No. 27387 (Amendment): R765-612. Lender Participation

DAR File No.: 27387
Filed: 09/01/2004, 02:19
Received by: NL

 

RULE ANALYSIS

Purpose of the rule or reason for the change:

In order to align with current market conditions and practices, the Utah Higher Education Assistance Authority (UHEAA) Board of Directors, on August 31, 2004, voted to eliminate the reference and requirement for a lender to be headquartered in Utah in order to provide a UHEAA guarantee for a Federal Stafford, PLUS, or Consolidation loan for any eligible borrower. By eliminating the "headquartered" provision, all lenders currently participating as a UHEAA partner lender will be treated equally and can make student loans to any eligible borrower.

 

Summary of the rule or change:

The UHEAA Board of Directors voted to eliminate the requirement of a lender or entity to be headquartered in Utah in order to offer loans to any eligible borrower of student loans. UHEAA will offer loan guarantees for any eligible borrower seeking a loan through any eligible UHEAA partner lender participating in the Federal Family Education Loan Program, which maintains a full service office in Utah.

 

State statutory or constitutional authorization for this rule:

Subsection 53B-12-101(6)

 

Anticipated cost or savings to:

the state budget:

There are no associated costs nor savings to the state budget as a result of this amendment since this rule change pertains to participating lenders ability to make loans to eligible borrowers.

 

local governments:

There are no anticipated costs nor savings to local governments as a result of this amendment since the rule only involves the ability of lenders to participate in, and make loans to eligible borrowers, the Federal Family Educational Loan Program.

 

other persons:

There are no anticipated costs nor savings that affect any individual as a result of this amendment because this rule only pertains to lending institutions participating in the Federal Family Educational Loan Program.

 

Compliance costs for affected persons:

There are no compliance issues nor costs for any individual or entity. This amendment imposes no compliance costs for any person, corporation, association, governmental entity or public or private organization.

 

Comments by the department head on the fiscal impact the rule may have on businesses:

This rule change will permit participating Utah banks to possibly increase loan volume and thus revenue.

 

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Regents (Board Of)
Administration
BOARD OF REGENTS BUILDING, THE GATEWAY
60 SOUTH 400 WEST
SALT LAKE CITY UT 84101-1284

 

Direct questions regarding this rule to:

Ronell Crossley at the above address, by phone at 801-321-7291, by FAX at 801-321-7299, or by Internet E-mail at [e-mail]

 

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

10/15/2004

 

This rule may become effective on:

10/16/2004

 

Authorized by:

Mark H. Spencer, Acting Executive Director

 

 

RULE TEXT

R765. Regents (Board of), Administration.

R765-612. Lender Participation.

R765-612-1. Purpose.

To establish the lender eligibility requirements for participation as an originating lender in the UHEAA loan program.

 

R765-612-2. References.

2.1 Utah Code Annotated Title 53B, Chapter 12.

2.2 Higher Education Act of 1965, as amended.

 

R765-612-3. Definitions.

3.1 Originating Lender. A lending institution which originates Federal Stafford, PLUS, SLS or Consolidation Loans.

3.2 Located in Utah. With respect to this rule, a lender is located in Utah if the lender has an office in Utah where the lender's full range of products and services is available to the lender's customers for routine business transactions. An office established for the sole purpose of collecting student loan applications is not sufficient to qualify a lender as being located in Utah.[

3.3 Headquartered. With respect to this rule, the state in which a lender or entity is headquartered is determined by the location of its primary administrative center.

3.4 Affiliation. With respect to this rule, an affiliation exists between schools if a school is under common control with another school and the controlling entity is headquartered in Utah.]

 

R765-612-4. Policy.

4.1 To participate as an originating lender in the UHEAA loan program, a lender must:

4.1.1 be located in Utah;

4.1.2 be an eligible lender as defined by the Higher Education Act of 1965, as amended;

4.1.3 obtain a six-digit lender identification number issued by the U.S. Department of Education; and

4.1.4 execute an "Agreement to Guarantee Loans" with UHEAA.

4.2 A lender which meets the requirements of 4.1 may make loans guaranteed by UHEAA to any eligible borrower.[ who:

4.2.1 attends a school which is located in Utah or has an affiliation with a school located in Utah;or

4.2.2 is a Utah resident, or a non-Utah resident who has previously received a loan guaranteed by UHEAA.

4.3 A lender which meets the requirements of 4.1 and is headquartered in Utah may make loans guaranteed by UHEAA to any eligible borrower.]

4.[4]3 A lender which participates in the UHEAA loan program is considered pre-approved.

4.[5]4 By disbursing the loan, the lender acknowledges its approval of the loan.

4.[6]5 A guarantee issued by UHEAA may be cancelled by the lender, if the lender does not grant approval of the loan.

4.[7]6 If the lender violates or fails to comply with the provisions of this policy or the Higher Education Act of 1965, as amended, the lender will be liable for any penalties, claims, actions and expenses relating to the violation. In addition, the lender may be subject to limitation, suspension or termination under the Higher Education Act of 1965, as amended.

 

KEY: higher education, student loans[*]

[December 4, 2001]2004

Notice of Continuation January 4, 2002

53B-12-101(6)