On July 1st, 2018, the California Student Loan Servicing Act comes in to effect licensing financial professionals that service student loans. Per the statute the Act will “prohibit a person from engaging in the business of servicing a student loan in this state, directly or indirectly, without a license, unless exempt from the licensing requirement, and would require compliance with reporting, auditing, and other oversight by the Commissioner of Business Oversight.The applicant must provide a California student loan servicer surety bond and sign the application under penalty of perjury. The law imposes on each licensee administrative duties. He or she must file reports with the Commissioner under oath, pay to the Commissioner its pro rata share of all costs and expenses reasonably incurred in the administration of these provisions, as estimated by the Commissioner. The law requires an applicant applying for a license to complete a formal application, pay an application fee (one hundred dollars ($100) as a fee for investigating the application, plus the cost of fingerprint processing and the criminal history record check, and three hundred dollars ($300) as an application fee.
Section 28142. (a) of the state code states that, “a licensee shall maintain a surety bond in accordance with this section in a minimum amount of twenty-five thousand dollars ($25,000). The bond shall be payable to the commissioner and issued by an insurer authorized to do business in this state (California). An original surety bond, including any and all riders and endorsements executed subsequent to the effective date of the bond, shall be filed with the Commissioner within 10 days of execution. For licensees with multiple licensed locations, only one surety bond is required. The bond shall be used for the recovery of expenses, fines, and fees levied by the Commissioner in accordance with this division or for losses or damages incurred by borrowers as the result of a licensee’s noncompliance with the requirements of this division.
(b) When an action is commenced on a California student loan servicer surety bond, the Commissioner may require the filing of a new bond. Immediately upon recovery of any action on the bond, the licensee shall file a new bond. Failure to file a new bond within 10 days of the recovery on a bond, or within 10 days after notification by the commissioner that a new bond is required, constitutes sufficient grounds for the suspension or revocation of the license.
(c) The commissioner may require a higher bond amount for a licensee based on the dollar amount of servicing of student loans by that licensee.”
The California Department of Business Oversight is the licensing and regulatory authority over student loan servicers. Applications and inquires may be directed to:
DBO MAIN OFFICE
1515 K Street, Suite 200, Sacramento, CA 95814-4052
916-445-7205
(866) 275-2677
California surety leader, Surety One, Inc. is a specialist in the bonding needs of the financial services sector. We offer both the surety and fidelity bonds needed by these professionals in ALL fifty states, Puerto Rico and the U.S. Virgin Islands. Visit us at SuretyOne.com, call (800) 373-2804, or email us at Underwriting@SuretyOne.com for a California student loan servicer surety bond application or information on ANY bonding need. También recuerden que nuestra asesoría está disponible en SU idioma.
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