Senate Bill 485, passed by the 2021 Oregon Legislature and effective July 1, 2022, requires companies to get a license from the Division of Financial Regulation in order to service student loans in the state of Oregon.
The division is working on rulemaking to implement the new licensing and regulation program. We will be accepting applications as of June 1, 2022. We will continue with the standard rulemaking process to implement permanent rules for licensing and regulation. When more information is available on this process, you can find it on our Laws and Rules page in the Proposed Rules section.
How to apply
All applications for an Oregon student loan servicer license must be filed through the Nationwide Mortgage Licensing System (NMLS). The NMLS website will have instructions on how to submit an application for Oregon on or about June 1, 2022. NMLS has a resources and support section that may be helpful, particularly for first-time users.
An application for a student loan servicer license submitted through the NMLS must meet all of the following requirements:
- Disclose any other trade names the company intends to use in servicing Oregon student loans.
- Include a registered agent in Oregon.
- Have a completed MU-3 for any branch location where the company will service Oregon student loans.
- Include an electronic surety bond or letter of credit in the amount of $30,000.
- Identify all of the applicant's controllers and managers, including completing a MU2, providing fingerprints if they are not on file with NMLS and authorizing both a criminal records check and a credit report.
- Include answers to disclosure questions for the company, the controllers, and the branch managers. There is more information on the questions available through the NMLS application process. If you answer yes to any disclosure question, you must provide an explanation.
- Not include a controller or manager that has been convicted of any of the following:
- Any felony in the past seven years.
- A misdemeanor involving a false statement or dishonesty in the past seven years.
- Any felony at any time if the felony involved fraud, dishonesty, breach of trust, or money laundering.
- Show that each controller and manager has demonstrated financial responsibility, character, and general fitness to command the confidence of the community and warrant that the company will operate honestly, fairly, and efficiently.
- Provide financial statements that are less than six months old that demonstrate that the company maintains sufficient liquidity, operating reserves, and tangible net worth to adequately meet all obligations.
- Pay the nonrefundable application fee of $1,000 and any NMLS user fee. Renewal fees are $500 and any NMLS user fee.
The licensees must submit an annual report on August 1 of each year. The report will consist of a detailed breakdown of its portfolio by borrower as of June 1 of the current year. The information in this report will be used by the Department to calculate an annual assessment due October 1. The assessment will represent the licensee's pro rata share of the cost of running the Student Loan Servicing Program and be paid through NMLS.
Student Loan Servicer Annual Report
Office of the Ombudsman for Student Loan Borrowers
The Office of the Ombudsman for Student Loan Borrowers serves as an independent advocate for fair, reasonable, and legal servicing of student loans. The office will:
- review and attempt to resolve complaints from borrowers;
- assist borrowers in understanding the borrowers' rights and responsibilities under the terms of the borrowers' student loans;
- provide information on methods to resolve issues borrowers have with student loans;
- provide education for borrowers on student loans and related programs.