2023 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.