 ciation, or credit union;
5 (b) any bank, savings bank, savings and loan association, or credit
6 union organized under the laws of this or any other state;
7 (c) any wholly owned subsidiary of a federally chartered bank or cred-
8 it union; and
9 (d) any operating subsidiary where each owner of the operating subsid-
10 iary is wholly owned by the same federally chartered bank or credit
11 union].
12 5. "Private education debt" means an extension of credit to or debt or
13 obligation owed or incurred by a consumer, contractual or otherwise,
14 [contingent or absolute,] that [meets all of the following criteria]:
15 (a) is not made, insured, or guaranteed under Title IV of the Higher
16 Education Act of 1965 (20 U.S.C. s.1070 et seq.);
17 (b) is extended to a consumer expressly, in whole or in part, for, or
18 accrues from nonpayment of, higher education expenses, regardless of
19 whether the credit or debt or obligation is owed to [the] a provider of
20 higher education [that the student attends]; and
21 (c) [shall] is not [include any] a loan that is secured by real prop-
22 erty or a dwelling.
23 "Private education debt" shall include extensions of credit or debt or
24 obligations owed or incurred to refinance a private education debt.
25 6. "Provider of higher education" [or "school"] means a person engaged
26 in [the business of] providing or offering to provide higher education.
27 [For the purposes of this definition, a person need not have obtained
28 authorization from the department of education to operate in this state
29 and need not be an accredited institution.]
30 § 902. Private education debt [registry] reporting. 1. [Beginning on
31 or after the one hundred eightieth day after the effective date of this
32 article, no person shall engage in business as a private education cred-
33 itor in this state without first satisfying the following requirements
34 set forth in subdivisions two and three of this section.
35 2. (a) A private education creditor operating in this state shall
36 register with the superintendent pursuant to any registration procedures
37 set forth by the superintendent by rule or regulation, which may include
38 registration through the Nationwide Multistate Licensing System and
39 Registry, and shall pay a fee set by the superintendent. The superinten-
40 dent may prescribe an alternative registration process and fee structure
41 for a provider of higher education. Registration shall include, at a
42 minimum, the name and address of the private education creditor and any
43 officer, director, partner, or owner of a controlling interest of the
44 private education creditor. A private education creditor shall annually
45 renew its registration and pay a renewal fee pursuant to a procedure and
46 on or before a date to be determined by the superintendent.
47 (b) This subdivision shall not apply to regulated persons, as such
48 term is defined in section one hundred four of this chapter, engaged in
49 business as a private education creditor in this state, to the extent
50 such regulation relates to its business as a private education creditor
51 and such persons are required to furnish data or reports annually to the
52 superintendent.
53 3. A private education creditor operating in this state shall annual-
54 ly, on or before a date to be determined by the superintendent and not
55 to exceed six months following the effective date of this article,
56 provide the superintendent with the following documents and information
S. 2680 3
1 about such creditor's private education debt portfolio related to
2 consumers that reside in this state pursuant to any procedure set forth
3 by the superintendent, which may include reporting through the Nation-
4 wide Multistate Licensing System and Registry, and which may further
5 include different procedures for regulated persons, as that term is
6 defined in section one hundred four of this chapter, and non-regulated
7 persons] Each student loan servicer shall, by the first of April of each
8 year, submit an annual report which complies with any instructions
9 published by the superintendent, in the manner set forth in such
10 instructions, certifying as accurate the following information for the
11 private education debt such student loan servicer serviced during the
12 prior calendar year:
13 (a) [For private education creditors that secure, make, or extend
14 private education debts, other than those private education debts
15 reported pursuant to paragraph (c) of this subdivision, relating to such
16 debts owed by a consumer residing in this state as of the end of the
17 prior fiscal year] a list of all private education creditors associated
18 with the private education debts serviced by the student loan servicer
19 that are owed by persons who resided in New York during the prior calen-
20 dar year; and
21 (b) for each private education creditor reported pursuant to paragraph
22 (a) of this subdivision, the following information:
23 (i) a list of [all schools for which such private education debts were
24 used to finance] the providers of higher education[, including, in the
25 case of a refinancing loan, the school that the consumer attended using
26 the private education debt that was refinanced] associated with the
27 private education debts serviced by the student loan servicer;
28 (ii) the total outstanding dollar amount and number of [such] private
29 education debts and the number of consumers who owe such private educa-
30 tion debts;
31 (iii) the total dollar amount and number of [such] private education
32 debts [associated with each school identified under subparagraph (i) of
33 this paragraph] created in the prior calendar year;
34 (iv) the number of private education debts that experienced a default
35 and the percentage of such private education debts associated with each
36 private education creditor;
37 (v) the total dollar amount and number of private education debts
38 [secured, made, or extended] that defaulted for reasons other than non-
39 payment in the prior [fiscal] calendar year;
40 [(v)] (vi) the total dollar amount and number of private education
41 debts [secured, made, or extended in the prior fiscal year associated]
42 with [each school identified under subparagraph (i) of this paragraph] a
43 cosigner or guarantor;
44 [(vi)] (vii) the [range of starting interest rates for] total dollar
45 amount and number of private education debts [secured, made, or extended
46 to consumers] with a cosigner or guarantor created in the prior [fiscal]
47 calendar year [and percentage of consumers who receive those rates;
48 (vii) the overall default rate, as well as the overall default for
49 such debts associated with each school listed under subparagraph (i)
50 of this paragraph];
51 (viii) the total dollar amount and number of private education debts
52 [that defaulted for reasons other than non-payment in the prior
53 fiscal year, as applicable;
54 (ix) the total dollar amount and number of private education debts
55 with a cosigner, as applicable;
S. 2680 4
1 (x) the total dollar amount and number of private education debts
2 secured, made, or extended with a cosigner in the prior fiscal year, as
3 applicable;
4 (xi) the total dollar amount and number of private education debts
5 secured, made, or extended] created to refinance other private education
6 debts or federal student loans, respectively[, as applicable];
7 [(xii)] (ix) the total dollar amount and number of private education
8 debts [secured, made, or extended] created to refinance other private
9 education debts or federal student loans, respectively, in the prior
10 [fiscal] calendar year[, as applicable];
11 [(xiii)] (x) the total dollar amount and number of defaulted private
12 education debts for which the [private education creditor has sued to
13 collect] student loan servicer commenced, maintained, or settled a
14 lawsuit for collection in the prior [fiscal] calendar year[, as applica-
15 ble]; and
16 [(xiv) additional] (xi) information as may in the judgment of the
17 superintendent be necessary and appropriate in order to assess the total
18 size and status of the private education debt market and to assess
19 borrower well-being[; and
20 (xv) A copy of any model promissory note, agreement, contract or other
21 instrument used by a private education creditor during the previous
22 fiscal year to substantiate that a new private education debt has been
23 extended to the consumer or that a consumer owes a debt or obligation to
24 the private education creditor.
25 (b) For private education creditors that acquire or assume private
26 education debts owed by a consumer residing in this state, relating to
27 such debts as of the end of the prior fiscal year:
28 (i) a list of all schools for which such private education debts were
29 used to finance higher education, including, in the case of a refinanc-
30 ing loan, the school that the consumer attended using the private educa-
31 tion debt that was refinanced;
32 (ii) the total outstanding dollar amount and number of such private
33 education debts and number of consumers who owe such private education
34 debts;
35 (iii) the total dollar amount and number of private education debts
36 associated with each school identified under subparagraph (i) of this
37 paragraph;
38 (iv) the total dollar amount and number of private education debts
39 acquired or assumed in the prior fiscal year;
40 (v) the total dollar amount and number of private education debts
41 acquired or assumed in the prior fiscal year associated with each school
42 identified under subparagraph (i) of this paragraph;
43 (vi) the overall default rate, as well as the overall default for such
44 debts associated with each school listed under subparagraph (i) of this
45 paragraph;
46 (vii) the total dollar amount and number of private education debts
47 that defaulted for reasons other than nonpayment in the prior fiscal
48 year, as applicable;
49 (viii) the total dollar amount and number of private education debts
50 with a cosigner, as applicable;
51 (ix) the total dollar amount and number of private education debts
52 that were used to refinance other private education debts, as applica-
53 ble;
54 (x) the total dollar amount and number of private education debts for
55 which the private education creditor has sued to collect in the prior
56 fiscal year, as applicable; and
S. 2680 5
1 (xi) additional information as may in the judgment of the superinten-
2 dent be necessary and appropriate in order to assess the total size and
3 status of the private education debt market and to assess borrower well-
4 being.
5 (c) For private education creditors that are providers of higher
6 education and whose private education debts result from unpaid debts or
7 obligations that were not extensions of credit and that result from
8 higher education provided in this state, relating to such debts as of
9 the end of the prior fiscal year, reported by race and gender:
10 (i) the total outstanding dollar amount and number of private educa-
11 tion debts and number of consumers who owe those debts;
12 (ii) the total dollar amount and number of private education debts
13 accrued and number of consumers who owe those debts in the prior fiscal
14 year;
15 (iii) the total number and balance of student accounts with an academ-
16 ic or administrative hold resulting from a private education debt;
17 (iv) the total number and balance of student accounts with an academic
18 or administrative hold resulting from a private education debt for which
19 a payment was made in the prior fiscal year and average payment made;
20 (v) the total number of student accounts for which federal financial
21 aid was returned to the federal government upon the student's withdrawal
22 from the provider of higher education in the prior fiscal year, and the
23 total dollar amount of any private education debt accrued as a result;
24 (vi) the number of consumers who owe a private education debt who
25 received a federal pell grant and the average debt owed;
26 (vii) the number of consumers who owe a private education debt who are
27 considered in-state and out-of-state students, and the total debt owed
28 by each group;
29 (viii) the total dollar amount, number of private education debts, and
30 number of consumers for which the private education creditor has in the
31 prior fiscal year (A) charged off the debt, (B) sent the debt to a third
32 party collection agency, (C) initiated a collection lawsuit, (D)
33 reported the debt to a consumer credit reporting agency, and (E) sold
34 the debt;
35 (ix) the total dollar amount, number of private education debts, and
36 number of consumers for which the private education creditor has, in the
37 prior fiscal year, collected on a private education debt in the follow-
38 ing instances: (A) payment arrangements wherein the payment was not
39 considered past due, such as tuition installment agreements; (B)
40 payments made on past due debts during the same academic term or billing
41 cycle in which the debt accrued and before such debts were sent to a
42 collection agency; (C) payments made on past due debts before they were
43 sent to a collection agency, excluding those payments made during the
44 same academic term or billing cycle in which the debt accrued; (D) a
45 third party collection agency, prior to initiating a lawsuit; and (E) a
46 collection lawsuit, including payments made by settlement or pursuant to
47 a judgment;
48 (x) additional information as may in the judgment of the superinten-
49 dent be necessary and appropriate in order to assess the total size and
50 status of the private education debt market and to assess borrower well-
51 being; and
52 (xi) a copy of any model written instrument used by a provider of
53 higher education in the prior fiscal year to substantiate a private
54 education debt, including but not limited to a promissory note, enroll-
55 ment agreement, or contract.]
S. 2680 6
1 4. Not later than [one year] two years following the effective date of
2 this section, the superintendent shall create a publicly accessible
3 website that includes at least the following information [about private
4 education creditors registered in this state]:
5 (a) The name, address, telephone number and website for all[ private
6 education creditors] student loan servicers; and
7 (b) A summary of the information required by subdivision [three] one
8 of this section[; and
9 (c) Copies of all documents provided under subparagraph (xv) of para-
10 graph (a) of subdivision three of this section and subparagraph (xi) of
11 paragraph (c) of subdivision three of this section].
12 § 904. Violations. 1. If the superintendent finds, after notice and
13 hearing, that a [private education creditor] student loan servicer has
14 knowingly violated this article by failing to comply with any [registra-
15 tion or] reporting requirement or by knowingly furnishing materially
16 inaccurate information to the superintendent, the superintendent may
17 impose a civil penalty of not more than ten thousand dollars for each
18 violation.
19 2. The superintendent may order that any person who has been found to
20 have knowingly violated any provision of this article, or of the rules
21 and regulations issued pursuant thereto, and has thereby caused finan-
22 cial harm to consumers, be barred for a term not exceeding ten years
23 from acting as a [private education creditor] student loan servicer, or
24 a stockholder, or an officer, director, partner or other owner, or an
25 employee of a [private education creditor] student loan servicer.
26 § 2. This act shall take effect on the same date and in the same
27 manner as a chapter of the laws of 2024 amending the financial services
28 law relating to creating a private education debt registry, as proposed
29 in legislative bills numbers S. 8197 and A. 8913, takes effect.
