North Carolina SB 426: Mental Health Protection Act.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 426

Short Title: Student Borrowers' Bill of Rights. (Public)
Sponsors: Senators Galey and Craven (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 25, 2025
*S426-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO ENACT A STUDENT BORROWERS' BILL OF RIGHTS, TO PROVIDE THAT 2
THE COMMISSIONER OF BANKS SHALL LICENSE AND REGULATE STUDENT 3
LOAN SERVICERS, AND TO ESTABLISH THE POSITION OF THE STUDENT LOAN 4
OMBUDSMAN. 5
The General Assembly of North Carolina enacts: 6
SECTION 1.(a) Chapter 53 of the General Statutes is amended by adding a new 7
Article to read: 8
"Article 26. 9
"Student Borrowers' Bill of Rights. 10
"§ 53-440. Short title. 11
This Article may be cited as the Student Borrowers' Bill of Rights. 12
"§ 53-441. Purpose. 13
This Article protects student loan borrowers and their families by providing that the 14
Commissioner of Banks shall license and regulate student loan servicers to ensure that student 15
loan borrowers and their families are treated fairly. 16
"§ 53-442. Definitions. 17
The following definitions apply in this Article: 18
(1) Borrower. – Any of the following: 19
a. An individual residing in this State who has received or agreed to pay 20
a student loan. 21
b. An individual who has received or agreed to pay a student loan or debt 22
to attend an institution located in this State. 23
c. A person that shares responsibility to repay a student loan with an 24
individual described in sub-subdivision a. or b. of this subdivision. 25
(2) Commissioner. – The Commissioner of Banks. 26
(3) Consumer reporting agency. – As defined in 15 U.S.C. § 1681a(f). 27
(4) Control. – The power, directly or indirectly, to direct the management or 28
policy of an entity, whether through ownership of securities, by contract, or 29
otherwise. The following persons are presumed to control an entity: 30
a. A director, general partner, or executive officer of the entity. 31
b. A person that directly or indirectly has ownership of or the power to 32
vote ten percent (10%) or more of a class of outstanding voting 33
securities of the entity. 34
c. In the case of a limited liability company, a managing member. 35

General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 426-First Edition
d. In the case of a partnership, a person that has the right to receive upon 1
dissolution, or has contributed, ten percent (10%) or more of the 2
capital of the partnership. 3
(5) Nationwide Multistate Licensing System and Registry (NMLS). – The 4
licensing system developed and maintained by the Conference of State Bank 5
Supervisors and the American Association of Residential Mortgage 6
Regulators for the licensing of persons under this Article. 7
(6) Overpayment. – A payment on a student loan in excess of the amount due 8
from a borrower for a given period. 9
(7) Partial payment. – A payment on a student loan account that contains one or 10
more individual loans in an amount less than the amount necessary to satisfy 11
the outstanding payment due on all loans in the student loan account. 12
(8) Person. – An individual, partnership, limited liability company, limited 13
partnership, corporation, association, or other group engaged in joint business 14
activities however organized. 15
(9) Servicing. – Engaging in any of the following for compensation or gain: 16
a. Receiving or soliciting any scheduled periodic payment on a student 17
loan from a borrower or any notification that a borrower made a 18
scheduled periodic payment on a student loan and applying a payment 19
to the balance of the student loan. 20
b. During a period when no payment is required on a student loan, 21
maintaining account records for the student loan and communicating 22
with the borrower regarding the student loan on behalf of the owner of 23
the student loan. 24
c. Having the right to receive payments from a borrower when the loan 25
is delinquent or in default. 26
d. Interacting with a borrower to facilitate the activities described in 27
sub-subdivisions a. or b. of this subdivision, including helping a 28
borrower avoid default on a student loan. 29
(10) Student loan. – A loan or agreement that is extended to a borrower expressly 30
to finance postsecondary education expenses or other school-related expenses. 31
This term does not include the following: 32
a. Open-ended credit or any loan secured by real property. 33
b. Loans originated by entities exempted under G.S. 53-443(b), except 34
that loans are not excluded during periods in which they are serviced 35
by an entity not exempted under G.S. 53-443(b). 36
c. Loans serviced by entities exempted under G.S. 53-443(b). 37
(11) Student loan servicer. – Any person, regardless of location, responsible for 38
servicing a student loan. 39
(12) Written inquiry. – Any nonverbal communication in any format, whether 40
electronic or hard copy. A written inquiry does not include a communication 41
made to a consumer reporting a