17:16ZZ-5 Issuance of license.

5. The commissioner shall automatically issue a limited, irrevocable license to any person servicing a student loan under contract with the United States Department of Education as follows:

a. Any person seeking to act within this State as a student loan servicer is exempt from the application procedures established pursuant to subsection b. of section 4 of this act, other than the requirements of paragraph (3) and paragraph (4), to the extent that the student loan servicing performed in this State is conducted pursuant to a contract awarded by the United States Secretary of Education under 20 U.S.C. s.1087f. The procedure to document eligibility for the exemption shall be prescribed by the commissioner.

b. Any person deemed exempt by the commissioner pursuant to subsection a. of this section shall be issued a license by the commissioner for the servicing of student loans under contract with the United States Department of Education and shall be considered by the commissioner to have met all requirements established in subsection c. of section 4 of this act.

c. The provisions of subsections d. through g. of section 4 of this act and subsection a. of section 10 of this act shall not be applicable to a person issued a limited license pursuant to this section to the extent that the person is servicing federal student loans. A person shall not be exempt from subsections d. through g. of section 4 of this act or subsection a. of section 10 to the extent that the person is also servicing non-federal loans.

d. Any person issued a license pursuant to this section shall provide the commissioner with written notice within seven days following the notification of the expiration, revocation, or termination of any contract awarded by the United States Secretary of Education under 20 U.S.C s.1087f. The person shall have 30 days to satisfy all requirements established under this act in order to continue to act within this State as a student loan servicer unless the person is also licensed to service non-federal loans in New Jersey. At the expiration of the 30-day period, if the person has not satisfied the requirements established pursuant to this act, the commissioner shall immediately suspend any license granted under this section.

e. In the case of student loan servicing that is not conducted pursuant to a contract awarded by the United States Secretary of Education under 20 U.S.C. s.1087f, nothing in this section shall prevent the commissioner from issuing an order to temporarily or permanently prohibit any person from acting as a student loan servicer.

f. In the case of student loan servicing conducted pursuant to a contract awarded by the United States Secretary of Education under 20 U.S.C s.1087f, nothing in the section shall prevent the commissioner from issuing a cease and desist or injunction against any student loan servicer to cease activities in violation of this act or the New Jersey consumer fraud act, P.L.1960, c.39 (C.56:8-1 et seq.).

L.2019, c.200, s.5.