OAR 441-895-0040: Corporate Surety Bond or Irrevocable Letter of Credit for Student Loan Servicers

(1) Every applicant for a license as a student loan servicer must file a corporate surety bond or irrevocable letter of credit with the director as specified in this rule in a form and on terms approved by the director. The corporate surety bond shall be renewed or replaced each calendar year. The corporate surety bond or irrevocable letter of credit shall be delivered to the director by filing in the NMLS by December 1 of each calendar year but may be made effective as of December 31 of each calendar year. In no case shall any applicant or student loan servicer subject to this rule reduce the amount of a corporate surety bond or irrevocable letter of credit before October 1 of each calendar year. (2) The corporate surety bond or irrevocable letter of credit must remain in effect for at least five years after the person ceases to be licensed as a student loan servicer. A consumer must file a claim against the corporate surety bond or irrevocable letter of credit before the corporate surety bond or irrevocable letter of credit expires as described in this section. (3) At least five years after a person ceases to be licensed as a student loan servicer, the person or the writer of the corporate surety bond or irrevocable letter of credit may apply to the director for release of the corporate surety bond or irrevocable letter of credit. Unless the director determines that claims are pending against the person for violation of Oregon Laws 2021, chapter 651 , the director will release the corporate surety bond or irrevocable letter of credit. (4) The corporate surety bond or irrevocable letter of credit shall be in the amount of $30,000 made payable to the State of Oregon.