Private Student Lender Registry

What companies are required to register under Article 15?

Any “student financing company” must register if it is not otherwise exempt from the law.

What’s the definition of “student financing company?”

The phrase is defined as a company that makes or extends credit to a student for postsecondary education, or a holder of debt or obligation owed or incurred by a student to finance postsecondary education.

What are the important qualifications and exemptions?

Qualifications:

• The law applies if the student is located in the State of Maine
• The education being financed need not be provided in-person, but also includes education provided “by correspondence or by the Internet”

Exemptions – The law does not apply:

• To extensions of credit that are made, insured or guaranteed under the federal Higher Education Act of 1965; 20 USC, Ch. 28, Sub-ch. IV
• If the financing includes a loan secured by real property or a dwelling
• If the creditor is (as defined by state law) a supervisor financial organization, a financial institution holding company, a mutual holding company, or a wholly-owned subsidiary of any of those entities; or if the creditor is the Finance Authority of Maine.

Does the law apply to federal banks or their subsidiaries?

Yes, unless state jurisdiction, in the language of the state law, “is preempted by federal law.”

Are schools, wherever located, that provide secondary education to students located in Maine, subject to this law?

Yes, whether or not the schools are accredited as postsecondary educational institutions in this state, if they extend credit to students or cause the consumer to incur a debt, by contract or otherwise, unless they are otherwise specifically exempted, such as if the debt instruments are federally made, insured or guaranteed.

What must a student financing company subject to the law, do to comply?

The company must:

• Register, including submitting a fee of $500 annually
• For any students located in Maine whose educations have been financed by the student financing company, submit a list of all schools provided educations to those students, and the number of financing arrangement for each school
• List the total number of financing transactions made to students residing in Maine
• Disclose the default rate for students who have obtained financing transactions from the student financing company
• Submit sample copies of all promissory notes, agreements contracts or other instruments used by the company to extend student financing.

By what date must student financing companies register under the law?

Initial registrations must be submitted on or before January 31, 2023, and on or before January 31 of each subsequent year. This date was selected because the law requires registrants to provide data “for the previous year,” meaning that registrations filed by January 31, 2023 will include information relating to educational financing transactions completed through the end of the previous calendar year (December 31, 2022). Pursuant to Article 16 (see Article 16 FAQs below), student financing companies (termed “private education lenders” in Article 16) will be required to become licensed as supervised lenders. Registration and reporting under this Article 15, therefore, will be accomplished at the same time as the “annual notification” and reporting of loan volume required of all consumer lenders pursuant to Article VI, Part 2.

Will the information submitted become public?

Yes – under the law’s provisions, the Bureau is required to list the information, or a summary of the information, on a publicly available website.

Are there penalties for noncompliance?

Yes – failure to comply is a Class E crime, subject to fines and other penalties. In addition, a student financing company is subject to a private right of action brought by any person harmed by noncompliance.