Connecticut Senate Bill SB01019

Connecticut 2023 Regular Session

• Introduced: 2/15/23
• Refer: 2/15/23

Caption

An Act Concerning Student Loan Servicers.

Impact

The bill will amend existing statutes, specifically replacing Section 36a-846 and adjusting Section 36a-847a of the general statutes. By establishing clearer definitions and regulations concerning student loan servicing and the roles of different players in the industry, the bill is expected to foster a more transparent and reliable student loan servicing environment. This aligns with ongoing efforts across various states to protect student borrowers against potential predatory practices and disorganized servicing processes.

Summary

SB01019, also known as the Act Concerning Student Loan Servicers, aims to clarify the registration requirements for subservicers of federal student loan servicers in Connecticut. The bill seeks to enhance consumer protection and ensure that all entities involved in the servicing of student loans are properly registered, thereby increasing accountability and oversight in the loan servicing industry. The proposed changes are set to take effect on October 1, 2023.

Contention

While the bill primarily focuses on regulatory clarity, discussions among stakeholders may arise regarding the implications of increased regulatory burden on student loan servicers. Some industry representatives might argue that these regulations could lead to higher costs or reduced accessibility for borrowers. On the other hand, advocates for stronger consumer protections will likely argue that such measures are necessary to ensure that student borrowers are treated fairly and to prevent malpractices in servicing.

Notable_points

The legislation acknowledges the responsibilities of federal student loan servicers and aims to hold these servicers accountable for their interactions with borrowers. By ensuring that subservicers are registered, the bill aims to create a more streamlined student loan servicing experience, helping borrowers receive the accurate and timely information they need regarding their loans.