AB948,3,153 15.01 (6) “Division," “bureau," “section," and “unit" means the subunits of a
4department or an independent agency, whether specifically created by law or created
5by the head of the department or the independent agency for the more economic and
6efficient administration and operation of the programs assigned to the department
7or independent agency. The office of credit unions and the office of the student loan
8ombudsman
in the department of financial institutions, the office of the inspector
9general in the department of children and families, the office of the inspector general
10in the department of health services, and the office of children's mental health in the
11department of health services have the meaning of “division" under this subsection.
12The office of the long-term care ombudsman under the board on aging and long-term
13care and the office of educational accountability and the office of literacy in the
14department of public instruction have the meaning of “bureau" under this
15subsection.
AB948,2 16Section 2. 15.02 (3) (c) 1. of the statutes is amended to read:
AB948,3,2417 15.02 (3) (c) 1. The principal subunit of the department is the “division". Each
18division shall be headed by an “administrator". The office of credit unions and the
19office of the student loan ombudsman
in the department of financial institutions and
20the office of children's mental health in the department of health services have the
21meaning of “division" and the director of credit unions in the department of financial
22institutions and the director of the office of children's mental health in the
23department of health services have the meaning of “administrator" under this
24subdivision.
AB948,3 25Section 3. 15.185 (6) of the statutes is created to read:
AB948,4,2
115.185 (6) Office of the student loan ombudsman. There is created in the
2department of financial institutions an office of the student loan ombudsman.
AB948,4 3Section 4 . Subchapter V of chapter 224 [precedes 224.101] of the statutes is
4created to read:
AB948,4,55 Chapter 224
AB948,4,76 Subchapter V
7 STUDENT LOANS
AB948,4,8 8224.101 Definitions. In this subchapter:
AB948,4,9 9(1) “Board” means the higher educational aids board.
AB948,4,11 10(2) “Exempt organization” means the board or a state-regulated financial
11service provider.
AB948,4,12 12(3) “Licensee” means a person holding a license issued under this subchapter.
AB948,4,13 13(4) “Office” means the office of the student loan ombudsman in the department.
AB948,4,14 14(5) “Servicing" means doing all of the following:
AB948,4,1615 (a) Receiving scheduled periodic payments from a student loan borrower
16pursuant to the terms of a student education loan.
AB948,4,1917 (b) Applying the payments of principal and interest and any other payments
18with respect to the amounts received from a student loan borrower as may be
19required pursuant to the terms of a student education loan.
AB948,4,2120 (c) Performing other administrative services with respect to a student
21education loan.
AB948,4,22 22(6) “State-regulated financial service provider” means any of the following:
AB948,4,2323 (a) A bank organized under ch. 221.
AB948,4,2424 (b) A savings bank organized under ch. 214.
AB948,4,2525 (c) A savings and loan association organized under ch. 215.
AB948,5,1
1(d) A credit union organized under ch. 186.
AB948,5,22 (e) A consumer lender licensed under s. 138.09.
AB948,5,5 3(7) “Student education loan" means a loan that is extended to a student loan
4borrower expressly for postsecondary education expenses or related expenses and
5does not include open-end credit or any loan that is secured by real property.
AB948,5,6 6(8) “Student loan borrower" means any of the following:
AB948,5,87 (a) A resident of this state who has received or agreed to pay a student
8education loan.
AB948,5,109 (b) A person who shares legal responsibility with a resident under par. (a) for
10repaying the student education loan.
AB948,5,13 11(9) “Student loan servicer" means a person, wherever located, responsible for
12the servicing of a student education loan, but does not include the board or any
13state-regulated financial service provider.
AB948,5,14 14224.102 Ombudsman services. The office shall do all of the following:
AB948,5,15 15(1) Provide timely assistance to student loan borrowers.
AB948,5,16 16(2) Receive, review, and attempt to resolve complaints from all of the following:
AB948,5,1717 (a) Student loan borrowers.
AB948,5,2018 (b) In collaboration with institutions of higher education, student loan
19servicers and any other participants in student education loan lending, including
20originators servicing their own student education loans.
AB948,5,22 21(3) Compile and analyze data on student loan borrower complaints as
22described in sub. (2) and as resolved under s. 224.104.
AB948,5,24 23(4) Assist student loan borrowers in understanding their rights and
24responsibilities under the terms of student education loans.
AB948,6,3
1(5) Provide information to the public, agencies, the legislature, and others
2regarding the problems and concerns of student loan borrowers and make
3recommendations for resolving those problems and concerns.
AB948,6,6 4(6) Analyze and monitor the development and implementation of federal, state,
5and local laws, ordinances, regulations, rules, and policies relating to student loan
6borrowers and recommend any necessary changes.
AB948,6,8 7(7) Review, as authorized and appropriate, the complete student education
8loan history for a student loan borrower who provides written consent for the review.
AB948,6,13 9(8) Provide sufficient outreach and disseminate information concerning the
10availability of the office to assist student loan borrowers and potential student loan
11borrowers, public institutions of higher education, student loan servicers, and any
12other participants in student education loan lending with any student education
13loan servicing concerns.
AB948,6,16 14(9) Seek the assistance of an exempt organization in the resolution of a student
15loan borrower complaint as described in sub. (2) involving that exempt organization.
16The exempt organization shall cooperate with the office as required by s. 224.104.
AB948,6,18 17(10) Take any other action necessary to fulfill the duties of the office as set forth
18in this subchapter.
AB948,6,22 19224.103 Annual report. The office shall submit a report by January 1 of each
20year to the standing committee of each house of the legislature having jurisdiction
21over matters related to higher education. The report shall include all of the
22following:
AB948,6,24 23(1) A description of actions taken with respect to the implementation of this
24subchapter.
AB948,7,3
1(2) An assessment of the overall effectiveness of the office, including
2information, in the aggregate, regarding student loan borrower complaints
3investigated with the assistance of an exempt organization.
AB948,7,6 4(3) Recommendations regarding additional steps for the department to gain
5regulatory control over licensing and enforcement with respect to student loan
6servicers.
AB948,7,13 7224.104 Assistance by exempt organizations; report. (1) An exempt
8organization that is requested by the office to provide assistance under s. 224.102 (9)
9shall provide, in a timely manner, the information requested by the office necessary
10to investigate and resolve a student loan borrower complaint, including the steps
11taken by the exempt organization to resolve the complaint, or, on its own, shall
12resolve, in a timely manner, the complaint and provide the office with documentation
13regarding the resolution.
AB948,7,16 14(2) Annually, an exempt organization that is involved in the resolution of a
15complaint under this section shall report to the office the number of complaints
16received and the number of complaints resolved by the exempt organization.
AB948,7,20 17224.105 Licensing of student loan servicers. (1) A person, wherever
18located, may not directly or indirectly engage in servicing student education loans
19in this state without first obtaining a license from the office under this section, unless
20the person is exempt from licensure under sub. (2).
AB948,7,22 21(2) The following persons are exempt from the licensing requirement under
22sub. (1):
AB948,7,2323 (a) A state-regulated financial service provider.
AB948,7,2424 (b) The board.
AB948,8,3
1(3) A person seeking to act within this state as a student loan servicer shall
2make a written application to the office for an initial license in the form prescribed
3by the office. The application shall be accompanied by all of the following:
AB948,8,74 (a) A financial statement prepared by a certified public accountant or a public
5accountant, a general partner if the applicant is a partnership, a corporate officer if
6the applicant is a corporation, or a member duly authorized to execute such
7documents if the applicant is a limited liability company or association.
AB948,8,108 (b) Information regarding the history of criminal convictions of the following,
9which information must be sufficient, as determined by the office, to make the
10findings under sub. (4):
AB948,8,1111 1. The applicant.
AB948,8,1212 2. Officers, directors, and principal employees of the applicant.
AB948,8,1413 3. Each individual shareholder, member, or partner who directly or indirectly
14controls 10 percent or more of the ownership interests of the applicant.
AB948,8,1515 (c) A nonrefundable license fee of $1,000.
AB948,8,1616 (d) A nonrefundable investigation fee of $800.
AB948,8,23 17(4) Upon the filing of an application for an initial license and the payment of
18the fees for licensing and investigation under sub. (3), the office shall investigate the
19financial condition and responsibility, financial and business experience, character,
20and general fitness of the applicant. The office may conduct criminal history
21background checks of the applicant and of each partner, member, officer, director,
22and principal employee of the applicant. The office may issue a license if the office
23finds all of the following to be true:
AB948,8,2424 (a) The applicant's financial condition is sound.
AB948,9,3
1(b) The applicant's business will be conducted honestly, fairly, equitably,
2carefully, and efficiently within the purposes and intent of this subchapter and in a
3manner commanding the confidence and trust of the community.
AB948,9,64 (c) No person on behalf of the applicant has knowingly made an incorrect
5statement of a material fact in the application or in any report or statement made
6under this subchapter.
AB948,9,77 (d) The applicant has met any other requirements as determined by the office.
AB948,9,21 8(5) A license issued under this section expires at the close of business on
9September 30 of the odd-numbered year following its issuance, unless renewed or
10earlier surrendered, suspended, or revoked. No later than 15 days after a licensee
11ceases to engage in the business of student education loan servicing in this state for
12any reason, including a business decision to terminate operations in this state,
13license revocation, bankruptcy, or voluntary dissolution, the licensee shall provide
14written notice of surrender to the office and shall surrender to the office its license
15for each location in which the licensee has ceased to engage in such business. The
16written notice of surrender shall identify the location where the records of the
17licensee will be stored and the name, address, and telephone number of an individual
18authorized to provide access to the records. The surrender of a license does not
19reduce or eliminate the licensee's civil or criminal liability arising from acts or
20omissions occurring prior to the surrender of the license, including any
21administrative actions undertaken by the office.
AB948,9,25 22(6) A license issued under this section may be renewed for the ensuing
2324-month period upon the filing of an application containing all required documents
24and fees as provided in this section. A renewal application shall be filed on or before
25September 1 of the year in which the license expires. A renewal application filed with

1the office after September 1 that is accompanied by a $100 late fee is considered to
2be timely and sufficient. If an application for a renewal license has been filed with
3the office on or before the date the license expires, the license continues in effect until
4the issuance by the office of the renewal license applied for or until the office has
5notified the licensee in writing of the office's refusal to issue the renewal license
6together with the grounds on which the refusal is based. The office may refuse to
7issue a renewal license on any ground on which the office may refuse to issue an
8initial license.
AB948,10,12 9(7) An applicant or licensee under this section shall notify the office, in writing,
10of any change in the information provided in the initial application for a license or
11the most recent renewal application for a license, as applicable, not later than 10
12business days after the occurrence of the event that results in the change.
AB948,10,21 13(8) The office may consider an application for a license under this section
14abandoned if the applicant fails to respond to any request for information required
15under this subchapter or any rule promulgated under this subchapter, as long as the
16office notifies the applicant, in writing, that the application will be considered
17abandoned if the applicant fails to submit the information within 60 days after the
18date on which the request for information is made. An application filing fee paid
19prior to the date an application is abandoned under this subsection may not be
20refunded. Abandonment of an application under this subsection does not preclude
21the applicant from submitting a new application for a license under this section.
AB948,11,3 22(9) A licensee may not act within this state as a student loan servicer under any
23name or at any place of business other than that identified in the license. A licensee
24may not change the location of the licensee's place of business without prior written
25notice to the office. Not more than one place of business may be maintained under

1the same license, but the office may issue more than one license to a licensee that
2complies with the provisions of this subchapter as to each license. A license is not
3transferable or assignable.
AB948,11,10 4(10) (a) A student loan servicer shall maintain adequate records of each
5student education loan transaction. Except as otherwise required by federal law, a
6federal student loan education agreement, or a contract between the federal
7government and the student loan servicer, a student loan servicer shall maintain
8these records for not less than 2 years following the final payment on the student
9education loan or the assignment of the student education loan, whichever occurs
10first.
AB948,11,1611 (b) Upon request by the office, a student loan servicer shall make the records
12under par. (a) available or shall send these records to the office by registered or
13certified mail, return receipt requested, or by any express delivery carrier that
14provides a dated delivery receipt, not later than 5 business days after requested by
15the office to do so. The office may grant a licensee additional time to make these
16records available or to send the records to the office.
AB948,11,18 17(11) (a) The office may suspend, revoke, or refuse to renew a license issued
18under this section if the office finds any of the following:
AB948,11,2019 1. That the licensee has violated any provision of this subchapter, any rule
20promulgated thereunder, or any lawful order of the office made thereunder.
AB948,11,2321 2. That any fact or condition exists that, if it had existed at the time of the
22original application for the license, clearly would have warranted a denial of the
23license.
AB948,11,2524 3. That the licensee made a material misstatement in an application for a
25license or in information furnished to the office.
AB948,12,1
14. That the licensee has failed to pay any fee required under this section.
AB948,12,122 (b) The office shall suspend a license issued under this section if the office finds
3that the licensee is an individual who fails to comply, after appropriate notice, with
4a subpoena or warrant issued by the department of workforce development or a
5county child support agency under s. 59.53 (5) and related to paternity or child
6support proceedings or who is delinquent in making court-ordered payments of child
7or family support, maintenance, birth expenses, medical expenses, or other expenses
8related to the support of a child or former spouse, as provided in a memorandum of
9understanding entered into under s. 49.857. A licensee whose license is suspended
10under this paragraph is entitled to a notice and hearing only as provided in a
11memorandum of understanding entered into under s. 49.857 and is not entitled to
12any other notice or hearing under this section.
AB948,12,1713 (c) The office shall revoke a license issued under this section if the department
14of revenue certifies under s. 73.0301 that the licensee is liable for delinquent taxes.
15A licensee whose license is revoked under this paragraph for delinquent taxes is
16entitled to a notice under s. 73.0301 (2) (b) 1. b. and a hearing under s. 73.0301 (5)
17(a) but is not entitled to any other notice or hearing under this section.
AB948,12,2318 (d) The office shall revoke a license issued under this section if the department
19of workforce development certifies under s. 108.227 that the licensee is liable for
20delinquent unemployment insurance contributions. A licensee whose license is
21revoked under this paragraph for delinquent unemployment insurance
22contributions is entitled to a notice under s. 108.227 (2) (b) 1. b. and a hearing under
23s. 108.227 (5) (a) but is not entitled to any other notice or hearing under this section.
AB948,13,324 (e) A person whose license has been suspended, revoked, or refused renewal
25under this subsection may request a hearing under s. 227.44 within 30 days after the

1date of suspension, revocation, or refusal. The office may appoint a hearing examiner
2under s. 227.46 to conduct the hearing. This paragraph does not apply to a
3suspension or revocation under pars. (b) to (d).
AB948,13,64 (f) An abatement of the license fee may not be made if the license is suspended
5or revoked under this subsection or surrendered in connection with a suspension or
6revocation proceeding.
AB948,13,8 7(12) All fees received by the office under this section shall be credited to the
8appropriation account under s. 20.144 (1) (g).
AB948,13,11 9224.106 Student loan servicers. (1) In this section, “nonconforming
10payment" means a payment on a student education loan that is different from the
11required payment.
AB948,13,15 12(2) (a) Except as otherwise provided in federal law, a federal student education
13loan agreement, or a contract between the federal government and a student loan
14servicer, a student loan servicer shall comply with the requirements of this
15subsection.
AB948,13,1816 (b) A student loan servicer shall respond to a written inquiry from a student
17loan borrower or the representative of a student loan borrower within 30 days after
18receiving the inquiry.
AB948,13,2019 (c) Upon receipt of a nonconforming payment on a student education loan, a
20student loan servicer shall do all of the following:
AB948,13,2221 1. Ask the student loan borrower how the student loan borrower prefers the
22student loan servicer to apply the nonconforming payment.
AB948,13,2423 2. Note how the student loan borrower prefers the student loan servicer to
24apply the nonconforming payment.
AB948,14,2
13. Apply the nonconforming payment in the manner preferred by the student
2loan borrower.
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