§ 31–106.02c. Prohibited acts – private education lenders.

(a)(1) A private education loan executed after the applicability date of this section shall not include a provision that permits the private education lender to accelerate, in whole or in part, payments on a private education loan except in cases of payment default or place any loan or account into default or accelerate a loan for any reason other than for payment default.

(2) A private education loan executed prior to the applicability date of this section shall permit the private education lender to accelerate payments only if the promissory note or private education loan agreement explicitly authorizes an acceleration and only for the reasons stated in the note or agreement.

(3) In the event of the death of a cosigner, the lender shall not attempt to collect against the cosigner's estate other than for payment default.

(4) Upon receiving notification of the death or bankruptcy of a cosigner, when the private education loan is not more than 60 days delinquent at the time of the notification, the private education lender shall not change any terms or benefits under the promissory note, repayment schedule, repayment terms, or monthly payment amount or any other provision associated with the private education loan.

(5) A private education lender shall not place any private education loan or account into default or accelerate a private education loan while a student loan borrower is seeking a loan modification or enrollment in a flexible repayment plan; except, that a private education lender may place a private education loan or account into default or accelerate a private education loan for payment default 90 days after the student loan borrower's default.

(b) A private education lender shall not:

(1) Directly or indirectly employ any scheme, device, or artifice to defraud a student loan borrower;

(2) Directly or indirectly employ any scheme, device, or artifice to mislead a student loan borrower;

(3) Engage in any unfair or deceptive practice toward any person or misrepresent or omit any material information in connection with the servicing of a private education loan, including, abusive acts and practices;

(4) Obtain property by fraud;

(5) Obtain property by misrepresentation;

(6) Misapply private education loan payments to the outstanding balance of a private education loan;

(7) Provide inaccurate information to a credit bureau, thereby harming a student loan borrower's creditworthiness;

(8) Fail to report both the favorable and unfavorable payment history of the student loan borrower to a nationally recognized consumer credit bureau at least annually if the private education lender regularly reports information to a credit bureau;

(9) Refuse to communicate with an authorized representative of the student loan borrower who provides a written authorization signed by the student loan borrower; except, that the private education lender may adopt procedures reasonably related to verifying that the representative is authorized to act on behalf of the student loan borrower;

(10) Make any false statement or make any omission of a material fact in connection with any information or reports filed with a governmental agency or in connection with any investigation conducted by the Commissioner or another governmental agency;

(11) Fail to respond within 15 business days to communications from the Department or the Office of the Attorney General, or within such shorter reasonable period of time as may be requested by the Commissioner or the Attorney General; or

(12)(A) Fail to respond within 15 business days to a consumer complaint transmitted to the private education lender by the Department or the Office of the Attorney General.

(B) A private education lender may request additional time to respond to the complaint, up to a maximum of 45 business days, provided that the request is accompanied by an explanation as to why additional time is reasonable and necessary.