California Student Loan Servicer License Bond
The State of California Department of Financial Protection and Innovation started regulating Student Loan Servicers who are operating as a Qualified Education Loan Servicer. The Student Loan Servicing Act requires any person who engages in the business of servicing a student loan in the state of CA to be licensed if they are engaged in any of the following activities related to a student loan:
1. Performing both of the following:
- Receiving any scheduled periodic payments from a borrower or any notification that a borrower made a scheduled periodic payment.
- Applying payments to a borrower’s account pursuant to the terms of the student loan or the contract governing the servicing.
2. During a period when no payment is required on a student loan, performing both of the following:
- Maintaining account records for the student loan.
- Communicating with the borrower regarding the student loan on behalf of the owner of the student loan promissory note.
3. Interacting with a borrower related to that borrower’s student loan, with the goal of helping the borrower avoid default on his or her student loan or facilitating the activities described in paragraph 1 or 2 of the CA SLS Act Requirements
Licensees must post and maintain a surety bond payable to the commissioner in an amount that corresponds with the dollar amount of loans serviced during the previous calendar year.
|Dollar amount of Loans Serviced ||Bond Amount Required||Surety Bond Cost*|
|0 - $50,000||$25,000||$250 per year|
|$50,001 - $100,000||$50,000||$500 per year|
|$100,001 - $250,000||$75,000||$750 per year|
|Over $250,000||$100,000||$1000 per year|
*Bond cost are dependent upon qualification of applicant(s)
For licenses with multiple license locations, only one surety bond is required that covers the aggregate requirement for all locations.
Please see the CA DFPI Student Loan Servicing (SLS) Act Requirements for more detailed information on the license and bonding requirements.