HB 2226 Summary

• Establishes licensing requirement for student loan servicers operating in Arizona through the Department of Financial Institutions, with exemptions for banks, credit unions, and their wholly owned subsidiaries.

• Creates position of student loan ombudsman to receive and resolve borrower complaints, compile complaint data, provide borrower education, and recommend policy changes regarding student loan lending.

• Prohibits student loan servicers from engaging in deceptive practices, misapplying payments, providing inaccurate credit reporting, refusing authorized representative communications, or misleading borrowers about fees and loan terms.

• Requires servicers to accurately report payment performance to credit bureaus, honor all borrower benefits during loan servicing transfers, respond to borrower inquiries within 30 days, and maintain records for at least two years after final payment or loan transfer.

• Establishes civil penalties up to $100,000 per violation and allows consumers to pursue damages including actual damages, treble damages (3x amount collected), punitive damages, and attorney fees for willful noncompliance.