N.Y.
Banking Law Section 721
Responsibilities
1.
If a student loan servicer regularly reports information to a consumer reporting agency, the servicer shall accurately report a borrower’s payment performance to at least one consumer reporting agency that compiles and maintains files on consumers on a nationwide basis as defined in Section 603(p) of the federal Fair Credit Reporting Act (15 U.S.C. Sec. 1681a(p)), upon acceptance as a data furnisher by that consumer reporting agency.2.
(a) Except as provided in federal law or required by a student loan agreement, a student loan servicer shall inquire of a borrower how to apply a borrower’s nonconforming payment. A borrower’s direction on how to apply a nonconforming payment shall remain in effect for any future nonconforming payment during the term of a student loan until the borrower provides different directions.(b)
For purposes of this subdivision, “nonconforming payment” shall mean a payment that is either more or less than the borrower’s required student loan payment.3.
(a) If the sale, assignment, or other transfer of the servicing of a student loan results in a change in the identity of the person to whom the borrower is required to send subsequent payments or direct any communications concerning the student loan, a student loan servicer shall transfer all information regarding a borrower, a borrower’s account, and a borrower’s student loan, including but not limited to the borrower’s repayment status and any borrower benefits associated with the borrower’s student loan, to the new student loan servicer servicing the borrower’s student loan within forty-five days.(b)
A student loan servicer shall adopt policies and procedures to verify that it has received all information regarding a borrower, a borrower’s account, and a borrower’s student loan, including but not limited to the borrower’s repayment status and any borrower benefits associated with the borrower’s student loan, when the servicer obtains the right to service a student loan.4.
If a student loan servicer sells, assigns, or otherwise transfers the servicing of a student loan to a new servicer, the sale, assignment or other transfer shall be completed at least seven days before the borrower’s next payment is due.5.
(a) A student loan servicer that sells, assigns, or otherwise transfers the servicing of a student loan shall require as a condition of such sale, assignment or other transfer that the new student loan servicer shall honor all borrower benefits originally represented as being available to a borrower during the repayment of the student loan and the possibility of such benefits, including any benefits that were represented as being available but for which the borrower had not yet qualified.(b)
A student loan servicer that obtains the right to service a student loan shall honor all borrower benefits originally represented as being available to a borrower during the repayment of the student loan and the possibility of such benefits, including any benefits that were represented as being available but for which the borrower had not yet qualified.6.
A student loan servicer shall respond within thirty days after receipt to a written inquiry from a borrower or a borrower’s representative.7.
A student loan servicer shall preserve records of each student loan and all communications with borrowers for not less than two years following the final payment on such student loan or the sale, assignment or other transfer of the servicing of such student loan, whichever occurs first, or such longer period as may be required by any other provision of law.
Source:
Section 721 — Responsibilities, https://www.nysenate.gov/legislation/laws/BNK/721 (updated Oct. 11, 2019; accessed Oct. 26, 2024).
