On February 14, the Governor of New York signed into law AB 431 (the “Act”), amending Article 9, Sections 901, 902 and 904 of the financial services law relating to private education debt reporting. The Act requires student loan servicers to submit an annual report by April 1, detailing the private education debts they serviced for individuals residing in New York State during the previous calendar year. The report must include a list of all private education creditors associated with these debts, along with comprehensive data including the total outstanding dollar amount, the number of debts, and the number of consumers who owe these debts. Additionally, the report should provide information on the number of debts created in the prior year, defaults, and debts involving cosigners or guarantors. The Act also mandates the superintendent to establish a publicly accessible website containing information about student loan servicers, including their contact details and a summary of reported data.
The Act sets forth civil money penalties for reporting violations — up to $10,000 per violation — and those individuals found to have knowingly violated the Act may be barred from operating as a student loan servicer for up to ten years.
