N.Y. Banking Law § 721: Responsibilities

§ 721. Responsibilities. 1. If a student loan servicer regularly

reports information to a consumer reporting agency, the servicer shall

accurately report a borrower's payment performance to at least one

consumer reporting agency that compiles and maintains files on consumers

on a nationwide basis as defined in Section 603(p) of the federal Fair

Credit Reporting Act (15 U.S.C. Sec. 1681a(p)), upon acceptance as a

data furnisher by that consumer reporting agency.

2. (a) Except as provided in federal law or required by a student loan

agreement, a student loan servicer shall inquire of a borrower how to

apply a borrower's nonconforming payment. A borrower's direction on how

to apply a nonconforming payment shall remain in effect for any future

nonconforming payment during the term of a student loan until the

borrower provides different directions.

(b) For purposes of this subdivision, "nonconforming payment" shall

mean a payment that is either more or less than the borrower's required

student loan payment.

3. (a) If the sale, assignment, or other transfer of the servicing of

a student loan results in a change in the identity of the person to whom

the borrower is required to send subsequent payments or direct any

communications concerning the student loan, a student loan servicer

shall transfer all information regarding a borrower, a borrower's

account, and a borrower's student loan, including but not limited to the

borrower's repayment status and any borrower benefits associated with

the borrower's student loan, to the new student loan servicer servicing

the borrower's student loan within forty-five days.

(b) A student loan servicer shall adopt policies and procedures to

verify that it has received all information regarding a borrower, a

borrower's account, and a borrower's student loan, including but not

limited to the borrower's repayment status and any borrower benefits

associated with the borrower's student loan, when the servicer obtains

the right to service a student loan.

4. If a student loan servicer sells, assigns, or otherwise transfers

the servicing of a student loan to a new servicer, the sale, assignment

or other transfer shall be completed at least seven days before the

borrower's next payment is due.

5. (a) A student loan servicer that sells, assigns, or otherwise

transfers the servicing of a student loan shall require as a condition

of such sale, assignment or other transfer that the new student loan

servicer shall honor all borrower benefits originally represented as

being available to a borrower during the repayment of the student loan

and the possibility of such benefits, including any benefits that were

represented as being available but for which the borrower had not yet

qualified.

(b) A student loan servicer that obtains the right to service a

student loan shall honor all borrower benefits originally represented as

being available to a borrower during the repayment of the student loan

and the possibility of such benefits, including any benefits that were

represented as being available but for which the borrower had not yet

qualified.

6. A student loan servicer shall respond within thirty days after

receipt to a written inquiry from a borrower or a borrower's

representative.

7. A student loan servicer shall preserve records of each student loan

and all communications with borrowers for not less than two years

following the final payment on such student loan or the sale, assignment

or other transfer of the servicing of such student loan, whichever

occurs first, or such longer period as may be required by any other

provision of law.