Rhode Island § 19-33-4 - Student Loan Bill of Rights Act

§ 19-33-4. Registration of student loan servicers.

(a) Each person or entity who or that services any student education loan issued to a student loan borrower after July 1, 2019, shall register with the department as a student loan servicer no later than September 30, 2019, or within thirty (30) days of conducting servicing of student education loans, whichever is earlier.

(b) The registration provisions of this chapter shall not apply to:

(1) Any person or entity who or that services fewer than six (6) student education loans in this state during any consecutive twelve-month (12) period; and

(2) Any person or entity that services loans for education other than postsecondary education.

(c) As part of that registration, the person or entity shall:

(1) Complete a registration in the form promulgated by the department providing the information requested by the application;

(2) Pay an annual registration fee of one thousand dollars ($1,000);

(3) Provide a bond in which the registrant shall be the obligor and which shall run to the state for the use of the state and of the person who may have a cause of action against the obligor of the bond under the provisions of this chapter. The bond shall be perpetual and shall be conditioned upon the obligor conforming to the provisions of this chapter and all regulations thereunder and the obligor will pay to the state and to any person all money that may become due or owing to the state or to the person from the obligor under the provisions of this chapter. The bond shall provide for notice directly to the department in the manner specified by the department if the bond is canceled by the surety for any reason. The bond shall be in the sum of fifty thousand dollars ($50,000);

(4) Appoint, and thereafter maintain, a resident agent in this state with authority to accept service of process for the registrant in this state, including the process of garnishment:

(i) Service of process upon the agent shall be deemed sufficient service upon the registrant; and

(ii) Any process, including the process of garnishment, may be served upon the director, as agent of the registrant, in the event that no resident agent can be found upon whom service can be made, or the registrant has failed to designate a resident agent as required.

(d) No registration shall be transferable or assignable. A change in ownership of less than twenty-five percent (25%) of the voting stock or equity interests of a registrant shall not be considered a transfer or assignment of the registration. A change in ownership of twenty-five percent (25%) or more of the voting stock or equity interests shall require notification to the department, and registration by the transferee/assignee within fifteen (15) days of the change in ownership. A change in name shall require notification to the department within fifteen (15) days.

(e) Any registrant shall, within twenty-four (24) hours after actual knowledge, notify the department of the occurrence of any of the following events:

(1) The institution of bankruptcy, receivership, reorganization, or insolvency proceedings regarding a registrant;

(2) The institution of any adverse government action against a registrant; or

(3) Any felony indictment or conviction of any registrant or any officers, directors, owners, employees, members, or partners thereof.

(f) Student loan servicers shall designate and provide contact information for an individual to represent the student loan servicer in communications with the department. This information shall be updated within ten (10) days of any change thereto.

(g) Registration shall be valid for one calendar year, and student loan servicers shall be required to renew their registration with the department annually.

(h) The department may assess a fine of ten thousand dollars ($10,000) on any student loan servicer that services student education loans for thirty (30) or more days without registering and complying with the conditions provided in this section.

(i) The department may share any information gathered through its registration or examination of student loan servicers with the attorney general.