On September 9, 2022, the California Department of Financial Protection and Innovation (DFPI) proposed amendments to its student loan regulations, which we previously covered. here. After reviewing public comments, on January 6, 2023, DFPI opened a Notice requested additional public comment regarding a set of amended regulations.
Among other things, as amended, the proposed regulations would:
- Set the 11:59 pm Pacific Standard Time cutoff for receiving payments, regardless of service location.
- Expand the definition of “revenue share agreement” to include any percentage or amount that the student agrees to pay from future earnings, regardless whether that agreement is for fees, bills, books, supplies, room & board, transportation, or miscellaneous expenses. In addition, profit sharing agreements that go beyond the investment will also be covered under the definition, including affiliates. an agreement to credit or delay payments.
- The servicer is required to acknowledge receipt and respond to qualified written requests, in writing, using the means of communication preferred by the borrower. If no specific method is indicated, servicers must send information to the borrower’s last address on record and to all email addresses on record.
- Require service providers to include in their reporting a date of commencement of each product they serve (refer to, separately, the date of education funding products, share agreements income, or financial payment contracts advanced, covered, credited, deferred or financed) .
- Revise the provisions to reflect the terms contained in the Truth in Lending Act and the Higher Education Act, for example, change the definition of “educational financing products,” to now include “private education loans” (formerly, “private loans”), as This term is defined under the Truth in Lending Act.
The changes are subject to a 15-day comment period, ending January 26, 2023.