HB 2048 Summary

• Establishes a student loan servicer licensing program under Arizona Department of Insurance and Financial Institutions requiring licensure for entities servicing student education loans to Arizona residents, with exemptions for banks, credit unions, and their wholly-owned subsidiaries.

• Creates a student loan ombudsman position to receive and resolve borrower complaints, compile complaint data, educate borrowers on their rights, and monitor state and federal student loan laws.

• Requires student loan servicers to obtain licenses with $1,000 nonrefundable license fee and $800 investigation fee; licenses expire September 30 of odd-numbered years and must be renewed every two years.

• Imposes strict operational requirements on servicers including accurate reporting to credit bureaus, proper payment application, timely transfer of borrower information between servicers, honoring of borrower benefits, and 30-day response to written inquiries.

• Prohibits deceptive practices such as fraud, misrepresentation, misapplication of payments, and harassment; establishes civil penalties up to $100,000 per violation plus restitution, and allows borrowers to recover actual damages, treble damages, punitive damages, and attorney fees for willful violations.