1. Defrauding or misleading a student loan borrower.
2. Engaging in an unfair or deceptive practice or misrepresenting or omitting
material information in connection with the servicing of a student education loan.
3. Misapplying student education loan payments.
4. Providing inaccurate information to a credit bureau related to a student loan
borrower's creditworthiness.
5. Refusing to communicate with an authorized representative of a student
loan borrower.
6. Failing to evaluate a student loan borrower for an income-based repayment
program prior to placing the student loan borrower in default.
The bill also specifies the authority of the office to conduct investigations and
examinations and take administrative action and also provides a private right of
action for violations of the requirements or prohibitions under the bill.
The bill requires the office to perform certain functions, including: 1) assisting
student loan borrowers; 2) receiving and attempting to resolve complaints from
student loan borrowers and others; 3) compiling and analyzing data about these
complaints; 4) assisting student loan borrowers in various ways; 5) providing
information to the public and others regarding the problems and concerns of student
loan borrowers; and 6) analyzing and monitoring the development and
implementation of laws and policies relating to student loan borrowers.
Although the bill exempts certain state-regulated financial service providers,
primarily state-chartered financial institutions, from licensing and most other
requirements applicable to student loan servicers, the bill requires these exempt
organizations to cooperate with the office and provide information requested by the
office necessary to investigate and resolve student loan borrower complaints.
For further information see the state fiscal estimate, which will be printed as
an appendix to this bill.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB711,1
1Section 1. 15.01 (6) of the statutes is amended to read:
AB711,3,132 15.01 (6) “Division," “bureau," “section," and “unit" means the subunits of a
3department or an independent agency, whether specifically created by law or created
4by the head of the department or the independent agency for the more economic and
5efficient administration and operation of the programs assigned to the department
6or independent agency. The office of credit unions and the office of the student loan
7ombudsman
in the department of financial institutions, the office of the inspector
8general in the department of children and families, the office of the inspector general
9in the department of health services, and the office of children's mental health in the
10department of health services have the meaning of “division" under this subsection.
11The office of the long-term care ombudsman under the board on aging and long-term
12care and the office of educational accountability in the department of public
13instruction have the meaning of “bureau" under this subsection.
AB711,2 14Section 2. 15.02 (3) (c) 1. of the statutes is amended to read:
AB711,3,2215 15.02 (3) (c) 1. The principal subunit of the department is the “division". Each
16division shall be headed by an “administrator". The office of credit unions and the
17office of the student loan ombudsman
in the department of financial institutions and
18the office of children's mental health in the department of health services have the
19meaning of “division" and the director of credit unions in the department of financial
20institutions and the director of the office of children's mental health in the
21department of health services have the meaning of “administrator" under this
22subdivision.
AB711,3 23Section 3. 15.185 (6) of the statutes is created to read:
AB711,3,2524 15.185 (6) Office of the student loan ombudsman. There is created in the
25department of financial institutions an office of the student loan ombudsman.
AB711,4
1Section 4. Subchapter V of chapter 224 [precedes 224.101] of the statutes is
2created to read:
AB711,4,33 Chapter 224
AB711,4,54 Subchapter V
5 STUDENT LOANS
AB711,4,6 6224.101 Definitions. In this subchapter:
AB711,4,7 7(1) “Board” means the higher educational aids board.
AB711,4,9 8(2) “Exempt organization” means the board or a state-regulated financial
9service provider.
AB711,4,10 10(3) “Licensee” means a person holding a license issued under this subchapter.
AB711,4,11 11(4) “Office” means the office of the student loan ombudsman in the department.
AB711,4,12 12(5) “Servicing" means doing all of the following:
AB711,4,1413 (a) Receiving scheduled periodic payments from a student loan borrower
14pursuant to the terms of a student education loan.
AB711,4,1715 (b) Applying the payments of principal and interest and any other payments
16with respect to the amounts received from a student loan borrower as may be
17required pursuant to the terms of a student education loan.
AB711,4,1918 (c) Performing other administrative services with respect to a student
19education loan.
AB711,4,20 20(6) “State-regulated financial service provider” means any of the following:
AB711,4,2121 (a) A bank organized under ch. 221.
AB711,4,2222 (b) A savings bank organized under ch. 214.
AB711,4,2323 (c) A savings and loan association organized under ch. 215.
AB711,4,2424 (d) A credit union organized under ch. 186.
AB711,4,2525 (e) A consumer lender licensed under s. 138.09.
AB711,5,3
1(7) “Student education loan" means a loan that is extended to a student loan
2borrower expressly for postsecondary education expenses or related expenses and
3does not include open-end credit or any loan that is secured by real property.
AB711,5,4 4(8) “Student loan borrower" means any of the following:
AB711,5,65 (a) A resident of this state who has received or agreed to pay a student
6education loan.
AB711,5,87 (b) A person who shares legal responsibility with a resident under par. (a) for
8repaying the student education loan.
AB711,5,11 9(9) “Student loan servicer" means a person, wherever located, responsible for
10the servicing of a student education loan, but does not include the board or any
11state-regulated financial service provider.
AB711,5,12 12224.102 Ombudsman services. The office shall do all of the following:
AB711,5,13 13(1) Provide timely assistance to student loan borrowers.
AB711,5,14 14(2) Receive, review, and attempt to resolve complaints from all of the following:
AB711,5,1515 (a) Student loan borrowers.
AB711,5,1816 (b) In collaboration with institutions of higher education, student loan
17servicers and any other participants in student education loan lending, including
18originators servicing their own student education loans.
AB711,5,20 19(3) Compile and analyze data on student loan borrower complaints as
20described in sub. (2) and as resolved under s. 224.104.
AB711,5,22 21(4) Assist student loan borrowers in understanding their rights and
22responsibilities under the terms of student education loans.
AB711,5,25 23(5) Provide information to the public, agencies, the legislature, and others
24regarding the problems and concerns of student loan borrowers and make
25recommendations for resolving those problems and concerns.
AB711,6,3
1(6) Analyze and monitor the development and implementation of federal, state,
2and local laws, ordinances, regulations, rules, and policies relating to student loan
3borrowers and recommend any necessary changes.
AB711,6,5 4(7) Review, as authorized and appropriate, the complete student education
5loan history for a student loan borrower who provides written consent for the review.
AB711,6,10 6(8) Provide sufficient outreach and disseminate information concerning the
7availability of the office to assist student loan borrowers and potential student loan
8borrowers, public institutions of higher education, student loan servicers, and any
9other participants in student education loan lending with any student education
10loan servicing concerns.
AB711,6,13 11(9) Seek the assistance of an exempt organization in the resolution of a student
12loan borrower complaint as described in sub. (2) involving that exempt organization.
13The exempt organization shall cooperate with the office as required by s. 224.104.
AB711,6,15 14(10) Take any other action necessary to fulfill the duties of the office as set forth
15in this subchapter.
AB711,6,19 16224.103 Annual report. The office shall submit a report by January 1 of each
17year to the standing committee of each house of the legislature having jurisdiction
18over matters related to higher education. The report shall include all of the
19following:
AB711,6,21 20(1) A description of actions taken with respect to the implementation of this
21subchapter.
AB711,6,24 22(2) An assessment of the overall effectiveness of the office, including
23information, in the aggregate, regarding student loan borrower complaints
24investigated with the assistance of an exempt organization.
AB711,7,3
1(3) Recommendations regarding additional steps for the department to gain
2regulatory control over licensing and enforcement with respect to student loan
3servicers.
AB711,7,10 4224.104 Assistance by exempt organizations; report. (1) An exempt
5organization that is requested by the office to provide assistance under s. 224.102 (9)
6shall provide, in a timely manner, the information requested by the office necessary
7to investigate and resolve a student loan borrower complaint, including the steps
8taken by the exempt organization to resolve the complaint, or, on its own, shall
9resolve, in a timely manner, the complaint and provide the office with documentation
10regarding the resolution.
AB711,7,13 11(2) Annually, an exempt organization that is involved in the resolution of a
12complaint under this section shall report to the office the number of complaints
13received and the number of complaints resolved by the exempt organization.
AB711,7,17 14224.105 Licensing of student loan servicers. (1) A person, wherever
15located, may not directly or indirectly engage in servicing student education loans
16in this state without first obtaining a license from the office under this section, unless
17the person is exempt from licensure under sub. (2).
AB711,7,19 18(2) The following persons are exempt from the licensing requirement under
19sub. (1):
AB711,7,2020 (a) A state-regulated financial service provider.
AB711,7,2121 (b) The board.
AB711,7,24 22(3) A person seeking to act within this state as a student loan servicer shall
23make a written application to the office for an initial license in the form prescribed
24by the office. The application shall be accompanied by all of the following:
AB711,8,4
1(a) A financial statement prepared by a certified public accountant or a public
2accountant, a general partner if the applicant is a partnership, a corporate officer if
3the applicant is a corporation, or a member duly authorized to execute such
4documents if the applicant is a limited liability company or association.
AB711,8,75 (b) Information regarding the history of criminal convictions of the following,
6which information must be sufficient, as determined by the office, to make the
7findings under sub. (4):
AB711,8,88 1. The applicant.
AB711,8,99 2. Officers, directors, and principal employees of the applicant.
AB711,8,1110 3. Each individual shareholder, member, or partner who directly or indirectly
11controls 10 percent or more of the ownership interests of the applicant.
AB711,8,1212 (c) A nonrefundable license fee of $1,000.
AB711,8,1313 (d) A nonrefundable investigation fee of $800.
AB711,8,20 14(4) Upon the filing of an application for an initial license and the payment of
15the fees for licensing and investigation under sub. (3), the office shall investigate the
16financial condition and responsibility, financial and business experience, character,
17and general fitness of the applicant. The office may conduct criminal history
18background checks of the applicant and of each partner, member, officer, director,
19and principal employee of the applicant. The office may issue a license if the office
20finds all of the following to be true:
AB711,8,2121 (a) The applicant's financial condition is sound.
AB711,8,2422 (b) The applicant's business will be conducted honestly, fairly, equitably,
23carefully, and efficiently within the purposes and intent of this subchapter and in a
24manner commanding the confidence and trust of the community.
AB711,9,3
1(c) No person on behalf of the applicant has knowingly made an incorrect
2statement of a material fact in the application or in any report or statement made
3under this subchapter.
AB711,9,44 (d) The applicant has met any other requirements as determined by the office.
AB711,9,18 5(5) A license issued under this section expires at the close of business on
6September 30 of the odd-numbered year following its issuance, unless renewed or
7earlier surrendered, suspended, or revoked. No later than 15 days after a licensee
8ceases to engage in the business of student education loan servicing in this state for
9any reason, including a business decision to terminate operations in this state,
10license revocation, bankruptcy, or voluntary dissolution, the licensee shall provide
11written notice of surrender to the office and shall surrender to the office its license
12for each location in which the licensee has ceased to engage in such business. The
13written notice of surrender shall identify the location where the records of the
14licensee will be stored and the name, address, and telephone number of an individual
15authorized to provide access to the records. The surrender of a license does not
16reduce or eliminate the licensee's civil or criminal liability arising from acts or
17omissions occurring prior to the surrender of the license, including any
18administrative actions undertaken by the office.
AB711,9,25 19(6) A license issued under this section may be renewed for the ensuing
2024-month period upon the filing of an application containing all required documents
21and fees as provided in this section. A renewal application shall be filed on or before
22September 1 of the year in which the license expires. A renewal application filed with
23the office after September 1 that is accompanied by a $100 late fee is considered to
24be timely and sufficient. If an application for a renewal license has been filed with
25the office on or before the date the license expires, the license continues in effect until

1the issuance by the office of the renewal license applied for or until the office has
2notified the licensee in writing of the office's refusal to issue the renewal license
3together with the grounds on which the refusal is based. The office may refuse to
4issue a renewal license on any ground on which the office may refuse to issue an
5initial license.
AB711,10,9 6(7) An applicant or licensee under this section shall notify the office, in writing,
7of any change in the information provided in the initial application for a license or
8the most recent renewal application for a license, as applicable, not later than 10
9business days after the occurrence of the event that results in the change.
AB711,10,18 10(8) The office may consider an application for a license under this section
11abandoned if the applicant fails to respond to any request for information required
12under this subchapter or any rule promulgated under this subchapter, as long as the
13office notifies the applicant, in writing, that the application will be considered
14abandoned if the applicant fails to submit the information within 60 days after the
15date on which the request for information is made. An application filing fee paid
16prior to the date an application is abandoned under this subsection may not be
17refunded. Abandonment of an application under this subsection does not preclude
18the applicant from submitting a new application for a license under this section.
AB711,10,25 19(9) A licensee may not act within this state as a student loan servicer under any
20name or at any place of business other than that identified in the license. A licensee
21may not change the location of the licensee's place of business without prior written
22notice to the office. Not more than one place of business may be maintained under
23the same license, but the office may issue more than one license to a licensee that
24complies with the provisions of this subchapter as to each license. A license is not
25transferable or assignable.
AB711,11,7
1(10) (a) A student loan servicer shall maintain adequate records of each
2student education loan transaction. Except as otherwise required by federal law, a
3federal student loan education agreement, or a contract between the federal
4government and the student loan servicer, a student loan servicer shall maintain
5these records for not less than 2 years following the final payment on the student
6education loan or the assignment of the student education loan, whichever occurs
7first.
AB711,11,138 (b) Upon request by the office, a student loan servicer shall make the records
9under par. (a) available or shall send these records to the office by registered or
10certified mail, return receipt requested, or by any express delivery carrier that
11provides a dated delivery receipt, not later than 5 business days after requested by
12the office to do so. The office may grant a licensee additional time to make these
13records available or to send the records to the office.
AB711,11,15 14(11) (a) The office may suspend, revoke, or refuse to renew a license issued
15under this section if the office finds any of the following:
AB711,11,1716 1. That the licensee has violated any provision of this subchapter, any rule
17promulgated thereunder, or any lawful order of the office made thereunder.
AB711,11,2018 2. That any fact or condition exists that, if it had existed at the time of the
19original application for the license, clearly would have warranted a denial of the
20license.
AB711,11,2221 3. That the licensee made a material misstatement in an application for a
22license or in information furnished to the office.
AB711,11,2323 4. That the licensee has failed to pay any fee required under this section.
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