S 2680: Provides that each student loan servicer shall submit an annual report containing a list of all private education creditors associated with the private education debts serviced by the student loan servicer that are owed by persons who resided in New York during the prior calendar year and containing additional information for each private education creditor reported.

  
  STATE OF NEW YORK ________________________________________________________________________ 2680 2025-2026 Regular Sessions  IN SENATE January 22, 2025 ___________ Introduced by Sen. SANDERS -- read twice and ordered printed, and when printed to be committed to the Committee on Rules AN ACT to amend the financial services law, in relation to private education debt reporting The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. The article heading of article 9 and sections 901, 902 and 2 904 of the financial services law, as added by a chapter of the laws of 3 2024 amending the financial services law relating to creating a private 4 education debt registry, as proposed in legislative bills numbers S. 5 8197 and A. 8913, are amended to read as follows: 6 ARTICLE 9 7 PRIVATE EDUCATION DEBT [REGISTRY] REPORTING 8 § 901. Definitions. As used in this article: 9 1.[ "Fiscal year" means the twelve-month period that the private 10 education creditor uses for financial reporting and budgeting. 11 2.] "Higher education" means higher education[, including] or career 12 education, as those terms are defined in section two of the education 13 law, via correspondence, online, or in person, regardless of whether the 14 provider of such higher education [institution] is [accredited] located 15 within New York state. 16 [3.] 2. "Higher education expense" means any expense that is incurred 17 by a consumer arising from higher education. 18 3. "Student loan servicer" has the same meaning as such term is 19 defined in subdivision six of section seven hundred ten of the banking 20 law. 21 4. "Private education creditor" means any person engaged in the busi- 22 ness of [securing, making, or] extending a private education debt[, or 23 any holder of a private education debt, including providers of higher 24 education to which a student education debt is owed. "Private education EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD02724-01-5 
 S. 2680 2 1 creditor" shall not include the following persons, only to the extent 2 that state regulation is preempted by federal law: 3 (a) any federally chartered bank, savings bank, savings and loan asso- 4 ciation, or credit union; 5 (b) any bank, savings bank, savings and loan association, or credit 6 union organized under the laws of this or any other state; 7 (c) any wholly owned subsidiary of a federally chartered bank or cred- 8 it union; and 9 (d) any operating subsidiary where each owner of the operating subsid- 10 iary is wholly owned by the same federally chartered bank or credit 11 union]. 12 5. "Private education debt" means an extension of credit to or debt or 13 obligation owed or incurred by a consumer, contractual or otherwise, 14 [contingent or absolute,] that [meets all of the following criteria]: 15 (a) is not made, insured, or guaranteed under Title IV of the Higher 16 Education Act of 1965 (20 U.S.C. s.1070 et seq.); 17 (b) is extended to a consumer expressly, in whole or in part, for, or 18 accrues from nonpayment of, higher education expenses, regardless of 19 whether the credit or debt or obligation is owed to [the] a provider of 20 higher education [that the student attends]; and 21 (c) [shall] is not [include any] a loan that is secured by real prop- 22 erty or a dwelling. 23 "Private education debt" shall include extensions of credit or debt or 24 obligations owed or incurred to refinance a private education debt. 25 6. "Provider of higher education" [or "school"] means a person engaged 26 in [the business of] providing or offering to provide higher education. 27 [For the purposes of this definition, a person need not have obtained 28 authorization from the department of education to operate in this state 29 and need not be an accredited institution.] 30 § 902. Private education debt [registry] reporting. 1. [Beginning on 31 or after the one hundred eightieth day after the effective date of this 32 article, no person shall engage in business as a private education cred- 33 itor in this state without first satisfying the following requirements 34 set forth in subdivisions two and three of this section. 35 2. (a) A private education creditor operating in this state shall 36 register with the superintendent pursuant to any registration procedures 37 set forth by the superintendent by rule or regulation, which may include 38 registration through the Nationwide Multistate Licensing System and 39 Registry, and shall pay a fee set by the superintendent. The superinten- 40 dent may prescribe an alternative registration process and fee structure 41 for a provider of higher education. Registration shall include, at a 42 minimum, the name and address of the private education creditor and any 43 officer, director, partner, or owner of a controlling interest of the 44 private education creditor. A private education creditor shall annually 45 renew its registration and pay a renewal fee pursuant to a procedure and 46 on or before a date to be determined by the superintendent. 47 (b) This subdivision shall not apply to regulated persons, as such 48 term is defined in section one hundred four of this chapter, engaged in 49 business as a private education creditor in this state, to the extent 50 such regulation relates to its business as a private education creditor 51 and such persons are required to furnish data or reports annually to the 52 superintendent. 53 3. A private education creditor operating in this state shall annual- 54 ly, on or before a date to be determined by the superintendent and not 55 to exceed six months following the effective date of this article, 56 provide the superintendent with the following documents and information 
 S. 2680 3 1 about such creditor's private education debt portfolio related to 2 consumers that reside in this state pursuant to any procedure set forth 3 by the superintendent, which may include reporting through the Nation- 4 wide Multistate Licensing System and Registry, and which may further 5 include different procedures for regulated persons, as that term is 6 defined in section one hundred four of this chapter, and non-regulated 7 persons] Each student loan servicer shall, by the first of April of each 8 year, submit an annual report which complies with any instructions 9 published by the superintendent, in the manner set forth in such 10 instructions, certifying as accurate the following information for the 11 private education debt such student loan servicer serviced during the 12 prior calendar year: 13 (a) [For private education creditors that secure, make, or extend 14 private education debts, other than those private education debts 15 reported pursuant to paragraph (c) of this subdivision, relating to such 16 debts owed by a consumer residing in this state as of the end of the 17 prior fiscal year] a list of all private education creditors associated 18 with the private education debts serviced by the student loan servicer 19 that are owed by persons who resided in New York during the prior calen- 20 dar year; and 21 (b) for each private education creditor reported pursuant to paragraph 22 (a) of this subdivision, the following information: 23 (i) a list of [all schools for which such private education debts were 24 used to finance] the providers of higher education[, including, in the 25 case of a refinancing loan, the school that the consumer attended using 26 the private education debt that was refinanced] associated with the 27 private education debts serviced by the student loan servicer; 28 (ii) the total outstanding dollar amount and number of [such] private 29 education debts and the number of consumers who owe such private educa- 30 tion debts; 31 (iii) the total dollar amount and number of [such] private education 32 debts [associated with each school identified under subparagraph (i) of 33 this paragraph] created in the prior calendar year; 34 (iv) the number of private education debts that experienced a default 35 and the percentage of such private education debts associated with each 36 private education creditor; 37 (v) the total dollar amount and number of private education debts 38 [secured, made, or extended] that defaulted for reasons other than non- 39 payment in the prior [fiscal] calendar year; 40 [(v)] (vi) the total dollar amount and number of private education 41 debts [secured, made, or extended in the prior fiscal year associated] 42 with [each school identified under subparagraph (i) of this paragraph] a 43 cosigner or guarantor; 44 [(vi)] (vii) the [range of starting interest rates for] total dollar 45 amount and number of private education debts [secured, made, or extended 46 to consumers] with a cosigner or guarantor created in the prior [fiscal] 47 calendar year [and percentage of consumers who receive those rates; 48 (vii) the overall default rate, as well as the overall default for 49 such debts associated with each school listed under subparagraph (i) 50 of this paragraph]; 51 (viii) the total dollar amount and number of private education debts 52 [that defaulted for reasons other than non-payment in the prior 53 fiscal year, as applicable; 54 (ix) the total dollar amount and number of private education debts 55 with a cosigner, as applicable; 
 S. 2680 4 1 (x) the total dollar amount and number of private education debts 2 secured, made, or extended with a cosigner in the prior fiscal year, as 3 applicable; 4 (xi) the total dollar amount and number of private education debts 5 secured, made, or extended] created to refinance other private education 6 debts or federal student loans, respectively[, as applicable]; 7 [(xii)] (ix) the total dollar amount and number of private education 8 debts [secured, made, or extended] created to refinance other private 9 education debts or federal student loans, respectively, in the prior 10 [fiscal] calendar year[, as applicable]; 11 [(xiii)] (x) the total dollar amount and number of defaulted private 12 education debts for which the [private education creditor has sued to 13 collect] student loan servicer commenced, maintained, or settled a 14 lawsuit for collection in the prior [fiscal] calendar year[, as applica- 15 ble]; and 16 [(xiv) additional] (xi) information as may in the judgment of the 17 superintendent be necessary and appropriate in order to assess the total 18 size and status of the private education debt market and to assess 19 borrower well-being[; and 20 (xv) A copy of any model promissory note, agreement, contract or other 21 instrument used by a private education creditor during the previous 22 fiscal year to substantiate that a new private education debt has been 23 extended to the consumer or that a consumer owes a debt or obligation to 24 the private education creditor. 25 (b) For private education creditors that acquire or assume private 26 education debts owed by a consumer residing in this state, relating to 27 such debts as of the end of the prior fiscal year: 28 (i) a list of all schools for which such private education debts were 29 used to finance higher education, including, in the case of a refinanc- 30 ing loan, the school that the consumer attended using the private educa- 31 tion debt that was refinanced; 32 (ii) the total outstanding dollar amount and number of such private 33 education debts and number of consumers who owe such private education 34 debts; 35 (iii) the total dollar amount and number of private education debts 36 associated with each school identified under subparagraph (i) of this 37 paragraph; 38 (iv) the total dollar amount and number of private education debts 39 acquired or assumed in the prior fiscal year; 40 (v) the total dollar amount and number of private education debts 41 acquired or assumed in the prior fiscal year associated with each school 42 identified under subparagraph (i) of this paragraph; 43 (vi) the overall default rate, as well as the overall default for such 44 debts associated with each school listed under subparagraph (i) of this 45 paragraph; 46 (vii) the total dollar amount and number of private education debts 47 that defaulted for reasons other than nonpayment in the prior fiscal 48 year, as applicable; 49 (viii) the total dollar amount and number of private education debts 50 with a cosigner, as applicable; 51 (ix) the total dollar amount and number of private education debts 52 that were used to refinance other private education debts, as applica- 53 ble; 54 (x) the total dollar amount and number of private education debts for 55 which the private education creditor has sued to collect in the prior 56 fiscal year, as applicable; and 
 S. 2680 5 1 (xi) additional information as may in the judgment of the superinten- 2 dent be necessary and appropriate in order to assess the total size and 3 status of the private education debt market and to assess borrower well- 4 being. 5 (c) For private education creditors that are providers of higher 6 education and whose private education debts result from unpaid debts or 7 obligations that were not extensions of credit and that result from 8 higher education provided in this state, relating to such debts as of 9 the end of the prior fiscal year, reported by race and gender: 10 (i) the total outstanding dollar amount and number of private educa- 11 tion debts and number of consumers who owe those debts; 12 (ii) the total dollar amount and number of private education debts 13 accrued and number of consumers who owe those debts in the prior fiscal 14 year; 15 (iii) the total number and balance of student accounts with an academ- 16 ic or administrative hold resulting from a private education debt; 17 (iv) the total number and balance of student accounts with an academic 18 or administrative hold resulting from a private education debt for which 19 a payment was made in the prior fiscal year and average payment made; 20 (v) the total number of student accounts for which federal financial 21 aid was returned to the federal government upon the student's withdrawal 22 from the provider of higher education in the prior fiscal year, and the 23 total dollar amount of any private education debt accrued as a result; 24 (vi) the number of consumers who owe a private education debt who 25 received a federal pell grant and the average debt owed; 26 (vii) the number of consumers who owe a private education debt who are 27 considered in-state and out-of-state students, and the total debt owed 28 by each group; 29 (viii) the total dollar amount, number of private education debts, and 30 number of consumers for which the private education creditor has in the 31 prior fiscal year (A) charged off the debt, (B) sent the debt to a third 32 party collection agency, (C) initiated a collection lawsuit, (D) 33 reported the debt to a consumer credit reporting agency, and (E) sold 34 the debt; 35 (ix) the total dollar amount, number of private education debts, and 36 number of consumers for which the private education creditor has, in the 37 prior fiscal year, collected on a private education debt in the follow- 38 ing instances: (A) payment arrangements wherein the payment was not 39 considered past due, such as tuition installment agreements; (B) 40 payments made on past due debts during the same academic term or billing 41 cycle in which the debt accrued and before such debts were sent to a 42 collection agency; (C) payments made on past due debts before they were 43 sent to a collection agency, excluding those payments made during the 44 same academic term or billing cycle in which the debt accrued; (D) a 45 third party collection agency, prior to initiating a lawsuit; and (E) a 46 collection lawsuit, including payments made by settlement or pursuant to 47 a judgment; 48 (x) additional information as may in the judgment of the superinten- 49 dent be necessary and appropriate in order to assess the total size and 50 status of the private education debt market and to assess borrower well- 51 being; and 52 (xi) a copy of any model written instrument used by a provider of 53 higher education in the prior fiscal year to substantiate a private 54 education debt, including but not limited to a promissory note, enroll- 55 ment agreement, or contract.] 
 S. 2680 6 1 4. Not later than [one year] two years following the effective date of 2 this section, the superintendent shall create a publicly accessible 3 website that includes at least the following information [about private 4 education creditors registered in this state]: 5 (a) The name, address, telephone number and website for all[ private 6 education creditors] student loan servicers; and 7 (b) A summary of the information required by subdivision [three] one 8 of this section[; and 9 (c) Copies of all documents provided under subparagraph (xv) of para- 10 graph (a) of subdivision three of this section and subparagraph (xi) of 11 paragraph (c) of subdivision three of this section]. 12 § 904. Violations. 1. If the superintendent finds, after notice and 13 hearing, that a [private education creditor] student loan servicer has 14 knowingly violated this article by failing to comply with any [registra- 15 tion or] reporting requirement or by knowingly furnishing materially 16 inaccurate information to the superintendent, the superintendent may 17 impose a civil penalty of not more than ten thousand dollars for each 18 violation. 19 2. The superintendent may order that any person who has been found to 20 have knowingly violated any provision of this article, or of the rules 21 and regulations issued pursuant thereto, and has thereby caused finan- 22 cial harm to consumers, be barred for a term not exceeding ten years 23 from acting as a [private education creditor] student loan servicer, or 24 a stockholder, or an officer, director, partner or other owner, or an 25 employee of a [private education creditor] student loan servicer. 26 § 2. This act shall take effect on the same date and in the same 27 manner as a chapter of the laws of 2024 amending the financial services 28 law relating to creating a private education debt registry, as proposed 29 in legislative bills numbers S. 8197 and A. 8913, takes effect.