N.Y. Comp. Codes R. & Regs. tit. 3 § 409.6

Current through Register Vol. 46, No. 43, October 23, 2024

Section 409.6 - Change in control application; prior approval

(a) Definition of Control.

(1) As used in this part the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a student loan servicer, whether through the ownership of voting stock of such student loan servicer, the ownership of voting stock of any person which possesses such power, or otherwise.

(2) Control shall be presumed to exist if any person, directly or indirectly, owns, controls, or holds with power to vote ten percent or more of the voting stock of any student loan servicer or of any person which, directly or indirectly, owns, controls, or holds with power to vote ten percent or more of the voting stock of any student loan servicer, but no person shall be deemed to control a student loan servicer solely by reason of being an officer or director of such student loan servicer. Such presumption may not be rebutted except by a determination of the superintendent on an application under subdivision (g) of this section.

(3) As used in this section the term "person" means individual, partnership, firm, association, corporation, joint-stock company, trust, any similar entity or any combination of the foregoing acting in concert.

(4) As used in this part the term "substantial stockholder" means a person owning or controlling directly or indirectly ten percent or more of the total outstanding stock of a corporation.

(b) Prior Approval Required.

(1) Any action which results in a change of control of the business of a student loan servicer shall be void unless the superintendent has given prior approval of the act before it is taken.

(2) Prior to taking any action which results in any change of control of a student loan servicer, the person desiring to acquire control shall make a proposed amendment through NMLS consistent with the checklist and instructions for making such an amendment posted in NMLS and pay an investigation fee as prescribed pursuant to section eighteen-a of the banking law. After receiving the proposed amendment, the superintendent may require the person desiring to acquire control to submit any other information she determines necessary as a supplement thereto.

(c) Without limiting the responsibilities of persons seeking to acquire control of a student loan servicer to make application to the superintendent pursuant to section 715 of the banking law and this section, every student loan servicer shall report to the superintendent within five days of the date the student loan servicer becomes aware of such information, the name and residence of each person (or each member of a group of persons acting in concert) who becomes an owner of ten percent or more of the outstanding shares of any voting class of the student loan servicer and shall inform such person of the reporting requirements under this part.

(d) Application for a determination of control.

(1) The superintendent may in her discretion, upon the application of a student loan servicer or any person who, directly or indirectly, owns, controls, or holds with power to vote or seeks to own, control or hold with power to vote any voting stock of such student loan servicer, determine whether or not the ownership, control, or holding of such voting stock constitutes or would constitute control of such student loan servicer for purposes of this section.

(2) Such an application shall be in the form of a letter, containing a sworn statement under penalty of perjury by the person making the application that the contents of the letter are true, that sets forth all the information necessary for the superintendent to make the determination. Such information must at a minimum include:

(i) name and address of the person seeking a determination;

(ii) a detailed narrative description of the manner in which the person owns, controls, or holds, or seeks to own, control, or hold, voting stock of a student loan servicer;

(iii) the number of shares of each class of stock of the licensee and the amount (if any) of obligations of the licensee of which the person seeking a determination owns or intends to be beneficial owner;

(iv) an organizational chart showing the structure or the proposed structure of the ownership of the student loan servicer now or immediately after the proposed transaction to which the application relates, including anyone who controls the person seeking the determination; and

(v) any other information required by the superintendent as deemed necessary under the circumstances of the particular application.

(3) The superintendent may require the person making the application to supplement the information contained in the application as she, in her sole discretion, deems necessary to render a decision.

(e) Applications for prior approval under this section shall be approved or disapproved in accordance with the provisions of section 713 of the banking law and section 409.3 of this part.

(f) This section shall not apply to an exempt organization.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 409.6

Adopted New York State Register October 16, 2019/Volume XLI, Issue 42, eff. 10/16/2019