286.12 -080 Prohibited practices. (1) As used in this section, 'consumer reporting agency' means a consumer reporting agency that compiles and maintains files on a nationwide basis as defined in the Fair Credit Reporting Act, 15 U.S.C. sec. 1681a(p). (2) A student education loan servicer shall not engage in abusive acts or practices, including but not limited to acts or practices that: (a) Materially interfere with the ability of a borrower to clarify a term or condition of a student education loan; or (b) Fail to educate and inform the borrowe r of any of the following: 1. The material risks, costs, or conditions of a student education loan; 2. Selecting or using a student education loan or a feature, term, or condition of a student education loan; or 3. Accurate and relevant information related to loan payments of the loans serviced by the servicer. (3) A student education loan servicer shall not: (a) Employ any scheme, device, or artifice to defraud or mislead a borrower; (b) Engage in any unfair, deceptive, or predatory practice toward any bor rower or misrepresent or omit any material information in connection with servicing a student education loan, including but not limited in any unfair, deceptive, or predatory practice toward any bor rower or misrepresent or omit any material information in connection with servicing a student education loan, including but not limited to: 1. Misrepresenting the: a. Amount, nature, or terms of any fee or payment due or claimed to be due on a student educ ation loan; b. Terms and conditions of the student education loan agreement or any modification to the agreement; or c. Borrower's obligations under the student education loan; and 2. With respect to a military borrower, older borrower, borrower working in public service, or a borrower with a disability, misrepresenting or omitting the availability of a program or protection specific to the respective borrower or applicable to the respe ctive category of borrowers; (c) Misapply payments made by a borrower to the outstanding loan balance; (d) Refuse to communicate with an authorized representative of the borrower, except the servicer may adopt reasonable procedures for: 1. Requesting verif ying documentation that the representative is in fact authorized to act on behalf of the borrower; and 2. of the borrower, except the servicer may adopt reasonable procedures for: 1. Requesting verif ying documentation that the representative is in fact authorized to act on behalf of the borrower; and 2. Protecting the borrower from fraud or abusive practices; (e) Make any false statement or omit a material fact in connection with any information or re port filed with a governmental agency or in connection with any investigation conducted by the commissioner or any other governmental agency; (f) If the student education loan servicer is required to report, or voluntarily reports, to a consumer reporting agency, fail to accurately report each borrower's payment performance to a least one (1) consumer reporting agency upon acceptance as a data furnisher by that consumer reporting agency; or (g) Fail to respond to: 1. Written correspondence from, or on behal f of, a borrower within a reasonable time as prescribed by the commissioner in administrative regulation; 2. A communication from the commissioner or the commissioner's examiner or designated representative, as applicable, within ten (10) business days or within a shorter, reasonable time as the commissioner or the commissioner's e commissioner or the commissioner's examiner or designated representative, as applicable, within ten (10) business days or within a shorter, reasonable time as the commissioner or the commissioner's examiner or designated representative may provide in the communication; or 3. A borrower complaint submitted to the servicer by the commissioner or the commissioner's examiner or d esignated representative, as applicable, within ten (10) business days of receipt of the complaint, or upon request from the servicer explaining why the additional time is reasonable and necessary, a longer time as the commissioner or the commissioner's ex aminer or designated representative may permit, not to exceed forty -five (45) days. Effective: July 14, 2022 History: Created 2022 Ky. Acts ch. 88, sec. 9, effective July 14, 2022.
Kentucky Legal Code