A student loan servicing comment period is underway on a notice of proposed rulemaking to clarify that education financing products are student loans and that servicers of those products must be licensed.
09/13/2022 2:45 P.M.
1 minute read
On Sept. 9, the California Department of Financial Protection and Innovation (DFPI) proposed the adoption of new regulations and amendment of current regulations implementing the Student Loan Servicing Act and the Student Loans: Borrower Rights law.
The 2018 Student Loan Servicing Act act expanded the authority of the DFPI commissioner to include the licensure, regulation and oversight of student loan servicers. The Student Loans: Borrower Rights law of 2021 added to the act’s student borrower protections.
The proposed rules clarify that education financing products, including but not limited to income share agreements and installment contracts, are student loans and that servicers of education financing products must be licensed, according to an email announcement from the DFPI.
The proposed rulemaking defines terms and documents specific to education financing products. The rulemaking also amends some existing rules, based on the department’s years of experience licensing student loan servicers and conducting regulatory examinations.
The Notice of Proposed Rulemaking, Text and Initial Statement of Reasons are posted on the DFPI webpage. Comments on the proposed regulations may be submitted until 5 p.m., Oct. 28, 2022.
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