An Act To Establish a Student Loan Bill of Rights To License and Regulate Student Loan Servicers
Maine Legislature, Session 129, LD 0995
Committee Amendment CA_A_S225 (Senate)
Amends: 9-A MRSA §1

COMMITTEE AMENDMENT " A " to S.P. 285, L.D. 995, Bill, "An Act To 
Establish a Student Loan Bill of Rights To License and Regulate Student Loan Servicers" 
Amend the bill by inserting after the enacting clause and before section 1 the 
following: 
'Sec. 1. 9-A MRSA §1-202, sub-§7, as amended by PL 2005, c. 55, §1, is further 
amended to read: 
7. 
A Except as provided by Article 14, a loan or consumer credit sale made 
exclusively for the purpose of deferring or financing educational expenses and on which 
the finance charge does not exceed that rate per year on the unpaid balances of the 
amount financed, as established by federal law, or, for loans or consumer credit sales for 
which federal law does not establish a rate, the highest rate established for educational 
loans under any federal program and which is insured, guaranteed, subsidized or made 
directly by the Federal Government, a state, a nonprofit private loan guaranty or 
organization, by the educational institution itself or through an endowment or trust fund 
affiliated with such an institution;' 
Amend the bill in section 1 in § 14-103 by striking out all of subsection 1 (page 1, 
lines 17 to 23 in L.D.) and inserting the following: 
'1. Servicing. "Servicing" means: 
A. Receiving any scheduled periodic payments from a student loan borrower or 
notification of such payments and applying the payments to the student loan 
borrower's account pursuant to the terms of a student education loan or to the terms of 
the contract governing the servicing of the student education loan; 
B. During a period when a payment is not required on a student education loan, 
maintaining account records for a student education loan and communicating with a 
student loan borrower regarding the loan on behalf of the loan's holder; or 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" J; "to S.P. 285, L.D. 995 
C. Interactions with a student loan borrower, including activities to help prevent 
default on obligations arising from student education loans, conducted to facilitate 
any of the activities described in paragraph A or B.' 
Amend the bill in section 1 in § 14-104 in subsection 1 in the first line (page 2, line 16 
in L.D.) by striking out the following: "from" and inserting the following: 'between' 
Amend the bill in section 1 in § 14-104 in subsection 1 by striking out all of paragraph 
B (page 2, lines 18 to 20 in L.D.) and inserting the following: 
'B. Student loan servicers or any other participants in student education loan lending, 
including, but not limited to, originators servicing their own student education loans. 
The ombudsman may collaborate with institutions of higher education to attempt to 
resolve complaints;' 
Amend the bill in section 1 in §14-105 in subsection 2 in the last line (page 3, line 18 
in L.D.) by striking out the following: "and" 
Amend the bill in section 1 in §14-105 by striking out all of subsection 3 (page 3, 
lines 19 to 21 in L.D.) and inserting the following: 
'3. Funding. An accounting of the funding for the program, including the license, 
examination and investigation fees collected pursuant to this Article. and whether those 
funds are adequate for or are in excess of the costs of carrying out the duties of this 
Article; and 
4. 
Additional steps. 
Recommendations regarding additional steps for the 
Department of Professional and Financial Regulation to gain regulatory control over 
licensing and enforcement with respect to student loan servicers.' 
Amend the bill in section 1 in § 14-107 in subsection 2 by striking out all of paragraph 
A (page 4, lines 15 to 18 in L.D.) and inserting the following: 
'A. 
Financial statements and references of all applicants for a license as the 
superintendent considers necessary;' 
Amend the bill in section 1 in §14-107 in subsection 2 by inserting at the end a new 
blocked paragraph to read: 
'The superintendent may require or allow applications to be made electronically through 
the nationwide mortgage licensing system and registry, as defined in section 13-102, 
subsection 8. An applicant using that system shall pay any required processing fees.' 
Amend the bill in section 1 in §14-107 in subsection 4 in the last line (page 5, line 33 
in L.D.) by inserting after the following: 
"superintendent." the following: 
'If the 
superintendent permits or requires licensing through the nationwide mortgage licensing 
system and registry pursuant to subsection 2, the superintendent may amend the license 
term and license expiration date to comply with the parameters of the system. License 
and investigation fees must be apportioned so the average of such fees does not increase 
on an annualized basis.' 
Amend the bill in section 1 in § 14-107 by striking out all of subsection 9 (page 6, 
lines 23 to 29 in L.D.) and inserting the following: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" H "to S.P. 285, L.D. 995 ( c)-aJ.S) 
'9. Automatic licensure. The superintendent shall issue automatically a limited, 
irrevocable license to a person servicing a student loan under contract with the United 
States Department of Education as follows. 
A. A person seeking to act within this State as a student loan servicer is exempt from 
the procedures described in subsection 2, except for subsection 2, paragraphs C and 
D, upon a determination by the superintendent that student loan servicing performed 
in this State is solely conducted pursuant to a contract or contracts awarded by the 
United States Secretary of Education under 20 United States Code, Section 1087f. 
The procedure to document eligibility for such an exemption must be prescribed by 
the superintendent. 
B. The superintendent shall issue automatically a license to a person determined 
exempt by the superintendent pursuant to paragraph A; that person is deemed to have 
met all of the requirements of subsection 3. 
C. A person issued a license pursuant to this subsection is exempt from subsections 4 
to 8. 
D. 
A person issued a license pursuant to this subsection shall provide the 
superintendent with written notice within 7 days following the notification of the 
expiration, revocation or termination of any contract awarded by the United States 
Secretary of Education under 20 United States Code, Section 1087f; that person has 
days to satisfy the requirements of this Article in order to continue to act as a 
student loan servicer within this State. Upon the expiration of the 30-day period, if 
the person seeking to act as a student loan servicer within this State has not satisfied 
all requirements established under this Article, the superintendent shall immediately 
suspend any license issued under this subsection. 
E. 
With respect to student loan servicing not conducted pursuant to a contract 
awarded by the United States Secretary of Education under 20 United States Code, 
Section 1087f, this subsection does not prevent the superintendent from issuing an 
order to temporarily or permanently prohibit or bar a person from acting as a student 
loan servicer. 
F. With respect to student loan servicing conducted pursuant to a contract awarded 
by the United States Secretary of Education under 20 United States Code, Section 
1087f, this subsection does not prevent the superintendent from issuing a cease and 
desist order or injunction against a student loan servicer to cease activities in 
violation of this Article or the Maine Unfair Trade Practices Act. 
10. Branch office license; change of license notification. A licensee under this 
Article may not act within this State as a student loan servicer under any name or at any 
7 
place of business other than those named in the license. Any change of location of a 
place of business of a licensee requires prior written notice to the superintendent. Not 
more than one place of business may be maintained under the same license, but the 
superintendent may issue more than one license to a licensee that complies with the 
provisions of this Article as to each license. If a licensee desires to carry on business in 
more than one location, the licensee shall procure a branch office license for each 
additional location where the business is to be conducted. A license is not transferable or 
assignable.' 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT").\ "to S.P. 285, L.D. 995, 
Amend the bill in section 1 in § 14-107 by renumbering the subsections to read 
consecutively. 
Amend the bill in section 1 in § 14-108 by striking out all of subsection 2 (page 7, 
lines 14 to 40 and page 8, lines 1 to 14 in L.D.) and inserting the following: 
'2. Requirements. Except as otherwise provided in federal law, a federal student 
education loan agreement or a contract between the Federal Government and a student 
loan servicer, a student loan servicer shall comply with the requirements of this 
subsection. 
A. 
Upon receipt of a written inquiry from a student loan borrower or the 
representative of a student loan borrower, a student loan servicer shall respond by: 
(1) Acknowledging receipt of the written inquiry within 10 days; and 
(2) Providing, within 30 days after receiving the inquiry, information relating to 
the inquiry and, if applicable, the action the student loan servicer will take to 
correct the student loan borrower's account or an explanation of the student loan 
servicer's position that the borrower's account is correct. 
B. A student loan servicer shall inquire of a student loan borrower how to apply an 
overpayment or prepayment to a student loan. A student loan borrower's direction on 
how to apply an overpayment or prepayment to a student loan must stay in effect for 
any future overpayments or prepayments during the term of a student loan until the 
borrower provides different directions. 
For purposes of this paragraph, 
"overpayment" or "prepayment" means a payment on a student loan in excess of the 
monthly amount due from a borrower on a student loan. 
C. 
A student loan servicer shall apply a partial payment or underpayment in a 
manner that minimizes late fees and negative credit reporting. When loans on a 
student loan borrower's account have an equal stage of delinquency, a student loan 
servicer shall apply a partial payment or underpayment to satisfy as many individual 
loan payments as possible on a borrower's account. For purposes of this paragraph, 
"partial payment" or "underpayment" means a payment on a student loan account that 
contains multiple individual loans in an amount less than the amount necessary to 
satisfy the outstanding payment due on all loans in the student loan account. 
D. In the event of the sale, assignment or other transfer of the servicing of a student 
education loan that results in a change in the identity of the person to whom a student 
loan borrower is required to send payments or direct any communication concerning 
the student education loan: 
(1) As a condition of the sale, assignment or transfer, the student loan servicer 
shall require the new student loan servicer to honor all benefits originally 
represented as available to the student loan borrower during the repayment of the 
student education loan and preserve the availability of such benefits, including 
any benefits for which the student loan borrower has not yet qualified; 
(2) Within 45 days after the sale, assignment or transfer, the student loan servicer 
shall transfer to the new student loan servicer all information regarding the 
student loan borrower, the account of the student loan borrower and the student 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT"{) "to S.P. 285, L.D. 995 ( \ 
;)','). ~) 
.1 
education loan of the student loan borrower, including the repayment status of the 
·, '2 
student loan borrower and any benefits associated with the student education loan 
of the student loan borrower; and 
(3) The sale, assignment or transfer of the servicing of the student education loan 
must be completed at least 7 days before the next payment on the loan is due. 
E. A student loan servicer that obtains the right to service a student education loan 
shall adopt policies and procedures to verify that the student loan servicer has 
received all information regarding the student loan borrower, the account of the 
student loan borrower and the student education loan of the student loan borrower, 
including, but not limited to, the repayment status of the student loan borrower and 
any benefits associated with the student education loan of the student loan borrower. 
F. A student loan servicer shall evaluate a student loan borrower for a repayment 
program based on income prior to placing the borrower in forbearance or default, if a 
repayment program based on income is available to the borrower.' 
Amend the bill in section 1 in §14-108 in subsection 3 in paragraph Hin the last line 
(page 8, line 38 in L.D.) by striking out the following: "agency; or" and inserting the 
following: 'agency;' 
Amend the bill in section 1 in §14-108 in subsection 3 by striking out all of paragraph 
I (page 8, lines 39 to 41 in L.D.) and inserting the following: 
'I. 
Fail to respond within 15 days to communication from the student loan 
ombudsman, or within a shorter reasonable time as the student loan ombudsman may 
request in the communication; or 
J. Fail to respond within 15 days to a student loan borrower complaint submitted to 
the servicer by the student loan ombudsman. If necessary, a student loan servicer may 
request additional time, up to 45 days, as long as the request is accompanied by an 
explanation of why additional time is reasonable and necessary.' 
Amend the bill in section 1 by adding at the end the following: 
'§14-111. Funding 
The superintendent shall internally track any license, examination and investigation 
fees collected pursuant to this Article and any funds received from any public or private 
source. The superintendent shall use these funds to cover the costs of carrying out the 
duties of this Article, and funds received may not be used for any other purpose.' 
Amend the bill by inserting after section 1 the following: 
'Sec. 2. Appropriations and allocations. The following appropriations and 
allocations are made. 
PROFESSIONAL AND FINANCIAL REGULATION, DEPARTMENT OF 
Bureau of Consumer Credit Protection 0091 
Initiative: Provides allocation for expenses associated with the licensing, examination and 
investigation of student loan servicers, including travel, training, supplies and general 
operating expenses. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT'')+ "to S.P. 285, L.D. 995 ( . ",-
,;). ,y, '\! 
OTHER SPECIAL REVENUE FUNDS 
All Other 
OTHER SPECIAL REVENUE FUNDS TOTAL 
2019-20 
$9,300 
$9,300 
2020-21 
$18,600 
$18,600 
Amend the bill by relettering or renumbering any nonconsecutive Part letter or 
section number to read consecutively. 
SUMMARY 
This amendment makes the following changes to the bill. 
1. It makes the requirements for the filing of financial statements with an application 
for licensure as a student loan servicer consistent with licensure requirements for 
mortgage loan servicers. 
2. It clarifies that a license is required for each physical location where a student loan 
servicer does business. 
3. 
It authorizes the Superintendent of Consumer Credit Protection within the 
Department of Professional and Financial Regulation, Bureau of Consumer Credit 
Protection to require student loan servicers to file license applications electronically and 
to use the nationwide mortgage loan servicer licensing system and registry. 
4. It adds a provision authorizing the automatic licensure of student loan servicers 
under contract with the federal Department of Education. 
5. It provides that funding from license and investigation fees for student loan 
servicers may not be used for purposes other than to cover the costs of administering the 
Maine Revised Statutes, Title 9-A, Article 14. 
6. It replaces language in the bill with language from laws in other states regulating 
student loan servicing to maintain consistency. 
7. It adds an appropriations and allocations section. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 05/17 /19 ;Wac:;. 
LD995 
LR 137(02) 
An Act To Establish a Student Loan Bill of Rights To License and Regulate Student Loan Servicers 
Fiscal Note for Bill as Amended by Committee Amendment 'ti" Cs- 88--'~) 
Committee: Health Coverage, Insurance and Financial Services 
Appropriations/Allocations 
Other Special Revenue Funds 
Revenue 
Other Special Revenue Funds 
Fiscal Detail and Notes 
Fiscal Note Required: Yes 
Fiscal Note 
FY 2019-20 
FY 2020-21 
$9,300 
$18,600 
$28,900 
$39,200 
Projections 
FY 2021-22 
$18,600 
$39,200 
Projections 
FY 2022-23 
$18,600 
$39,200 
This bill requires the Superintendent of Consumer Credit to designate a student loan ombudsman within the 
Department of Professional and Financial Regulation (PFR) and establishes licensing and examination procedures for 
student loan services. PFR has indicated that the designation of a student loan ombudsman position can be fulfilled by 
an existing position and no additional personal services funds are needed for this purpose. PFR anticipates increased 
costs associated with the licensing, examination and investigation of student loan servicers. These costs include travel, 
training, supplies and general operating expenses. Accordingly, the bill includes Other Special Revenue Funds 
allocations of $9,300 in fiscal year 2019-20 and $18,600 in fiscal year 2020-21, assuming an effective date of January 
1, 2020. This increase in allocation coincides with additional revenues collected by PFR from an estimated 39 license 
applications and 5 examinations per year. 
Additional costs to the Finance Authority of Maine to assist the student loan ombudsman with complaints can be 
absorbed within existing budgeted resources. 
LR0137(02) - Fiscal Note - Page I of 1