KRS 286.12-020: License as student education loan servicer -- Exemptions -- Persons

servicing federal loans.

(1) As used in this section, "federal student education loan" means any:

(a) Student education loan issued pursuant to the William D. Ford Fed eral Direct

Loan Program established under 20 U.S.C. sec. 1087a et seq., as amended;

(b) Student education loan issued pursuant to the Federal Family Education Loan

Program, which was purchased by the United States pursuant to the federal

Ensuring Continued Access to Student Loans Act of 2008, Pub. L. No. 110 -

227, and is presently owned by the United States; or

(c) Other student education loan issued pursuant to a federal program that is

identified by order of the commissioner as a federal student education loan.

(2) Except as provided in subsections (3) and (4) of this section, no person shall engage

in the business of servicing student education loans in this state without having first

obtained a license as a student education loan servicer in accordance w ith this

subtitle.

(3) The following shall be exempt from the provisions of this subtitle:

(a) A bank or trust company doing business under the authority of, or in

accordance with, a license, certificate, or charter, issued by the United States,

or any sta te, district, territory, or commonwealth of the United States, that is

authorized to transact business in this state;

(b) A wholly owned subsidiary of any entity exempt under paragraph (a) of this

subsection;

(c) A federally chartered savings and loan asso ciation, federal savings bank, or

federal credit union that is authorized to transact business in this state;

(d) A savings and loan association, savings bank, or credit union organized under

the laws of this or any other state that is authorized to transa ct business in this

state;

(e) A public postsecondary educatio n institution or private nonprofit

postsecondary education institution servicing a student education loan

extended to a borrower;

(f) The United States, or any state, district, territory, commonwealth, or

possession of the United States;

(g) Any city, coun ty, or other political subdivision of any entity exempt under

paragraph (f) of this subsection; and

(h) Any agency, division, or corporate instrumentality of any entity exempt under

paragraph (f) or (g) of this subsection.

(4) A person servicing federal student education loans in this state shall:

(a) As of July 14, 2022, automatically be deemed, by operation of law, as having

been licensed by the commissioner to service federal student education loans

in this state;

(b) Provide notice to the commissioner that the person is servicing federal student

education loans in this state;

(c) Comply with this subtitle, with the exception of KRS 286.12-030; and

(d) Not be authorized to engage in the business of servicing non -federal student

education loans in this state unless the person is:

1. Exempt from this subtitle under subsection (3) of this section; or

2. Licensed as a student education loan servicer in accordance with this

subtitle.