By revising Section 28108, AB 3264 aims to streamline and improve the process through which the Commissioner can conduct investigations concerning the compliance of student loan servicers with applicable laws and regulations. This includes granting the commissioner power to examine records and documents relevant to the servicing of loans and to hold hearings or take testimony under oath as necessary. The intent is to ensure that borrowers are protected from potential mishandling or mismanagement by servicers, thereby reinforcing consumer trust in the system.
Assembly Bill 3264, introduced by Assembly Member Luz Rivas on February 21, 2020, proposes a modification to the existing California Financial Code, specifically amending Section 28108 concerning the servicing of student loans. The primary focus of this bill is to clarify and enhance the authority of the Commissioner of Business Oversight in relation to investigations of student loan servicers. Under the current Student Loan Servicing Act, any entity involved in student loan servicing must secure a license, and the commissioner is assigned the responsibility for overseeing this regulation.
While the bill appears largely administrative in nature, concerns could arise surrounding the practical implications of increased oversight and regulatory authority. Some stakeholders may argue about the balance between regulatory enforcement and enabling businesses to operate without undue interference. Also, there may be discussions regarding how well the existing licensing provisions operate and whether additional changes are necessary to better protect borrowers from potential abuses in the student loan servicing system.