NY Banking L § 716 (2021)
2021 New York Laws BNK - Banking Article 14-A - Student Loan Servicers 716 - Grounds for Suspension or Revocation of License.

§  716.  Grounds  for  suspension  or  revocation of license. 1. After notice and hearing, the superintendent may revoke or suspend any license to engage in the business of a student loan servicer issued pursuant  to this article if he or she shall find that:  (a) a servicer has violated any provision of this article, any rule or regulation  promulgated  by  the  superintendent  under  and  within the authority of this article, or any other applicable law;  (b) any fact or condition exists which, if it had existed at the  time of  the  original application for such license, would have warranted the superintendent refusing originally to issue such license;  (c) a servicer does not cooperate with an examination or investigation by the superintendent;  (d) a servicer engages in  fraud,  intentional  misrepresentation,  or gross negligence in servicing a student loan;  (e)  the  competence, experience, character, or general fitness of the servicer, an individual controlling, directly or indirectly, ten percent or more of the outstanding interests,  or  any  person  responsible  for servicing  a  student  loan for the servicer indicates that it is not in the public interest to permit the servicer to continue servicing student loans;  (f) the servicer engages in an unsafe or unsound practice;  (g) the servicer is insolvent, suspends payment of its obligations, or makes a general assignment for the benefit of its creditors; or  (h) a servicer has violated the laws of this state, any other state or any federal law involving fraudulent or dishonest dealing,  or  a  final judgement  has  been  entered against a student loan servicer in a civil action upon grounds of fraud, misrepresentation or deceit.   2. The superintendent may, on good cause shown, or where  there  is  a substantial  risk  of  public harm, suspend any license for a period not exceeding thirty days, pending investigation. "Good cause", as  used  in this subdivision, shall exist when a student loan servicer has defaulted or  is  likely  to  default  in  performing its financial engagements or engages  in  dishonest  or  inequitable  practices   which   may   cause substantial harm to the persons afforded the protection of this article.   3.  Except  as provided in subdivision two of this section, no license shall be revoked or suspended except after notice and  hearing  thereon. Any order of suspension issued after notice and a hearing may include as a  condition  of  reinstatement  that  the  student  loan  servicer make restitution to consumers of  fees  or  other  charges  which  have  been improperly  charged  or  collected,  including  but  not  limited  to by allocating payments contrary to a borrower's direction or  in  a  manner that  fails  to  help  a  borrower  avoid  default, as determined by the superintendent. Any hearing held pursuant  to  the  provisions  of  this section  shall be noticed, conducted and administered in compliance with the state administrative procedure act.   4. Any student loan servicer may surrender any license  by  delivering to  the  superintendent  written  notice that it thereby surrenders such license, but such surrender shall not affect such  servicer's  civil  or criminal  liability  for acts committed prior to such surrender. If such surrender is  made  after  the  issuance  by  the  superintendent  of  a statement  of  charges  and  notice  of  hearing, the superintendent may proceed against the servicer as if such surrender had not taken place.   5. No revocation, suspension, or surrender of any license shall impair or affect the obligation of any pre-existing lawful contract between the student loan servicer  and  any  person,  including  the  department  of financial services.    6. Every license issued pursuant to this article shall remain in force and  effect  until  the  same  shall  have  been surrendered, revoked or suspended in accordance with any other provisions of this article.   7.  Whenever  the  superintendent  shall  revoke  or suspend a license issued pursuant to this article, he or she shall  forthwith  execute  in duplicate  a written order to that effect. The superintendent shall file one copy of such order  in  the  office  of  the  department  and  shall forthwith  serve the other copy upon the student loan servicer. Any such order may be reviewed in the manner provided by article seventy-eight of the civil practice law and rules.