New York Codes, Rules and Regulations › Title 8 - EDUCATION DEPARTMENT › Chapter XX - Higher Education Services Corporation › Subchapter A - Administration › Part 2004 - Limitation, Suspension Or Termination Of Approval Of Loan Or Loan Guarantee Applications › Section 2004.5 - Suspension

Current through Register Vol. 46, No. 28, July 10, 2024
(a) Scope and
				  duration. A suspension may affect all aspects of an institution's or lender's
				  participation in programs under this Chapter or only a portion thereof. The
				  duration of a suspension may be set to extend until the president has
				  determined that the basis for the suspension has been removed and that a
				  repetition of such violation appears unlikely; provided, however, that the
				  period of suspension shall not exceed 60 days, unless the institution or lender
				  and the president agree to an extension or unless limitation or termination
				  procedings are initiated pursuant to section
				  2004.6 
				  of this Part within this period of time, in which case the period of suspension
				  may be extended until the completion of such proceedings.
(b) Procedures.
(1) Except as provided in subdivision (c) of
				  this section, suspensions shall only be made pursuant to notice and opportunity
				  to show cause as provided in this paragraph.
(2) Suspension proceedings shall be initiated
				  by the president mailing to the institution or lender in question, a notice, by
				  certified mail with return receipt requested:
(i) informing the institution of the
				  corporation's intent to suspend the institution's or lender's eligibility and
				  of the basis for such action;
(ii)
				  specifying the proposed effective date of the suspension and the consequences
				  of such action; and
(iii) informing
				  the institution or lender of its rights, if exercised within a stated period of
				  time, to submit written material and to request a meeting before the president
				  or president's designee to show cause why such action should not be taken,
				  prior to the time of suspension becomes effective. The notice shall also
				  provide information about the nature of the meeting and such other information
				  about the matter as the president may determine appropriate. The notice shall
				  also invite voluntary efforts to correct the violation which led to the
				  initiation of these proceedings.
(3) The proposed effective date for
				  suspension provided for in paragraph (2) of this subdivision shall not be less
				  than 15 days after the notice of intent has been sent. The period of time
				  within which the institution or lender may submit written material or request a
				  meeting to show cause shall not be less than 10 days after such notice has been
				  sent. If such a meeting is requested, the president shall set a time and place
				  for it, which time shall not be less than five days nor more than 30 days after
				  the request is received by him. If a meeting is requested, but it cannot be
				  held prior to the proposed effective date of suspension, the date shall be
				  postponed until the completion of such meeting.
(4) The president shall consider any timely
				  material presented to him in writing, any material presented to him during the
				  course of the informal meeting provided for in paragraph (3) of this
				  subdivision and any showing that the institution or lender has adequately
				  corrected the violation which led to the initiation of suspension proceedings.
				  If, after considering such material, the president concludes that the
				  institution or lender has failed to show cause why its eligibility should not
				  be suspended, he may suspend eligibility in whole or part and subject to such
				  terms and conditions as he shall specify. Notice of such suspension shall be
				  promptly transmitted to the institution or lender and shall become effective
				  upon the date of transmittal. The institution of suspension proceedings or any
				  suspension imposed shall not operate to waive the corporation's right to take
				  action based upon the violations found to exist, including but not limited to
				  the taking of limitation or termination proceedings or the imposition of such
				  sanctions.