N.Y. Comp. Codes R. & Regs. tit. 3 § 409.7

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

Section 409.7 - Suspension and revocation of a license

(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.

N.Y. Comp. Codes R. & Regs. Tit. 3 § 409.7

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