§ 31–106.02. Student loan servicer; licensure and reporting requirements.

(a) Except as provided in subsection (b) of this section, no person or entity shall operate as a student loan servicer in the District, directly or indirectly, without first obtaining a SLS license pursuant to this section.

(b) The following persons and entities shall be exempt from the requirements of subsection (a) of this section:

(1) A bank, trust company, or other loan company doing business under the authority of, or in accordance with, a license, certificate, or charter issued by the United States or any state, district, territory, or commonwealth of the United States that is authorized to transact business in the District;

(2) A federally chartered savings and loan association, federal savings bank, or federal credit union that is authorized to transact business in the District;

(3) A savings and loan association, savings bank, or credit union organized under the laws of the District or any other state that is authorized to transact business in the District; or

(4) A public postsecondary educational institution or a private nonprofit postsecondary educational institution servicing a student loan it extended to a student loan borrower.

(c)(1) Except as provided in subsection (b) of this section, a person or entity seeking to operate as a student loan servicer in the District shall apply for a SLS license by submitting to the Department:

(A) A completed application, in a form and manner prescribed by the Commissioner, that is signed under penalty of perjury;

(B) Application fees and other fees as prescribed by the Commissioner;

(C) Three years of audited financial statements prepared in accordance with generally accepted accounting principles and acceptable to the Department that show a net worth of at least $250,000;

(D) A surety bond in an amount determined by the Mayor to be used for the recovery of damages incurred by a student loan borrower as the result of a licensee's noncompliance with the requirements of this subchapter or the recovery of fees or expenses levied against a licensee pursuant to this subchapter; and

(E) Any other information the Commissioner considers necessary and appropriate as prescribed by rules issued pursuant to § 31-106.03.

(2) An applicant shall notify the Department in writing of any change in the information provided in the applicant's application for an initial SLS license or a renewal within 10 business days of the change having occurred. The failure to timely notify the Department of a change in the accuracy of the application may result in the denial of the application.

(d) The Commissioner shall issue a SLS license if the application meets all the requirements for licensure prescribed this subchapter and by the Commissioner by rule.

(e)(1)(A) A SLS license issued pursuant to this section before November 1 of a given year shall expire on December 31 of that same year, unless renewed or earlier surrendered, suspended, or revoked.

(B) A SLS license issued pursuant to this section on or after November 1 of a given year shall expire on December 31 of the following year, unless renewed or earlier surrendered, suspended, or revoked.

(2) No later than 15 days after a licensee ceases to engage in the business of being a student loan servicer, the licensee shall surrender the SLS license to the Commissioner, along with a signed notice of the surrender.

(3) The signed notice of surrender shall provide the:

(A) Location where the records of the licensee will be stored;

(B) Name, address, and telephone number of an individual authorized to provide access to the records; and

(C) Reason for the cessation of business.

(f) The surrender of a SLS license does not toll or eliminate a licensee's civil or criminal liability arising from acts or omissions occurring before the surrender of the SLS license, including any administrative actions undertaken by the Commissioner to revoke or suspend the SLS license.

(g)(1)(A) A SLS license may be renewed for a term prescribed by the Commissioner upon the timely filing of an application, along with all required documents and the payment of fees, as required by this section, or rules issued pursuant to this section.

(B) If an application for a renewal of a SLS license has been filed with the Department on or before the date the current SLS license expires, the current SLS license shall continue in full force and effect until the Commissioner issues a renewal or notifies the licensee in writing that the licensee's application for renewal has been denied, including the grounds for the denial.

(C) The Commissioner may deny an application for renewal of a SLS license on any ground that the Commissioner may deny an application for an initial SLS license.

(2) A SLS license shall not be transferable or assignable.

(h)(1) The Commissioner may revoke any license issued pursuant to this subchapter if, after notice and a hearing, the Commissioner finds that the licensee has:

(A) Committed any fraudulent acts, engaged in any dishonest activities, or made any misrepresentation in any business transaction;

(B) Been convicted of a felony under the laws of the District of Columbia, any state, or the United States;

(C) Violated any applicable banking laws of the District of Columbia, or any rules or regulations issued pursuant to any of those laws, or has violated any other law in the course of dealings as a licensee;

(D) Made a material misstatement in the application for a license under this subchapter;

(E) Demonstrated incompetency or untrustworthiness to act as a licensee;

(F) Violated any provision of this subchapter or of any implementing regulation; or

(G) Failed to satisfy any of the criteria for obtaining a license as set out in this subchapter.

(2) Whenever the Commissioner revokes a license issued pursuant to this subchapter, the Commissioner shall issue a written order setting forth the grounds for revocation, with a copy to be served on the licensee either personally or by mail to the last known address of the licensee.

(i) Pending the hearing required by subsection (h) of this section, the Commissioner may suspend the license for a period not to exceed 30 days if the Commissioner determines that the suspension is in the public interest and that one or more grounds for revocation of a license, as set forth in subsection (h) of this section, exist. Whenever the Commissioner suspends a license pursuant to this subsection, the Commissioner shall issue a written notice to the licensee setting forth, with particularity, the grounds for suspension and the licensee's right to a hearing, with a copy to be served on the licensee either personally or by mail to the last known address of the licensee.

(j)(1) Beginning January 30, 2018, and by January 30th, each year thereafter, a licensee shall file an annual report with the Commissioner, which shall include the number of loans that were sold, assigned, or transferred in the preceding calendar year and any other information that the Commissioner reasonably requires concerning the business operations conducted by the licensee during the preceding calendar year.

(2) The Department shall provide a copy of each report to the Mayor and the Council and make the reports available to the public by publishing them on the Department's website.