The Illinois Department of Financial and Professional Regulation (IDFPR) published a notice of proposed rules implementing the Student Loan Servicing Act in the July 10, 2020 issue of the Illinois Register. Written comments will be accepted for 45 days.
The IDFPR initially proposed rules in November 2018 but withdrew them a year later because it wished “to reassess the rulemaking.” The current proposal is similar in scope, except that it has dropped the subpart on administrative hearings. A number of the remaining provisions have been refined since their prior publication:
- Assessments (which are in addition to annual renewal fees) would be based on the proportion of Illinois borrowers serviced by each licensee (not the proportion of Illinois loans) (1010.120(f))
- The requirement to provide a secure website and toll-free telephone service to handle borrower and cosigner communications regarding existing loans no longer extends to communications regarding applications for loans (1010.140)
- The rules now contemplate both borrowers and cosigners (not just borrowers) in the requirements to provide electronic access to account information and promptly credit payments (1010.160(a)-(b))
- Servicers are exempt from the three-year record retention requirement to the extent prohibited by their contracts with lenders (1010.180)
The proposed rules would continue to require licensees to: provide borrowers with information about alternative repayment and loan forgiveness options (1010.150), credit a cosigner’s payment only to the cosigned loan unless directed by the cosigner (1010.160(c)), maintain loan records (1010.170, .190), and file an independent financial audit report (1010.210). Like the November 2018 proposal, this proposal also contains a fee schedule (1010.120) and certain examination procedures (1010.220). While the fee schedule has not changed, the text of the proposed rule has been updated to reference and re-state the fees set forth in the statute.