HF1493 Summary

• Requires all student loan servicers to obtain a license from the Commissioner of Commerce, with exemptions for financial institutions, state agencies, the University of Minnesota, and certain small lenders.

• Establishes licensing requirements including financial statements, criminal history disclosure, nonrefundable license and investigation fees, and annual renewal by December 15.

• Imposes duties on servicers including responding to borrower inquiries within 30 days, allowing borrower direction on overpayments, minimizing late fees on partial payments, and evaluating borrowers for income-driven repayment before forbearance or default.

• Prohibits deceptive practices including misleading borrowers, misrepresenting loan terms or fees, misapplying payments, providing inaccurate credit reporting, and misrepresenting student loan forgiveness programs.

• Appropriates $254,000 annually for fiscal years 2022 and 2023 to the Commissioner of Commerce for administration; effective July 1, 2021.