Bill > HB224

This bill establishes the Student Loan Bill of Rights Act in New Mexico, which creates comprehensive protections for student loan borrowers and cosigners. The bill requires student loan servicers to obtain a license from the state's Financial Institutions Division, mandates fair and transparent lending practices, and provides robust consumer protections. Key provisions include requiring servicers to respond promptly to borrower inquiries, apply payments in the borrower's best financial interest, and offer alternative repayment options equally to all borrowers. The bill also establishes protections for cosigners, including the right to be notified about loan status, access to loan information, and a clear process for cosigner release. Additionally, the bill creates a student loan ombudsman position to help borrowers resolve complaints, prohibits certain predatory lending practices like unexpected loan acceleration, and allows borrowers to sue for damages if servicers violate the act. The bill defines total and permanent disability discharge, requires lenders to provide clear information about loan terms, and creates a Student Loan Bill of Rights Fund to support enforcement. Violations of the act are considered unfair trade practices, with potential penalties including monetary fines and injunctions. The provisions will take effect on January 1, 2026, and apply to private education loans issued on or after that date.

Justice

https://www.nmlegis.gov/Legislation/Legislation?chamber=H&legtype=B&legno=224&year=25