Texas Senate Bill SB1859

Texas 2021 - 87th Regular

Caption

Relating to regulating the servicing of certain student loans, requiring the occupational licensing of certain student loan servicers, and the designation of a student loan ombudsman within the Texas Department of Banking; authorizing fees; authorizing civil and administrative penalties.

Impact

If enacted, SB1859 will amend existing laws to provide stronger oversight of student loan servicers. This means servicers will have to adhere to new licensing requirements and follow guidelines imposed by the Texas Department of Banking. Additionally, the establishment of a student loan ombudsman aims to simplify the process for borrowers seeking help, making it easier for them to navigate issues with their loans. The impact on state laws will focus on the protection of student borrowers and ensuring fair treatment by loan servicers, potentially reducing cases of mismanagement or predatory practices.

Summary

Senate Bill 1859 aims to enhance the regulation of student loan servicing in Texas by requiring the occupational licensing of certain student loan servicers. It establishes the role of a student loan ombudsman within the Texas Department of Banking to assist borrowers with complaints and issues relating to their student loans. The bill is designed to create a structured framework for the accountability of student loan servicers, ensuring they adhere to specific standards and practices in managing loans. This includes guidelines for maintaining accurate records, transferring loan servicing, and addressing borrower inquiries.

Contention

One of the main points of contention surrounding SB1859 may involve debates over the sufficiency of regulations and their enforcement. Supporters argue these new regulations are critical for consumer protection, especially in an era of rising student debt. Conversely, opponents may contend that stringent regulations could impose undue burdens on loan servicers, potentially leading to higher operational costs that could be passed onto borrowers. The balance between safeguarding borrowers' interests and maintaining a viable servicing market will likely be a key focus in discussions about the bill.