August 17, 2020
If this passes, a lot of loan companies might not offer as much in California’
This week, a recently resurrected bill that would add consumer protections for student loan borrowers and establish a Student Borrower Bill of Rights in California is expected to be heard in the Senate Appropriations Committee, one of the last hurdles towards passage.
AB 376 and the overhaul of the student loan industry in California
Assembly Bill 376, written by Assemblyman Mark Stone (D-Scotts Valley), would add new requirements for those giving student loans including timely posting, processing, and crediting of student loan payments. “Abusive” practices, such as overpayments and late fees, would also be overhauled, with new standards being put in place to make sure that those giving loans are properly trained and records are accurately kept. Those with loans who have been wronged by the new rules can also sue a loan provider, as long as notice is given beforehand so they could fix whatever part of the bill is being violated
A student loan Ombudsman position would also be created by July of 2021 to over see the new perimeters given by AB 376, as well as oversee all complaints. They would work with the Department of Justice and the Office of Student Assistance and Relief in addressing and referring complaints, as well as refer complaints and report requirements for any part of AB 376 broken by loan companies.
The Commissioner of Business Oversight would also monitor the risks for consumers in the student loan industry and collect data on the industry by July 2021. The commissioner would also need audited financial statements from larger loan companies with a net worth of more than $250,000 owned by a private holding company to confirm student loan licenses.