New York Laws
Article 13-B - Student Lending Accountability, Transparency and Enforcement Act
630 - Penalties.

§ 630. Penalties. 1. If after providing notice and an opportunity for
a hearing the department determines that a covered institution or
lending institution has violated any terms or provisions of this
article, then the covered institution or lending institution may be
liable for a civil penalty. Regardless of the department's determination
that a covered institution or lending institution is liable for a single
violation or a series of violations under this article, the maximum
penalty shall not exceed fifty thousand dollars. In taking action
against a covered institution or lending institution, consideration
shall be given to the nature and severity of violations of this article.

2. If after providing notice and an opportunity for a hearing the
department determines that a covered institution employee has violated
any terms or provisions of this article, then the covered institution
employee may be liable for a civil penalty. Regardless of the
department's determination that a covered institution employee is liable
for a single violation or a series of violations under this article, the
maximum penalty shall not exceed seven thousand five hundred dollars. In
taking action against a covered institution employee, consideration
shall be given to the nature and severity of violations of this article.

3. If after providing notice and an opportunity for a hearing the
department determines that a lending institution has violated a term or
provision of this article, such lending institution shall not be placed
or remain on any covered institution's preferred lender list unless
notice of such violation is provided to all potential borrowers of the
covered institution.

4. Nothing in this section shall prohibit the department from reaching
a settlement agreement with a covered institution, covered institution
employee or lending institution in order to effectuate the purposes of
this section. Provided, however, if such settlement agreement is reached
with a covered institution or lending institution, the department shall
provide notice of such action to all potential borrowers in a form and
manner prescribed by the department.

5. The department shall deposit the funds generated from this section
into the student lending education account, created by section
ninety-seven-hhhh of the state finance law. Such funds shall be given to
covered institutions upon application to the department for the purposes
of:

a. Educating borrowers and potential borrowers on the educational loan
process, including, but not limited to, available educational loan
options, understanding rates and terms of student loans, managing costs
and credit responsibilities, student loan repayment and loan
consolidation; and

b. Reimbursing borrowers from inflated educational loan prices caused
by revenue sharing agreements between such covered institution and a
lending institution.