Committee advances bill requiring private nonprofit postsecondary institutions that service loans to file annual reports

The Senate Banking Committee reported out S.7752, sponsored by Senator James Sanders Jr., a proposal to amend the Financial Services Law to require private, not-for-profit postsecondary providers that service student loans to submit an annual report about the loan services they provide.

Committee members asked whether the measure applied to loan servicers such as credit unions or to educational institutions themselves. A committee staff member clarified: "So it they are ultimately servicing their own, loans to these students." Bobby Vardette, Senate Programming Council, explained that some other states maintain private student loan databases and that the information proposed by this bill is not currently collected by the Department of Financial Services (DFS) for its private student loan database; the sponsor's intent is to add this reporting so it can be aggregated.

Members also noted the Assembly sponsor had amended its companion bill, changing the statutory references and language. One senator asked for an update on coordination with the Assembly; the chair said discussions were ongoing and the committee would "stay firm and reconcile" the differences. After discussion, the committee voted to report the bill out; the transcript indicates the item "has been reported out" and that there was "1 nay" recorded in the committee discussion, though no roll-call names were attached to that negative vote in the transcript.

The sponsor and staff said the measure is meant to increase transparency about private institutions that service loans and to help regulators and policymakers better understand private student-lending practices.