The Massachusetts Division of Banks has assessed a $500,000 fine and ordered a company to stop engaging in any activity that requires licensing or registration until the company has obtained the proper licensing or registration after finding that it was operating without the proper license in the state.
A copy of the consent order can be accessed by clicking here.
Back in 2016, Educational Computer Systems submitted an application for third-party loan servicer registration with the Division. Two months later, the application was deemed to have been “withdrawn – application abandoned.” The company filed another application in June 2021 for a Massachusetts Student Loan Servicer License and again in September 2022 for a Massachusetts Automatic Federal Student Loan Servicer License. The 2022 application was approved and the 2021 application remains pending. During its review of the applications, the division became aware that the company was engaged in the business of third-party loan servicing and student loan servicing without having the proper registration and/or license to do so.
The company has agreed to pay an administrative penalty of $500,000 and immediately cease and desist from engaging in any business activity that requires licensing or registration from the division. The company must also establish, implement, and maintain adequate internal policies and procedures to ensure it refrains from engaging in any business activity the requires licensing or registration.
