RELATES TO:
KRS
286.1-010,
286.12-010,
286.12-020,
286.12-030,
286.12-040,
286.12-060,
286.12-070
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
286.1-020(1) authorizes the
commissioner to promulgate, amend, and repeal any administrative regulations,
forms, and orders as are necessary to interpret and carry out the provisions
and intent of this chapter.
KRS
286.12-030(2)(a) authorizes
the commissioner to prescribe the form and materials required to apply for a
license under KRS Chapter 286.12. This administrative regulation establishes
licensing and registration requirements for student education loan servicers
and procedures for using the Nationwide Multi-state Licensing System
(NMLS).
Section 1. Definitions.
(1) "Applicant" is defined by
KRS
286.12-010(2).
(2) "Commissioner" is defined by
KRS
286.1-010(1).
(3) "Department" is defined by
KRS
286.1-010(2).
(4) "Federal student education loan" is
defined by KRS
286.12-020(1).
(5) "Student education loan servicer" and
"servicer" are defined by
KRS
286.12-010(13).
Section 2. Initial Application and
Notice.
(1) A person providing notice to the
commissioner as a federal student education loan servicer doing business in
Kentucky as of July 14, 2022, shall submit:
(2) Federal student education loan
servicers that begin conducting business in Kentucky after July 14, 2022,
non-federal student education loan servicers, and federal student education
loan servicers that also service non-federal student education loans shall
submit:
(d) Either:
1. An audited financial statement prepared by
a certified public accountant (CPA), in accordance with generally accepted
accounting principles (GAAP), verifying a minimum net worth of at
least$250,000; or
2. The following
CPA prepared financial statements, if the request is made by the applicant and
is deemed reasonable by the Commissioner based on the size, structure, and
complexity of the applicant:
a. A Reviewed
financial statement; or
b. A
Compiled financial statement;
(e) An Electronic Surety Bond online at
http://mortgage.nationwidelicensingsystem.org,
which shall:
1. Include the name of the
principal insured, which shall match the full legal name of
applicant;
2. Be to the benefit of
the department; and
3. Be in an
amount of the lessor of:
a. $100,000;
or
b. 0.01 percent(.0001) of the
amount of the Kentucky servicing portfolio; and
(f) A nonrefundable investigation fee of
$5,000.
Section
3. Renewal Applications - All Licensees.
(1) A licensee applying for an annual renewal
of a student education loan servicer license, on or before December 1st, shall:
(a) Submit required updates and attestations
verifying that all information in the licensee's record, maintained in the NMLS
operated by the State Regulatory Registry, LLC, is correct and available online
at
http://mortgage.nationwidelicensingsystem.org;
and
(b) Pay the annual assessment
fee to be established by commissioner's order pursuant to
KRS
286.12-070(2). The minimum
assessment fee shall be$5,000 and the maximum assessment fee shall
be$20,000.
(2) The
commissioner shall not approve an application for renewal of a student
education loan servicer license if the fees, materials, or any information
required by subsection (1) of this section is not received on or before
December 1st.
(3) A licensee
applying to reinstate a student education loan servicer license after December
1st shall submit all fees, materials, and information required by subsection
(1) of this section.
(4) A licensee
applying to reinstate a student education loan servicer license after December
31st shall:
(a) Submit all fees, materials,
and information required by subsection (1) of this section; and
(b) Pay a late filing fee of $1,000 before
January 31st of the following year that the renewal application was
due.
(5) The
commissioner shall not approvean application for reinstatement if the
application, fees, or any required information is not received before January
31st of the following year that the renewal application was due.
(6) If a licensee submits an application or
fees for renewal or reinstatement of a student education loan servicer license,
but fails to timely complete the application and submit the fees as required by
this section, the license shall automatically terminate as of January 31 of the
following year that the renewal application was due.
Section 4. Change of address, name, control,
or agent for service-All Licensees.
(1) A
licensee that intends to change its address, name, or agent for service of
process shall notify the commissioner in writing at least:
(a) Ten (10) days prior to the change of
address or name; and
(b) Five (5)
days prior to the change of agent for service of process.
(2) A licensee that intends to file for a
change of control, as defined by
KRS
286.12- 010(6), shall notify the commissioner
in writing within fifteen (15) days after learning of the proposed change of
control and thirty (30) days prior to the effective date of the change of
control and shall submit:
(a) For an existing
licensee acquiring another licensee, a change of control fee of $1,000;
or
(b) For all non-licensed
entities, a change of control fee of $5,000.
(3) A licensee changing its address, name,
control, or agent for service of process shall update this information in NMLS
within the same time periods set forth in this section.
Section 5. Annual Report - All Licensees.
Each licensee shall file an annual report electronically with the commissioner,
on Form SLSCR-Student Loan Servicer Call Report, on or before November 1st of
each year.
Section 6. Electronic
Submission of Filings and Fees through the Nationwide Multistate Licensing
System Operated by the State Regulatory Registry, LLC.
(1) A person applying for licensure,
registration, renewal, or reinstatement pursuant to Sections 2, 3, or 4 of this
administrative regulation shall electronically submit the following to NMLS, at
http://mortgage.nationwidelicensingsystem.org,
as part of the nationwide multi-state licensing system:
(a) All forms, updates, attestations,
reports, and documentation required by Sections 2, 3, and 4 of this
administrative regulation, as applicable; and
(b) All fees referenced in this
administrative regulation.
(2) Any fees assessed by NMLS, to process the
electronic submissions referenced in Sections 2, 3, or 4 of this administrative
regulation shall be paid by the applicant.
Section 7. Incorporation by Reference.
(1) "SLSCR-Student Loan Servicer Call
Report", January 2023, is incorporated by reference.
(2) This material may be inspected, copied,
or obtained, subject to applicable copyright law, at the Department of
Financial Institutions, 500 Mero St 2SW19, Frankfort, Kentucky 40601, Monday
through Friday, 8 a.m. to 5 p.m. This material may also be obtained from the
department's Web site at
http://www.kfi.ky.gov