Section 1010.100  Definitions

"Act" means the Student Loan Servicing Rights Act [110 ILCS 992].

"Department" means the Department of Financial and Professional Regulation.

"Director" means the Director of the Division of Banking, with the authority delegated by the Secretary.

"Division" means the Department of Financial and Professional Regulation-Division of Banking, with the authority delegated by the Secretary.

"Licensee" means a person licensed pursuant to the Act.

"NMLS" means the Nationwide Multistate Licensing System and Registry.

"Secretary" means the Secretary of the Department of Financial and Professional Regulation.

Section 1010.120  Fees

a)         The fees listed in this Section shall be payable to the Department, or to NMLS for transfer to the Division, as approved by the Director.  The Director will specify the form of payment to the Division or to NMLS, which may include certified check, money order, credit card, or other forms authorized by the Director.  NMLS shall be authorized to collect and process transaction fees or other fees related to licensees or other persons subject to the Act.

b)         License Fees

1)         Application and Investigation.  For each application for an initial license, the applicant shall pay a nonrefundable initial application fee of $1000 (see Sections 15-15 and 20-80 of the Act) and a nonrefundable background investigation fee of $800, or the amount authorized by Sections 15-15 and 20-80 of the Act.

2)         License Renewal.  For each application for an annual renewal of a license, the applicant shall pay a nonrefundable renewal fee of $1,000 (see Section 20-80 of the Act). In the case of an inactive license, the applicant shall pay the nonrefundable renewal fee and an additional nonrefundable reactivation fee equal to the renewal fee, pursuant to Section 15-40(c) of the Act.

3)         Notice of Change of Ownership or Control.  The licensee shall pay a nonrefundable fee of $500 for each notice of change of ownership or control filed pursuant to Section 1010.130.

4)         Notice of Change of Officers or Directors or Change of Name or Address.  The licensee shall pay a nonrefundable fee of $50 for each notice of change of officers or directors or change of name or address filed pursuant to Section 1010.130.

c)         Returned Payment.  Any licensee or person who delivers a check or other payment to the Department that is returned unpaid by the financial institution upon which it is drawn shall pay to the Department, in addition to the amount already owed, a fee of $50.

d)         Examination Fees

1)         Time expended in the conduct of any examination of the affairs of any licensee or its affiliates pursuant to Section 15-40 of the Act shall be billed by the Department at a rate of $510 per examiner day.  Fees will be billed following completion of the examination and shall be paid within 30 days after receipt of the billing.

2)         Out-of-State Travel.  When out-of-state travel occurs in the conduct of any examination, the licensee shall make arrangements to reimburse the Department all charges for services such as travel expenses, including airfare, hotel and per diem incurred by the employee.  These expenses are to be in accord with applicable travel regulations published by the Department of Central Management Services and approved by the Governor's Travel Control Board (80 Ill. Adm. Code 2800). 

e)         Hearings.  Each party that requests a hearing pursuant to Sections 20-30 and 20-65 of the Act shall pay a nonrefundable fee of $500, unless the fee is waived by the Director.  In determining whether to waive the fee, the Director shall consider the financial hardship imposed on the party.

f)         Assessments.  Each licensee shall pay to the Division its pro rata share of the cost for administration of the Act that exceeds other fees listed in this Section, as estimated by the Division, for the current year and any deficit actually incurred in the administration of the Act in prior years.  Each licensee's pro rata share shall be the percentage that the number of borrowers serviced in Illinois by the licensee bears to the total number of borrowers serviced by all licensees in Illinois.

Section 1010.130  Notice of Changes by Licensee

a)         Each licensee shall, upon any change in the information contained in its application for license, file an amendment to that application setting forth the changed information.  The amendments shall be filed within 10 business days after the occurrence of the event that results in the information becoming inaccurate or incomplete.

b)         Any amendment that cannot be submitted through NMLS shall be filed directly with the Division.

Section 1010.140  Licensee Website and Toll-Free Telephone Service

Each licensee shall maintain a secured-access website and toll-free telephone service consistent with the provisions of Sections 5-55 and 5-65 of the Act.  The secured-access website and toll-free telephone service shall, at a minimum, provide borrowers and cosigners with capabilities reasonably adequate for efficiently handling communications, questions, and other matters relating to an existing loan.  In determining whether the secured-accessed website and toll-free telephone service are provided in a reasonably adequate manner, the Director will consider consumer complaints received regarding the licensee and information obtained from examinations conducted and reports filed pursuant to the Act.

Section 1010.150  Alternative Repayment and Loan Forgiveness Options

Licensees must provide complete information to borrowers about alternative repayment and loan forgiveness options, the application processes for those options, the differences between those options and forbearance, and the consequences of those options and forbearance, consistent with Sections 5-30, 5-35, 5-40, and 5-45 of the Act.

Section 1010.160  Account Information, Payment Processing, Cosigner Payments

a)         Licensees must maintain detailed account information for each student loan borrower and cosigner, on the licensee's website, accessible to the borrower and cosigner, as applicable, through a secure login system.  The licensee must maintain account history for each loan serviced and a report of all loans for each borrower serviced by the licensee.

b)         Licensees must credit borrower and cosigner payments promptly and accurately, including, but not limited to, by providing same-day crediting of electronic payments, if made before the posted cut-off time for same-day crediting, and crediting of paper check payments on the date received by the licensee.

c)         Licensees must apply payments made by cosigners only to a loan for which the payor has cosigned, unless specifically directed otherwise by the cosigner/payor.

Section 1010.170  Books and Records

a)         Licensees must maintain a general ledger, maintain a cash receipt and disbursement journal, and reconcile bank accounts at least monthly.

b)         Licensees shall maintain, for each student loan serviced, the following information:

1)         the student loan application, if available;

2)         disclosure statements sent to the borrower;

3)         the promissory note or loan agreement;

4)         the complete loan history;

5)         qualified written requests;

6)         instructions from the borrower, if any, on how to apply overpayments;

7)         statements of account sent to the borrower; and

8)         any additional records the Director may designate.

c)         Each licensee must maintain books and records (see subsections (a) and (b)) at a location designated by the licensee.

Section 1010.180  Record Retention

Licensees must maintain all applicable records required by the Act and this Part for a minimum of 3 years after a serviced loan has been paid in full or assigned to collection, or the servicing rights have been sold, assigned, or transferred, unless prohibited by contract with the lender.

Section 1010.190  Electronic Records

Electronic records must be maintained by licensees in a commonly used format and be readily accessible, readable, and printable by the Director and Division staff.

Section 1010.210  Preparation of Independent Audit Report

a)         Each licensee shall annually cause its books and accounts to be audited by a certified public accountant not connected with the licensee.  The audit shall be filed with the Division within 105 days after the end of the licensee's fiscal year.  The audit shall be sufficiently comprehensive in scope to permit the expression of an opinion on the financial statements, which shall be prepared in accordance with generally accepted accounting principles and shall be conducted in accordance with generally accepted auditing standards.

b)         Audit reports not filed with the Division within 105 days after the end of a licensee's fiscal year as specified in subsection (a), unless extended for cause by the Director, shall cause the licensee to pay a fee at the rate of $50 per calendar day for up to three months.  To qualify for an extension of time, a licensee shall apply to the Director in writing before the audit report filing deadline with an explanation of the licensee's need for an extension.  In determining whether to grant an extension of time, the Director shall consider whether the extension of time is based on conditions beyond the control of the licensee.

c)         The Director may appoint an independent auditor at the expense of the licensee at any time after a licensee has failed to timely file a required audit report.

(Source:  Amended at 49 Ill. Reg. 176, effective December 18, 2024)

Section 1010.220  Examination

a)         Licensees shall be examined from time to time pursuant to Section 20-15(a) of the Act.  As part of each regularly scheduled examination, the Director shall evaluate and rate licensees in accordance with uniform rating factors.

b)         Ratings include, but are not limited to:

1)         The highest rating of 1 is assigned to a licensee that maintains a strong compliance management system (CMS) and takes active steps to prevent any violations of law and consumer harm.

2)         The rating of 2 is assigned to a licensee that maintains a CMS that is satisfactory at managing consumer compliance risk in the licensee's products and services and substantially limiting violations of law and consumer harm.

3)         The rating of 3 reflects a CMS deficient at managing consumer compliance risk in the licensee's products and services and at limiting violations of law and consumer harm.

4)         The rating of 4 reflects a CMS seriously deficient at managing consumer compliance risk in the licensee's products and services and/or at preventing violations of law and consumer harm.

5)         The rating of 5 reflects a CMS critically deficient at managing consumer compliance risk in the licensee's products and services and/or at preventing violations of law and consumer harm.

c)         All licensees shall be subject to examination by the Director.  The Director may enter into cooperative agreements with other regulatory authorities and contract with others to provide examinations.  The Director may accept examination reports from those regulatory authorities and under contracts that meet the requirements of this Section.  The examination shall result in a rating under subsection (b) and will be charged at the rate referenced.