Wisconsin 2023-2024 Regular Session

Wisconsin Senate Bill SB859 Compare Versions

Only one version of the bill is available at this time.

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2	2	ARG:cdc&wlj
3	3	2023 - 2024 LEGISLATURE
4	4	2023 SENATE BILL 859
5	5	December 26, 2023 - Introduced by Senators HESSELBEIN, SMITH, CARPENTER,
6	6	TAYLOR, ROYS, LARSON, L. JOHNSON, AGARD and SPREITZER, cosponsored by
7	7	Representatives JOERS, DRAKE, SINICKI, NEUBAUER, RATCLIFF, BARE, EMERSON,
8	8	SHELTON, JACOBSON, CONSIDINE, PALMERI, C. ANDERSON, SUBECK, CLANCY,
9	9	HONG, MOORE OMOKUNDE, J. ANDERSON, MADISON, STUBBS, BALDEH, CONLEY,
10	10	SHANKLAND and ORTIZ-VELEZ. Referred to Committee on Financial
11	11	Institutions and Sporting Heritage.
12	12	*AUTHORS SUBJECT TO CHANGE*
13	13	AN ACT to amend 15.01 (6) and 15.02 (3) (c) 1.; and to create 15.185 (6) and
14	14	subchapter V of chapter 224 [precedes 224.101] of the statutes; relating to:
15	15	student loans for postsecondary education, requirements related to student
16	16	loan servicers, creating an office of the student loan ombudsman in the
17	17	Department of Financial Institutions, and granting rule-making authority.
18	18	Analysis by the Legislative Reference Bureau
19	19	This bill creates an Office of the Student Loan Ombudsman (office) in the
20	20	Department of Financial Institutions and requires student loan servicers to be
21	21	licensed by this office. The bill contains a variety of provisions governing student
22	22	education loans, student loan borrowers, and student loan servicers. Under the bill,
23	23	a “student education loan" means a loan that is extended to a student loan borrower
24	24	expressly for postsecondary education expenses or related expenses. A “student loan
25	25	borrower" means a resident of this state who has received or agreed to pay a student
26	26	education loan or a person who shares legal responsibility for repaying the loan. A
27	27	“student loan servicer" means a person responsible for the servicing of a student
28	28	education loan, but excludes certain state-regulated financial service providers.
29	29	“Servicing” means receiving scheduled periodic payments from a student loan
30	30	borrower; applying payments received from a student loan borrower; and performing
31	31	other administrative services with respect to a student education loan.
32	32	The bill requires a student loan servicer, wherever located, to be licensed by the
33	33	office before directly or indirectly engaging in servicing student education loans in
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40	40	SENATE BILL 859
41	41	this state. A student loan servicer must hold a separate license for each of its places
42	42	of business and the student loan servicer may not act under any name or at any place
43	43	of business that is not identified in the license.
44	44	The bill imposes numerous requirements on student loan servicers, including
45	45	requirements relating to all of the following:
46	46	1. Responding to written inquiries from student loan borrowers.
47	47	2. Handling and applying “nonconforming payments," defined as payments on
48	48	student education loans that are different from the required payments.
49	49	3. Responsibilities if there is a sale, assignment, or other transfer of the
50	50	servicing of a student education loan.
51	51	4. Maintaining and making available to the office records related to student
52	52	education loan transactions.
53	53	The bill also prohibits a student loan servicer from engaging in certain conduct
54	54	or activity, including the following:
55	55	1. Defrauding or misleading a student loan borrower.
56	56	2. Engaging in an unfair or deceptive practice or misrepresenting or omitting
57	57	material information in connection with the servicing of a student education loan.
58	58	3. Misapplying student education loan payments.
59	59	4. Providing inaccurate information to a credit bureau related to a student loan
60	60	borrower's creditworthiness.
61	61	5. Refusing to communicate with an authorized representative of a student
62	62	loan borrower.
63	63	6. Failing to evaluate a student loan borrower for an income-based repayment
64	64	program prior to placing the student loan borrower in default.
65	65	The bill also specifies the authority of the office to conduct investigations and
66	66	examinations and take administrative action and also provides a private right of
67	67	action for violations of the requirements or prohibitions under the bill.
68	68	The bill requires the office to perform certain functions, including: 1) assisting
69	69	student loan borrowers; 2) receiving and attempting to resolve complaints from
70	70	student loan borrowers and others; 3) compiling and analyzing data about these
71	71	complaints; 4) assisting student loan borrowers in various ways; 5) providing
72	72	information to the public and others regarding the problems and concerns of student
73	73	loan borrowers; and 6) analyzing and monitoring the development and
74	74	implementation of laws and policies relating to student loan borrowers.
75	75	Although the bill exempts certain state-regulated financial service providers,
76	76	primarily state-chartered financial institutions, from licensing and most other
77	77	requirements applicable to student loan servicers, the bill requires these exempt
78	78	organizations to cooperate with the office and provide information requested by the
79	79	office necessary to investigate and resolve student loan borrower complaints.
80	80	For further information see the state fiscal estimate, which will be printed as
81	81	an appendix to this bill.
82	82	The people of the state of Wisconsin, represented in senate and assembly, do
83	83	enact as follows: - 3 -2023 - 2024 Legislature
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86	86	SECTION 1
87	87	SENATE BILL 859
88	88	SECTION 1. 15.01 (6) of the statutes, as affected by 2023 Wisconsin Act 20, is
89	89	amended to read:
90	90	15.01 (6) “Division," “bureau," “section," and “unit" means the subunits of a
91	91	department or an independent agency, whether specifically created by law or created
92	92	by the head of the department or the independent agency for the more economic and
93	93	efficient administration and operation of the programs assigned to the department
94	94	or independent agency. The office of credit unions and the office of the student loan
95	95	ombudsman in the department of financial institutions, the office of the inspector
96	96	general in the department of children and families, the office of the inspector general
97	97	in the department of health services, and the office of children's mental health in the
98	98	department of health services have the meaning of “division" under this subsection.
99	99	The office of the long-term care ombudsman under the board on aging and long-term
100	100	care and the office of educational accountability and the office of literacy in the
101	101	department of public instruction have the meaning of “bureau" under this
102	102	subsection.
103	103	SECTION 2. 15.02 (3) (c) 1. of the statutes is amended to read:
104	104	15.02 (3) (c) 1. The principal subunit of the department is the “division". Each
105	105	division shall be headed by an “administrator". The office of credit unions and the
106	106	office of the student loan ombudsman in the department of financial institutions and
107	107	the office of children's mental health in the department of health services have the
108	108	meaning of “division" and the director of credit unions in the department of financial
109	109	institutions and the director of the office of children's mental health in the
110	110	department of health services have the meaning of “administrator" under this
111	111	subdivision.
112	112	SECTION 3. 15.185 (6) of the statutes is created to read:
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139	139	SECTION 3 SENATE BILL 859
140	140	15.185 (6) OFFICE OF THE STUDENT LOAN OMBUDSMAN. There is created in the
141	141	department of financial institutions an office of the student loan ombudsman.
142	142	SECTION 4. Subchapter V of chapter 224 [precedes 224.101] of the statutes is
143	143	created to read:
144	144	CHAPTER 224
145	145	SUBCHAPTER V
146	146	STUDENT LOANS
147	147	224.101 Definitions. In this subchapter:
148	148	(1) “Board” means the higher educational aids board.
149	149	(2) “Exempt organization” means the board or a state-regulated financial
150	150	service provider.
151	151	(3) “Licensee” means a person holding a license issued under this subchapter.
152	152	(4) “Office” means the office of the student loan ombudsman in the department.
153	153	(5) “Servicing" means doing all of the following:
154	154	(a) Receiving scheduled periodic payments from a student loan borrower
155	155	pursuant to the terms of a student education loan.
156	156	(b) Applying the payments of principal and interest and any other payments
157	157	with respect to the amounts received from a student loan borrower as may be
158	158	required pursuant to the terms of a student education loan.
159	159	(c) Performing other administrative services with respect to a student
160	160	education loan.
161	161	(6) “State-regulated financial service provider” means any of the following:
162	162	(a) A bank organized under ch. 221.
163	163	(b) A savings bank organized under ch. 214.
164	164	(c) A savings and loan association organized under ch. 215.
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192	192	SECTION 4
193	193	SENATE BILL 859
194	194	(d) A credit union organized under ch. 186.
195	195	(e) A consumer lender licensed under s. 138.09.
196	196	(7) “Student education loan" means a loan that is extended to a student loan
197	197	borrower expressly for postsecondary education expenses or related expenses and
198	198	does not include open-end credit or any loan that is secured by real property.
199	199	(8) “Student loan borrower" means any of the following:
200	200	(a) A resident of this state who has received or agreed to pay a student
201	201	education loan.
202	202	(b) A person who shares legal responsibility with a resident under par. (a) for
203	203	repaying the student education loan.
204	204	(9) “Student loan servicer" means a person, wherever located, responsible for
205	205	the servicing of a student education loan, but does not include the board or any
206	206	state-regulated financial service provider.
207	207	224.102 Ombudsman services. The office shall do all of the following:
208	208	(1) Provide timely assistance to student loan borrowers.
209	209	(2) Receive, review, and attempt to resolve complaints from all of the following:
210	210	(a) Student loan borrowers.
211	211	(b) In collaboration with institutions of higher education, student loan
212	212	servicers and any other participants in student education loan lending, including
213	213	originators servicing their own student education loans.
214	214	(3) Compile and analyze data on student loan borrower complaints as
215	215	described in sub. (2) and as resolved under s. 224.104.
216	216	(4) Assist student loan borrowers in understanding their rights and
217	217	responsibilities under the terms of student education loans.
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243	243	SECTION 4 SENATE BILL 859
244	244	(5) Provide information to the public, agencies, the legislature, and others
245	245	regarding the problems and concerns of student loan borrowers and make
246	246	recommendations for resolving those problems and concerns.
247	247	(6) Analyze and monitor the development and implementation of federal, state,
248	248	and local laws, ordinances, regulations, rules, and policies relating to student loan
249	249	borrowers and recommend any necessary changes.
250	250	(7) Review, as authorized and appropriate, the complete student education
251	251	loan history for a student loan borrower who provides written consent for the review.
252	252	(8) Provide sufficient outreach and disseminate information concerning the
253	253	availability of the office to assist student loan borrowers and potential student loan
254	254	borrowers, public institutions of higher education, student loan servicers, and any
255	255	other participants in student education loan lending with any student education
256	256	loan servicing concerns.
257	257	(9) Seek the assistance of an exempt organization in the resolution of a student
258	258	loan borrower complaint as described in sub. (2) involving that exempt organization.
259	259	The exempt organization shall cooperate with the office as required by s. 224.104.
260	260	(10) Take any other action necessary to fulfill the duties of the office as set forth
261	261	in this subchapter.
262	262	224.103 Annual report. The office shall submit a report by January 1 of each
263	263	year to the standing committee of each house of the legislature having jurisdiction
264	264	over matters related to higher education. The report shall include all of the
265	265	following:
266	266	(1) A description of actions taken with respect to the implementation of this
267	267	subchapter.
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294	294	SECTION 4
295	295	SENATE BILL 859
296	296	(2) An assessment of the overall effectiveness of the office, including
297	297	information, in the aggregate, regarding student loan borrower complaints
298	298	investigated with the assistance of an exempt organization.
299	299	(3) Recommendations regarding additional steps for the department to gain
300	300	regulatory control over licensing and enforcement with respect to student loan
301	301	servicers.
302	302	224.104 Assistance by exempt organizations; report. (1) An exempt
303	303	organization that is requested by the office to provide assistance under s. 224.102 (9)
304	304	shall provide, in a timely manner, the information requested by the office necessary
305	305	to investigate and resolve a student loan borrower complaint, including the steps
306	306	taken by the exempt organization to resolve the complaint, or, on its own, shall
307	307	resolve, in a timely manner, the complaint and provide the office with documentation
308	308	regarding the resolution.
309	309	(2) Annually, an exempt organization that is involved in the resolution of a
310	310	complaint under this section shall report to the office the number of complaints
311	311	received and the number of complaints resolved by the exempt organization.
312	312	224.105 Licensing of student loan servicers. (1) A person, wherever
313	313	located, may not directly or indirectly engage in servicing student education loans
314	314	in this state without first obtaining a license from the office under this section, unless
315	315	the person is exempt from licensure under sub. (2).
316	316	(2) The following persons are exempt from the licensing requirement under
317	317	sub. (1):
318	318	(a) A state-regulated financial service provider.
319	319	(b) The board.
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345	345	SECTION 4 SENATE BILL 859
346	346	(3) A person seeking to act within this state as a student loan servicer shall
347	347	make a written application to the office for an initial license in the form prescribed
348	348	by the office. The application shall be accompanied by all of the following:
349	349	(a) A financial statement prepared by a certified public accountant or a public
350	350	accountant, a general partner if the applicant is a partnership, a corporate officer if
351	351	the applicant is a corporation, or a member duly authorized to execute such
352	352	documents if the applicant is a limited liability company or association.
353	353	(b) Information regarding the history of criminal convictions of the following,
354	354	which information must be sufficient, as determined by the office, to make the
355	355	findings under sub. (4):
356	356	1. The applicant.
357	357	2. Officers, directors, and principal employees of the applicant.
358	358	3. Each individual shareholder, member, or partner who directly or indirectly
359	359	controls 10 percent or more of the ownership interests of the applicant.
360	360	(c) A nonrefundable license fee of $1,000.
361	361	(d) A nonrefundable investigation fee of $800.
362	362	(4) Upon the filing of an application for an initial license and the payment of
363	363	the fees for licensing and investigation under sub. (3), the office shall investigate the
364	364	financial condition and responsibility, financial and business experience, character,
365	365	and general fitness of the applicant. The office may conduct criminal history
366	366	background checks of the applicant and of each partner, member, officer, director,
367	367	and principal employee of the applicant. The office may issue a license if the office
368	368	finds all of the following to be true:
369	369	(a) The applicant's financial condition is sound.
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396	396	SECTION 4
397	397	SENATE BILL 859
398	398	(b) The applicant's business will be conducted honestly, fairly, equitably,
399	399	carefully, and efficiently within the purposes and intent of this subchapter and in a
400	400	manner commanding the confidence and trust of the community.
401	401	(c) No person on behalf of the applicant has knowingly made an incorrect
402	402	statement of a material fact in the application or in any report or statement made
403	403	under this subchapter.
404	404	(d) The applicant has met any other requirements as determined by the office.
405	405	(5) A license issued under this section expires at the close of business on
406	406	September 30 of the odd-numbered year following its issuance, unless renewed or
407	407	earlier surrendered, suspended, or revoked. No later than 15 days after a licensee
408	408	ceases to engage in the business of student education loan servicing in this state for
409	409	any reason, including a business decision to terminate operations in this state,
410	410	license revocation, bankruptcy, or voluntary dissolution, the licensee shall provide
411	411	written notice of surrender to the office and shall surrender to the office its license
412	412	for each location in which the licensee has ceased to engage in such business. The
413	413	written notice of surrender shall identify the location where the records of the
414	414	licensee will be stored and the name, address, and telephone number of an individual
415	415	authorized to provide access to the records. The surrender of a license does not
416	416	reduce or eliminate the licensee's civil or criminal liability arising from acts or
417	417	omissions occurring prior to the surrender of the license, including any
418	418	administrative actions undertaken by the office.
419	419	(6) A license issued under this section may be renewed for the ensuing
420	420	24-month period upon the filing of an application containing all required documents
421	421	and fees as provided in this section. A renewal application shall be filed on or before
422	422	September 1 of the year in which the license expires. A renewal application filed with
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449	449	SECTION 4 SENATE BILL 859
450	450	the office after September 1 that is accompanied by a $100 late fee is considered to
451	451	be timely and sufficient. If an application for a renewal license has been filed with
452	452	the office on or before the date the license expires, the license continues in effect until
453	453	the issuance by the office of the renewal license applied for or until the office has
454	454	notified the licensee in writing of the office's refusal to issue the renewal license
455	455	together with the grounds on which the refusal is based. The office may refuse to
456	456	issue a renewal license on any ground on which the office may refuse to issue an
457	457	initial license.
458	458	(7) An applicant or licensee under this section shall notify the office, in writing,
459	459	of any change in the information provided in the initial application for a license or
460	460	the most recent renewal application for a license, as applicable, not later than 10
461	461	business days after the occurrence of the event that results in the change.
462	462	(8) The office may consider an application for a license under this section
463	463	abandoned if the applicant fails to respond to any request for information required
464	464	under this subchapter or any rule promulgated under this subchapter, as long as the
465	465	office notifies the applicant, in writing, that the application will be considered
466	466	abandoned if the applicant fails to submit the information within 60 days after the
467	467	date on which the request for information is made. An application filing fee paid
468	468	prior to the date an application is abandoned under this subsection may not be
469	469	refunded. Abandonment of an application under this subsection does not preclude
470	470	the applicant from submitting a new application for a license under this section.
471	471	(9) A licensee may not act within this state as a student loan servicer under any
472	472	name or at any place of business other than that identified in the license. A licensee
473	473	may not change the location of the licensee's place of business without prior written
474	474	notice to the office. Not more than one place of business may be maintained under
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502	502	SECTION 4
503	503	SENATE BILL 859
504	504	the same license, but the office may issue more than one license to a licensee that
505	505	complies with the provisions of this subchapter as to each license. A license is not
506	506	transferable or assignable.
507	507	(10) (a) A student loan servicer shall maintain adequate records of each
508	508	student education loan transaction. Except as otherwise required by federal law, a
509	509	federal student loan education agreement, or a contract between the federal
510	510	government and the student loan servicer, a student loan servicer shall maintain
511	511	these records for not less than 2 years following the final payment on the student
512	512	education loan or the assignment of the student education loan, whichever occurs
513	513	first.
514	514	(b) Upon request by the office, a student loan servicer shall make the records
515	515	under par. (a) available or shall send these records to the office by registered or
516	516	certified mail, return receipt requested, or by any express delivery carrier that
517	517	provides a dated delivery receipt, not later than 5 business days after requested by
518	518	the office to do so. The office may grant a licensee additional time to make these
519	519	records available or to send the records to the office.
520	520	(11) (a) The office may suspend, revoke, or refuse to renew a license issued
521	521	under this section if the office finds any of the following:
522	522	1. That the licensee has violated any provision of this subchapter, any rule
523	523	promulgated thereunder, or any lawful order of the office made thereunder.
524	524	2. That any fact or condition exists that, if it had existed at the time of the
525	525	original application for the license, clearly would have warranted a denial of the
526	526	license.
527	527	3. That the licensee made a material misstatement in an application for a
528	528	license or in information furnished to the office.
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554	554	ARG:cdc&wlj
555	555	SECTION 4 SENATE BILL 859
556	556	4. That the licensee has failed to pay any fee required under this section.
557	557	(b) The office shall suspend a license issued under this section if the office finds
558	558	that the licensee is an individual who fails to comply, after appropriate notice, with
559	559	a subpoena or warrant issued by the department of workforce development or a
560	560	county child support agency under s. 59.53 (5) and related to paternity or child
561	561	support proceedings or who is delinquent in making court-ordered payments of child
562	562	or family support, maintenance, birth expenses, medical expenses, or other expenses
563	563	related to the support of a child or former spouse, as provided in a memorandum of
564	564	understanding entered into under s. 49.857. A licensee whose license is suspended
565	565	under this paragraph is entitled to a notice and hearing only as provided in a
566	566	memorandum of understanding entered into under s. 49.857 and is not entitled to
567	567	any other notice or hearing under this section.
568	568	(c) The office shall revoke a license issued under this section if the department
569	569	of revenue certifies under s. 73.0301 that the licensee is liable for delinquent taxes.
570	570	A licensee whose license is revoked under this paragraph for delinquent taxes is
571	571	entitled to a notice under s. 73.0301 (2) (b) 1. b. and a hearing under s. 73.0301 (5)
572	572	(a) but is not entitled to any other notice or hearing under this section.
573	573	(d) The office shall revoke a license issued under this section if the department
574	574	of workforce development certifies under s. 108.227 that the licensee is liable for
575	575	delinquent unemployment insurance contributions. A licensee whose license is
576	576	revoked under this paragraph for delinquent unemployment insurance
577	577	contributions is entitled to a notice under s. 108.227 (2) (b) 1. b. and a hearing under
578	578	s. 108.227 (5) (a) but is not entitled to any other notice or hearing under this section.
579	579	(e) A person whose license has been suspended, revoked, or refused renewal
580	580	under this subsection may request a hearing under s. 227.44 within 30 days after the
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606	606	LRB-2177/2
607	607	ARG:cdc&wlj
608	608	SECTION 4
609	609	SENATE BILL 859
610	610	date of suspension, revocation, or refusal. The office may appoint a hearing examiner
611	611	under s. 227.46 to conduct the hearing. This paragraph does not apply to a
612	612	suspension or revocation under pars. (b) to (d).
613	613	(f) An abatement of the license fee may not be made if the license is suspended
614	614	or revoked under this subsection or surrendered in connection with a suspension or
615	615	revocation proceeding.
616	616	(12) All fees received by the office under this section shall be credited to the
617	617	appropriation account under s. 20.144 (1) (g).
618	618	224.106 Student loan servicers. (1) In this section, “nonconforming
619	619	payment" means a payment on a student education loan that is different from the
620	620	required payment.
621	621	(2) (a) Except as otherwise provided in federal law, a federal student education
622	622	loan agreement, or a contract between the federal government and a student loan
623	623	servicer, a student loan servicer shall comply with the requirements of this
624	624	subsection.
625	625	(b) A student loan servicer shall respond to a written inquiry from a student
626	626	loan borrower or the representative of a student loan borrower within 30 days after
627	627	receiving the inquiry.
628	628	(c) Upon receipt of a nonconforming payment on a student education loan, a
629	629	student loan servicer shall do all of the following:
630	630	1. Ask the student loan borrower how the student loan borrower prefers the
631	631	student loan servicer to apply the nonconforming payment.
632	632	2. Note how the student loan borrower prefers the student loan servicer to
633	633	apply the nonconforming payment.
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658	658	ARG:cdc&wlj
659	659	SECTION 4 SENATE BILL 859
660	660	3. Apply the nonconforming payment in the manner preferred by the student
661	661	loan borrower.
662	662	4. Until the student loan borrower indicates otherwise, apply any future
663	663	nonconforming payments in the same manner preferred by the student loan
664	664	borrower as noted under subd. 2.
665	665	(d) If there is a sale, assignment, or other transfer of the servicing of a student
666	666	education loan that results in a change in the identity of the person to whom a
667	667	student loan borrower is required to send payments or direct any communication
668	668	concerning the student education loan, all of the following apply:
669	669	1. As a condition of the sale, assignment, or transfer, the student loan servicer
670	670	shall require the new student loan servicer to honor all benefits originally
671	671	represented as available to the student loan borrower during the repayment of the
672	672	student education loan and preserve the availability of these benefits, including any
673	673	benefits for which the student loan borrower has not yet qualified.
674	674	2. Within 45 days after the sale, assignment, or transfer, the student loan
675	675	servicer shall transfer to the new student loan servicer all information regarding the
676	676	student loan borrower, the account of the student loan borrower, and the student
677	677	education loan of the student loan borrower, including the repayment status of the
678	678	student loan borrower and any benefits associated with the student education loan.
679	679	3. The sale, assignment, or transfer of the servicing of the student education
680	680	loan shall be completed at least 7 days before the next payment on the student
681	681	education loan is due.
682	682	(e) A student loan servicer that obtains the right to service a student education
683	683	loan shall adopt policies and procedures to verify that the student loan servicer has
684	684	received all information regarding the student loan borrower, the account of the
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711	711	ARG:cdc&wlj
712	712	SECTION 4
713	713	SENATE BILL 859
714	714	student loan borrower, and the student education loan of the student loan borrower,
715	715	including the repayment status of the student loan borrower and any benefits
716	716	associated with the student education loan.
717	717	(3) A student loan servicer may not do any of the following:
718	718	(a) Directly or indirectly employ a scheme, device, or artifice to defraud or
719	719	mislead any student loan borrower.
720	720	(b) Engage in an unfair or deceptive practice toward any person or
721	721	misrepresent or omit any material information in connection with the servicing of
722	722	a student education loan, including misrepresenting the amount, nature, or terms
723	723	of any fee or payment due or claimed to be due on a student education loan, the terms
724	724	and conditions of the loan agreement, or the student loan borrower's obligations
725	725	under the loan.
726	726	(c) Obtain property by fraud or misrepresentation.
727	727	(d) Misapply student education loan payments to the outstanding balance of
728	728	a student education loan.
729	729	(e) Provide inaccurate information to a credit bureau, thereby harming the
730	730	determination of a student loan borrower's creditworthiness.
731	731	(f) Fail to report both the favorable and unfavorable payment history of a
732	732	student loan borrower to a nationally recognized consumer credit bureau at least
733	733	annually if the student loan servicer regularly reports information to such a credit
734	734	bureau.
735	735	(g) Refuse to communicate with an authorized representative of a student loan
736	736	borrower who provides a written authorization signed by the student loan borrower,
737	737	except that the student loan servicer may adopt procedures reasonably related to
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762	762	ARG:cdc&wlj
763	763	SECTION 4 SENATE BILL 859
764	764	verifying that the representative is in fact authorized to act on behalf of the student
765	765	loan borrower.
766	766	(h) Make any false statement or omit a material fact in connection with
767	767	information or reports filed with a governmental agency or in connection with an
768	768	investigation conducted by the office or another governmental agency.
769	769	(i) Fail to evaluate a student loan borrower for an income-based repayment
770	770	program prior to placing the student loan borrower in forbearance or default, if an
771	771	income-based repayment program is available to the student loan borrower.
772	772	(j) Violate any applicable federal law or regulation relating to student
773	773	education loan servicing, including the federal Truth in Lending Act, 15 USC 1601
774	774	to 1667f, and regulations adopted under that act.
775	775	(4) (a) A student loan borrower injured by violation of this section may bring
776	776	an action in any court of competent jurisdiction and recover the damages, fees, and
777	777	penalties set forth in par. (b).
778	778	(b) A student loan servicer that fails to comply with any requirement imposed
779	779	under this section with respect to a student loan borrower is liable in an amount
780	780	equal to the sum of all of the following:
781	781	1. Any actual damages sustained by the student loan borrower as result of the
782	782	violation.
783	783	2. If the student loan borrower establishes by a preponderance of the evidence
784	784	that the violation was willful or intentional, a monetary award equal to 2 times the
785	785	amount of actual damages.
786	786	3. In the case of any successful action by the student loan borrower to enforce
787	787	the liability set out in this paragraph, the costs of the action, together with
788	788	reasonable attorney fees, as determined by the court.
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814	814	LRB-2177/2
815	815	ARG:cdc&wlj
816	816	SECTION 4
817	817	SENATE BILL 859
818	818	(c) For purposes of par. (b), actual damages includes damages caused by
819	819	emotional distress or mental anguish with or without accompanying physical injury
820	820	proximately caused by a violation of this section.
821	821	(d) The remedies provided in this subsection do not preclude the availability
822	822	of other remedies that may be available to a student loan borrower.
823	823	224.107 Office powers and duties. (1) The office may conduct
824	824	investigations and examinations as follows:
825	825	(a) For purposes of initial licensing, renewal, suspension, or revocation or of
826	826	investigation to determine compliance with this subchapter, the office may access,
827	827	receive, and use any books, accounts, records, files, documents, information, or
828	828	evidence belonging to a licensee or person under examination, including any of the
829	829	following:
830	830	1. Criminal, civil, and administrative history information.
831	831	2. Personal history and experience information, including independent credit
832	832	reports obtained from a consumer reporting agency, as defined in 15 USC 1681a.
833	833	3. Any other documents, information, or evidence the office considers relevant
834	834	to the inquiry or investigation regardless of the location, possession, control, or
835	835	custody of the documents, information, or evidence.
836	836	(b) For the purposes of investigating violations or complaints arising under this
837	837	subchapter or of examination, the office may review, investigate, or examine any
838	838	licensee or person subject to this subchapter as often as necessary in order to carry
839	839	out the purposes of this subchapter. The office may direct, subpoena, or order the
840	840	attendance of and examine under oath any person whose testimony may be required
841	841	about the student education loan or the business or subject matter of the
842	842	examination or investigation and may direct, subpoena, or order the person to
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868	868	ARG:cdc&wlj
869	869	SECTION 4 SENATE BILL 859
870	870	produce books, accounts, records, files, and any other documents the office considers
871	871	relevant to the inquiry.
872	872	(c) In making an examination or investigation authorized by this section, the
873	873	office may control access to any documents and records of the licensee or person
874	874	under examination or investigation. The office may take possession of the
875	875	documents and records or place a person in exclusive charge of the documents and
876	876	records in the place where they are usually kept. During the period of control, a
877	877	person may not remove or attempt to remove any of the documents and records
878	878	except pursuant to a court order or with the consent of the office. Unless the office
879	879	has reasonable grounds to believe the documents or records of the licensee or person
880	880	have been, or are at risk of being, altered or destroyed for purposes of concealing a
881	881	violation of this subchapter, the licensee or owner of the documents and records may
882	882	have access to the documents or records as necessary to conduct its ordinary business
883	883	affairs.
884	884	(d) In order to carry out the purposes of this section, the office may do any of
885	885	the following:
886	886	1. Retain attorneys, accountants, or other professionals and specialists as
887	887	examiners, auditors, or investigators to conduct or assist in the conduct of
888	888	examinations or investigations.
889	889	2. Enter into agreements or relationships with other government officials or
890	890	regulatory associations in order to improve efficiencies and reduce regulatory
891	891	burden by sharing resources, standardized or uniform methods or procedures, and
892	892	documents, records, information, or evidence obtained under this section.
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916	916	LRB-2177/2
917	917	ARG:cdc&wlj
918	918	SECTION 4
919	919	SENATE BILL 859
920	920	3. Use, hire, contract for, or employ public or privately available analytical
921	921	systems, methods, or software to examine or investigate the licensee or person
922	922	subject to this subchapter.
923	923	4. Accept and rely on examination or investigation reports made by other
924	924	government officials, within or outside this state.
925	925	5. Accept audit reports made by an independent certified public accountant for
926	926	the licensee or person subject to this subchapter in the course of that part of the
927	927	examination covering the same general subject matter as the audit and may
928	928	incorporate the audit report in a report of examination, report of investigation, or
929	929	other writing of the office.
930	930	(e) A licensee or person subject to investigation or examination under this
931	931	section may not knowingly withhold, abstract, remove, mutilate, or destroy any
932	932	books, physical records, computer records, or other information relating to
933	933	information regulated under this subchapter.
934	934	(f) The costs of an investigation conducted by the office shall be paid by the
935	935	licensee or person being investigated. Funds received by the office under this
936	936	paragraph shall be credited to the appropriation account under s. 20.144 (1) (g).
937	937	(2) The office may do any of the following to address a violation of this
938	938	subchapter, any rule promulgated under this subchapter, or any order issued under
939	939	this subchapter:
940	940	(a) Issue an order requiring a student loan servicer to cease and desist from a
941	941	violation, to correct the conditions resulting from the violation, and to take actions
942	942	to prevent such violations in the future. As part of the order, the office may require
943	943	the student loan servicer to reimburse persons injured by the violation. A student
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968	968	ARG:cdc&wlj
969	969	SECTION 4 SENATE BILL 859
970	970	loan servicer that violates an order issued under this paragraph shall, for each
971	971	violation, forfeit not more than $1,000 per day for each day the violation continues.
972	972	(b) Commence administrative proceedings on its own initiative, or commence
973	973	civil actions through the department of justice, to restrain by temporary or
974	974	permanent injunction a person from violating this subchapter, to recover any fees or
975	975	penalties owed under this subchapter, or to seek relief available under this
976	976	subchapter on behalf of student loan borrowers.
977	977	(c) Suspend, revoke, or refuse to renew a license issued under s. 224.105 as
978	978	provided in s. 224.105 (11).
979	979	(3) The office may promulgate rules to implement this subchapter.
980	980	SECTION 5.0Nonstatutory provisions.
981	981	(1) (a) No later than the 90th day after the effective date of this paragraph, the
982	982	department of financial institutions shall determine whether it can fully implement
983	983	the provisions created in this act as subch. V of ch. 224 by the 90th day after the
984	984	effective date of this paragraph, and shall provide notice of this determination to the
985	985	legislative reference bureau by that date.
986	986	(b) If the notice of the department of financial institutions under par. (a) states
987	987	that the department cannot fully implement the provisions created in this act as
988	988	subch. V of ch. 224 by the 90th day after the effective date of this paragraph, the
989	989	department shall provide notice to the legislative reference bureau of the date on
990	990	which the provisions created in this act as subch. V of ch. 224 will be fully
991	991	implemented, which date may not be later than January 1, 2025, and the legislative
992	992	reference bureau shall publish a notice in the Wisconsin Administrative Register
993	993	that specifies this date.
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1019	1019	ARG:cdc&wlj
1020	1020	SECTION 6
1021	1021	SENATE BILL 859
1022	1022	SECTION 6.0Effective dates. This act takes effect on the day after publication,
1023	1023	except as follows:
1024	1024	(1) The treatment of ss. 15.01 (6), 15.02 (3) (c) 1., and 15.185 (6) and subch. V
1025	1025	of ch. 224 takes effect on the 90th day after the day of publication, or on the date
1026	1026	specified in the notice published in the Wisconsin Administrative Register under
1027	1027	SECTION 5 (1) (b) of this act, whichever is later.
1028	1028	(END)
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