HB 2511 Summary

• Establishes a Student Loan Ombudsman position within the Department of Financial Institutions to assist student loan borrowers with complaints, provide education about loan rights, and compile data on borrower issues.

• Requires student loan servicers operating in Arizona to obtain a license from the superintendent, with exemptions for banks, credit unions, and their subsidiaries; applicants must pay $1,000 license fee and $800 investigation fee.

• Imposes requirements on licensed servicers including maintaining records for at least 2 years, reporting payment history to credit bureaus, and prohibits fraudulent practices, misapplication of payments, and misrepresentation of loan terms.

• Grants the superintendent authority to investigate, examine, and suspend or revoke licenses of non-compliant servicers; requires servicers to comply with federal student loan laws including the Truth in Lending Act.

• Appropriates $500,000 from the general fund in fiscal year 2019-2020 to the Department of Financial Institutions for implementation.