1788.201. For purposes of this title, the following definitions apply:
(a) “Borrower” or “student loan borrower” means a person who has received or agreed to pay a private education loan.
(b) “Consumer report” and “consumer reporting agency” shall each have the same meaning that these terms have under the federal Fair Credit Reporting Act (15 U.S.C. Sec. 1681 et seq.).
(c) (1) “Cosigner” means any individual who is liable for the obligation of another without compensation, regardless of how the individual is designated in the contract or instrument with respect to that obligation, including an obligation under a private education loan extended to consolidate a borrower’s preexisting private education loans, and shall include any person whose signature is requested as a condition to grant credit or to forbear on collection.
(2) “Cosigner” does not include a spouse of an individual described in paragraph (1), the signature of whom is needed to perfect the security interest in a loan.
(d) “Creditor” means any of the following:
(1) The original creditor, where ownership of a private education loan has not been sold, assigned, or transferred.
(2) The person or entity that owned the private education loan at the time the private education loan defaulted, even if that person or entity did not originate the private education loan, and where such a private education loan has not subsequently been sold, transferred, or assigned.
(3) A person or entity that purchased a defaulted private education loan, whether it collects the private education loan itself or hires a third party for collection, or hires an attorney for collection litigation.
(e) “Debtor” means a borrower, cosigner, or other person that owes or is alleged to owe an unpaid amount on a private education loan.
(f) (1) “Exempt entity” means an entity that meets both of the following requirements:
(A) It is a depository institution as defined in Section 1420 of the Financial Code.
(B) It, together with its affiliates, will be, in the aggregate, a plaintiff in 35 or fewer private student loan collection actions in the current calendar year. Private education loans assigned to a third party for the purposes of collection shall count towards the numerical limit set forth in this subparagraph.
(2) For purposes of this subdivision, an entity is an “affiliate” of another specified entity if it directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, the other specified entity.
(g) “Original creditor” means the private education lender identified in a promissory note, loan agreement, or loan contract entered into with a student loan borrower or cosigner.
(h) “Private education lender” means either of the following:
(1) Any person or entity engaged in the business of securing, making, or extending private education loans.
(2) Any holder of a private education loan.
(i) “Private education loan” means an extension of credit that meets all of the following conditions:
(1) Is not made, insured, or guaranteed under Title IV of the Higher Education Act of 1965 (20 U.S.C. Sec. 1070 et seq.).
(2) Is extended to a consumer expressly, in whole or in part, for postsecondary educational expenses, regardless of whether the loan is provided by the educational institution that the student attends.
(3) Does not include open-end credit or any loan that is secured by real property or a dwelling.
(4) Does not include an extension of credit in which the covered educational institution is the original creditor if either:
(A) The term of the extension of credit is 90 days or less.
(B) An interest rate will not be applied to the credit balance and the term of the extension of credit is one year or less, even if the credit is payable in more than four installments.
(j) “Private education loan collection action” means any suit, arbitration, or other legal proceeding in which a claim is asserted to collect a private education loan.
(k) “Private education loan collector” means a person, other than a private education lender, collecting or attempting to collect on a defaulted private education loan.
(Added by Stats. 2021, Ch. 559, Sec. 1. (AB 424) Effective January 1, 2022. Operative July 1, 2022, pursuant to Section 1788.211.)