California § 1788.101

§ 1788.101.

(a) (1) A person shall not engage in abusive acts or practices when servicing a student loan in this state. (2) An act or practice is abusive in connection with the servicing of a student loan, if the act or practice does either of the following: (A) Materially interferes with the ability of a borrower to understand a term or condition of a student loan. (B) Takes unreasonable advantage of any of the following: (i) A lack of understanding on the part of a borrower of the material risks, costs, or conditions of the student loan. (ii) The inability of a borrower to protect the interests of the borrower when selecting or using either of the following: (I) A student loan. (II) A feature, term, or condition of a student loan. (iii) The reasonable reliance by the borrower on a person engaged in servicing a student loan to act in the interests of the borrower. (3) Abusive acts and practices include, but are not limited to, those described in paragraph (2). (b) A student loan servicer shall not do any of the following: (1) Directly or indirectly employ a scheme, device, or artifice to defraud or mislead a borrower. (2) Engage in an unfair or deceptive practice toward a borrower or misrepresent or omit material information in connection with the servicing of a student loan, including, but not limited to, misrepresenting the amount, nature, or terms of a fee or payment due or claimed to be due on a student loan, the terms and conditions of the student loan agreement, or the borrower’s obligations under the student loan. (3) Misapply payments made by a borrower to the outstanding balance of a student loan. (4) (A) If the student loan servicer is required to or voluntarily reports to a consumer reporting agency, fail to accurately report each borrower’s payment performance to at least one consumer reporting agency that compiles and maintains files on consumers on a nationwide basis, upon acceptance as a data furnisher by that consumer reporting agency. (B) For purposes of this paragraph, “consumer reporting agency that compiles and maintains files on consumers on a nationwide basis” has the same meaning as defined in the federal Fair Credit Reporting Act (15 U.S.C. Sec. 1681a(p)). (5) Refuse to communicate with an authorized representative of the borrower who provides a written authorization signed by the borrower, provided the student loan servicer may adopt reasonable procedures for verifying that the representative is in fact authorized to act on behalf of the borrower and for protecting the borrower from fraud or abusive practices. (6) Negligently or intentionally make a false statement or knowingly and willfully make an omission of a material fact in connection with information or reports filed with the department or another governmental agency. (7) Engage in an unfair or deceptive practice toward a military borrower or misrepresent or omit material information in connection with the servicing of a student loan owed by a military borrower. For purposes of this paragraph, “misrepresent or omit material information” includes, but is not limited to: (A) Misrepresenting or omitting the availability of a program or protection specific to military borrowers or applicable to military borrowers. (B) A misrepresentation or omission in violation of paragraph (2) of this subdivision. (8) Engage in an unfair or deceptive practice toward any borrower working in public service or misrepresent or omit material information in connection with the servicing of a student loan owed by a borrower working in public service. For purposes of this paragraph, “misrepresent or omit material information” includes, but is not limited to: (A) Misrepresenting or omitting the availability of a program or protection specific to borrowers working in public service or applicable to those borrowers. (B) A misrepresentation or omission in violation of paragraph (2). (9) Engage in an unfair or deceptive practice toward an older borrower or older cosigner or misrepresent or omit material information in connection with the servicing of a student loan owed or cosigned by an older borrower. For purposes of this paragraph, “misrepresent or omit material information” includes, but is not limited to: (A) Misrepresenting or omitting the availability of a program or protection specific to older borrowers or older cosigners or applicable to those borrowers or cosigners. (B) Misrepresenting or omitting the older borrower’s or older cosigner’s obligations under the student loan. (C) A misrepresentation or omission in violation of paragraph (2). (10) Engage in an unfair or deceptive practice toward a borrower with a disability or misrepresent or omit material information in connection with the servicing of a student loan owed by a borrower with a disability. For purposes of this paragraph, “misrepresent or omit material information” includes, but is not limited to: (A) Misrepresenting or omitting the availability of a program or protection specific to borrowers with disabilities or applicable to those borrowers. (B) A misrepresentation or omission in violation of paragraph (2) of this subdivision.