C.R.S.
Section 5-20-106
Licensure of student loan servicers
- definition
(1)
Automatic issuance of license for federal student loan servicing contractors.(a)
A person seeking to act within this state as a student loan servicer is exempt from the application procedures described in subsection (2) of this section upon a determination by the administrator that the person is a party to a contract awarded by the United States secretary of education under 20 U.S.C. sec. 1078, 1087f, or 1087hh, as amended. The administrator shall prescribe the procedure to document eligibility for the exemption.(b)
Automatic license.(I)
Automatically issue a license upon payment of the fees required by section 5-20-107 (1)(a);(II)
Automatically issue a renewal license upon payment of the fees required by section 5-20-107 (1)(b); and(III)
Deem the person to have met all requirements set forth in subsection (2) of this section.(c)
Procedural exemptions.(d)
Notice.(e)
Preservation of authorities.(2)
Other student loan servicers.(a)
A person seeking to act within this state as a student loan servicer, other than a person deemed exempt by the administrator pursuant to subsection (1) of this section, must apply to the administrator for an initial license in the form the administrator prescribes. The application must be accompanied by:(I)
A financial statement prepared by a certified public accountant or a public accountant, a general partner if the applicant is a partnership, a corporate officer if the applicant is a corporation, or a member duly authorized to execute financial statements if the applicant is a limited liability company or association;(II)
Information regarding the history of criminal convictions of the following:(A)
The applicant;(B)
Partners of the applicant, if the applicant is in a partnership;(C)
Members of the applicant, if the applicant is a limited liability company or association; or(D)
Officers, directors, and principal employees of the applicant, if the applicant is a corporation.(b)
The information submitted pursuant to subsection (2)(a)(II) of this section must be sufficient, as determined by the administrator, to make the findings required under this section.(3)
Investigation of applicant.(a)
Upon the filing of an application for an initial license and the payment of the fees for licensing and investigation pursuant to section 5-20-107, the administrator shall investigate the financial condition and responsibility, financial and business experience, character, and general fitness of the applicant.(b)
The administrator may issue a license pursuant to this section if the administrator finds that:(I)
The applicant’s financial condition is sound;(II)
The applicant’s business will be conducted honestly, fairly, equitably, carefully, and efficiently within the purposes and intent of this part 1 and in a manner commanding the confidence and trust of the community;(III)
If the applicant is:(A)
An individual, the individual is in all respects properly qualified and of good character;(B)
A partnership, each partner is in all respects properly qualified and of good character;(C)
A limited liability company or association, each member is in all respects properly qualified and of good character; or(D)
A corporation, the president, chair of the executive committee, senior officer responsible for the corporation’s business, chief financial officer or any other person who performs similar functions as determined by the administrator, each director, each trustee, and each shareholder owning ten percent or more of each class of the securities of the corporation are in all respects properly qualified and of good character;(IV)
No person acting on behalf of the applicant knowingly has made an incorrect statement of a material fact in the application or in any report or statement made pursuant to this part 1; and(V)
The applicant has met any other requirements as determined by the administrator.(4)
License expiration.(5)
License renewal - annual report.(a)
A license issued pursuant to this section may be renewed for the ensuing twelve-month period upon the filing of an application containing all required records and fees, including renewal fees as established by the administrator in accordance with section 5-20-107. A renewal application must be filed on or before January 31 of the year in which the license expires. The administrator may establish a late fee for any renewal applications submitted after January 31.(b)
If an application for a renewal license has been filed with the administrator on or before the date the license expires, the license sought to be renewed continues in effect until the issuance by the administrator of the renewal license applied for or until the administrator has notified the licensee in writing of the administrator’s refusal to issue the renewal license together with the grounds upon which the refusal is based.(c)
The administrator may refuse to issue a renewal license on any ground on which the administrator may refuse to issue an initial license.(d)
Along with the application for renewal, every licensee shall file with the administrator, in the form and manner determined by the administrator, an annual report concerning loans serviced by the licensee. Information included in an annual report filed pursuant to this subsection (5)(d) is confidential and may be published only in aggregate form, with no personal identifying information included.(6)
Dishonored check.(7)
Update application information.(8)
Incomplete application.(9)
Change of license notification.(a)
A licensee under this section shall not act within this state as a student loan servicer under any name or at any place of business other than those named in the license. A licensee shall give prior written notice to the administrator of a change of business location. A licensee shall not operate more than one place of business under the same license, but the administrator may issue more than one license to a licensee that complies with this part 1 as to each license. A license is not transferable or assignable.(b)
Intentionally left blank —Ed.(I)
Subject to rules adopted by the administrator, nothing in subsection (9)(a) of this section prohibits a licensee from permitting its employees to work from a remote location so long as the licensee:(A)
Ensures that no in-person customer interactions are conducted at the remote location and does not designate the remote location to consumers as a business location;(B)
Maintains appropriate safeguards for licensee and consumer data, information, and records, including the use of secure virtual private networks, also known as “VPNs”, where appropriate;(C)
Employs appropriate risk-based monitoring and oversight processes of work performed from a remote location and maintains records of the monitoring and oversight processes;(D)
Ensures consumer information and records are not maintained at a remote location;(E)
Ensures consumer and licensee information and records remain accessible and available for regulatory oversight and examination; and(F)
Provides appropriate employee training to ensure employees working from a remote location keep all conversations about and with consumers that are conducted from the remote location confidential, as if conducted from a commercial location, and to ensure that employees working at a remote location work in an environment that is conducive and appropriate to ensuring privacy and confidential conversations.(II)
As used in this subsection (9)(b), “remote location” means a private residence of an employee of a licensee or another location selected by the employee and approved by the licensee.(10)
Records retention - records request.(11)
License suspension and revocation - refusal to renew.(a)
The administrator may suspend, revoke, annul, limit, modify, or refuse to renew a license issued pursuant to subsection (2) of this section or take any other action in accordance with this part 1 if the administrator finds one or more of the following:(I)
The licensee has violated any provision of this part 1 or any rule lawfully adopted or order lawfully issued pursuant to and within the authority of this part 1; or(II)
Any fact or condition exists that, if it had existed at the time of the original application for the license, clearly would have warranted a denial of the license.(b)
An abatement of the license fee may not be made if the license is surrendered, revoked, or suspended.
Source:
Section 5-20-106 — Licensure of student loan servicers - definition, https://leg.colorado.gov/sites/default/files/images/olls/crs2023-title-05.pdf (accessed Oct. 20, 2023).
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