New York Codes, Rules and Regulations › Title 3 - BANKING › Chapter III - SUPERINTENDENT'S REGULATIONS › Subchapter B - NON-BANKING ORGANIZATIONS › Part 409 - STUDENT LOAN SERVICERS › Section 409.7 - Suspension and revocation of a license

Current through Register Vol. 46, No. 28, July 10, 2024
(a) After a hearing. After notice and
				  hearing, the superintendent may revoke or suspend any license to engage in the
				  business of servicing student loans if she finds that:
(1) a student loan servicer has violated any
				  provision of Article 14-A of the banking law, any provision of this part, or
				  any other applicable law;
(2) 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;
(3) a student loan servicer does not
				  cooperate with an examination or investigation by the superintendent;
(4) a student loan servicer engages in fraud,
				  intentional misrepresentation, or gross negligence in servicing a student
				  loan;
(5) the competence,
				  experience, character, or general fitness of the student loan servicer, a
				  person controlling, directly or indirectly, ten percent or more of the
				  outstanding interests, or any person responsible for servicing a student loan
				  for the student loan servicer indicates that it is not in the public interest
				  to permit the student loan servicer to continue servicing student
				  loans;
(6) the student loan
				  servicer engages in an unsafe or unsound practice;
(7) the student loan servicer is insolvent,
				  suspends payment of its obligations, or makes a general assignment for the
				  benefit of its creditors;
(8) a
				  student loan 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;
(9) a student loan servicer fails to comply
				  with any of the servicing standards set forth in section 409.8  of this part;
				  or
(10) a student loan servicer
				  engages in a prohibited practice in violation of section 409.9  of this part.
				  (b) Emergency Suspension.
(1) The
				  superintendent may suspend a student loan servicer license on an emergency
				  basis for a period not exceeding thirty days if:
(i) the superintendent finds that there is a
				  substantial risk of public harm; or
(ii) the superintendent finds that there is
				  good cause for such a suspension on the basis that:
(a) the student loan servicer has defaulted
				  or is likely to default in performing its financial engagements; or
(b) the student loan servicer has engaged, or
				  is engaging, in dishonest or inequitable practices which may cause substantial
				  harm to borrowers or the student loan servicer market, including by taking any
				  action prohibited by subdivision (a) of section 409.9  of this part.
(2) When the
				  superintendent suspends a license pursuant to this subdivision she shall
				  thereafter provide notice to the licensee.
(3) The superintendent may renew an emergency
				  suspension under this subdivision if such additional emergency suspension is
				  accompanied by notice of a hearing to be conducted under subdivision (a) of
				  this section within the period of such additional suspension. If such a hearing
				  is delayed at the request or with the consent of the licensee, the licensee
				  shall be deemed to consent to the continuation of the emergency suspension
				  during the ensuing period ending upon a determination on the hearing.