D.C. Mun. Regs. tit. 26, r. 26-C3004

Current through Register Vol. 72, No. 2, January 10, 2025

Rule 26-C3004 - SURETY BOND REQUIREMENT

3004.1

An applicant for a student loan servicer license shall file a surety bond in a form prescribed by the Commissioner with each original application and any renewal application.

3004.2

The surety bond shall:

(a) Run to the Commissioner for the benefit of:

(1) The District and any person or entity who has been damaged by a licensee as a result of violating the Act, these regulations, or any order governing the activities of a student loan servicer as determined by the Commissioner; or

(2) The recovery of fines, fees, or expenses levied against a licensee pursuant to the Act;

(b) Be issued by an insurer authorized to do business in the District;

(c) Be conditioned upon the applicant:

(1) Complying with all District and federal laws regulating the activities of student loan servicers;

(2) Performing all written agreements with student loan borrowers; and

(3) Accounting for all funds received by the licensee in conformity with a standard system of accounting;

(d) Be continuously maintained thereafter for as long as any license issued under the Act and this chapter remains in force; and

(e) Be issued in the applicant's legal name and include any trade names, if applicable.

3004.3

Each student loan servicer licensee shall maintain a continuous surety bond in the amount of fifty thousand dollars ($50,000) at all times as a condition of licensure.

3004.4

When an action is commenced on a licensee's bond, the Commissioner may require the filing of a new bond pursuant to the requirements of this section.

3004.5

Immediately upon recovery or upon any action on the bond, the licensee shall file a new bond pursuant to the requirements of this section.

3004.6

Any person or entity who may be damaged by the noncompliance of a licensee with any condition of the bond may proceed on the bond against the principal or surety, or both, to recover damages.

3004.7

Regardless of the number of years the bond remains in effect, the number of premiums paid, the number of renewals of the license, or the number of claims made, the aggregate liability under each bond shall not exceed the penal sum of the bond.

D.C. Mun. Regs. tit. 26, r. 26-C3004

Final Rulemaking published at 65 DCR 8395 (8/10/2018)