HB 2335 Summary

• Establishes student loan servicer licensing requirements under a new chapter 18 of Title 6, Arizona Revised Statutes, requiring servicers to obtain licenses from the superintendent of financial institutions with a $1,000 license fee and $800 investigation fee.

• Exempts banks, credit unions, and their wholly owned subsidiaries from licensure requirements.

• Creates a student loan ombudsman position in the Department of Financial Institutions to receive and resolve borrower complaints, compile complaint data, and establish a borrower education course by October 1, 2019.

• Prohibits student loan servicers from engaging in deceptive practices, misapplying payments, providing inaccurate credit bureau reports, refusing communication with authorized representatives, or harassing borrowers.

• Imposes responsibilities on servicers including accurate credit reporting, honoring borrower benefits during loan transfers, responding to inquiries within 30 days, and transferring borrower information within 45 days of loan servicing transfers; violations subject to civil penalties up to $100,000 per violation and private liability for damages and attorney fees.