House Bill 5585 Summary

• Establishes the "Student Loan Servicer Licensing Act" requiring persons to obtain a license from the Department of Insurance and Financial Services before servicing student education loans in Michigan.

• Licensing applicants must submit financial statements audited by a certified public accountant, criminal history information for owners/officers, and pay a $1,000 nonrefundable license fee plus $800 nonrefundable investigation fee.

• Creates the Student Loan Servicer Regulatory Fund to collect and manage licensing fees, with $50 of each fee directed to a separate Student Loan Ombudsman Fund for administering the student loan ombudsman program.

• Prohibits student loan servicers from engaging in fraudulent or deceptive practices, misapplying payments, providing inaccurate credit reporting information, or failing to comply with federal lending regulations including the Truth in Lending Act.

• Director may suspend, revoke, or refuse license renewal for violations, impose administrative fines up to $3,000, or require restitution; exempts depository institutions and their wholly owned subsidiaries from licensing requirements.