New York Assembly Bill A01146

New York 2025-2026 Regular Session

• Introduced: 1/9/25
• Refer: 1/9/25
• Refer: 1/7/26

Caption

Establishes the student loan borrower bill of rights to protect borrowers and ensure that student loan servicers act more as loan counselors than debt collectors.

Summary

This bill creates a “student loan borrower bill of rights” in New York law by adding a new section to the Education Law. It establishes a student loan ombudsperson within the Department of Financial Services to help borrowers resolve complaints, explain borrower rights and repayment options, review loan histories with consent, and provide public education about student loans. The ombudsperson would also compile complaint data, monitor relevant laws and policies, and make recommendations to the commissioner and the Legislature. The bill also creates a state licensing regime for student loan servicers. Anyone servicing student education loans in New York would generally need a license from the commissioner, subject to exemptions for banks and certain credit union entities. The commissioner would review applicants’ financial condition, business practices, and character, and could renew, suspend, revoke, or refuse licenses based on compliance and fitness standards. The bill sets recordkeeping requirements, requires notice when a servicer exits the business, and authorizes examinations and investigations by the department.

Impact

The bill would amend the Education Law by adding new consumer-protection and regulatory provisions governing student loan servicing. It would expand the Department of Financial Services’ authority over student loan servicers, create a new ombudsperson office, and impose licensing, conduct, reporting, and enforcement requirements on servicers operating in New York. It would also require annual reporting to the governor and Legislature beginning in 2028, and it would fund borrower education efforts through licensing and enforcement-related fees and penalties.

Sentiment

Based on the bill caption and the absence of recorded votes or committee transcripts, the available context suggests the measure is framed positively as a borrower-protection bill. Its stated purpose is to protect borrowers and make servicers act more like counselors than debt collectors, indicating a consumer-focused and reform-oriented approach. No contrary sentiment is documented in the provided materials.

Contention

The main points of potential contention are the new regulatory burden on student loan servicers and the scope of state oversight. Servicers would face licensing, examination, reporting, recordkeeping, and conduct restrictions, while banks and certain credit union affiliates are exempted, which could raise questions about competitive fairness and regulatory reach. Another possible issue is the bill’s broad enforcement authority for the commissioner and the requirement that servicers comply with federal law, which may be viewed as strengthening borrower protections but also increasing compliance costs and administrative complexity.