Nevada Has Adopted New Student Loan Servicing Regulations Covering Both Servicer Conduct And Licensing

Nevada has indeed adopted a new, comprehensive student loan servicing framework that covers both licensing and servicing conduct, primarily through AB 332 (2023) codified in NRS Chapter 670B, with implementing regulations adopted by the Financial Institutions Division (FID).

Statutory framework (AB 332 / NRS 670B)

AB 332, signed June 14, 2023, created a standalone student loan servicer regime now codified as NRS Chapter 670B. The law took effect January 1, 2024, and applies broadly to “student loan servicers,” defined as any person responsible for servicing any student education loan to a Nevada borrower, wherever located. It also works alongside provisions regulating private education loans and lenders, so student loan activity is now addressed on both the servicing and lending side.

The statute includes explicit exemptions for certain entities, such as banks, savings and loan associations, credit unions, the Nevada System of Higher Education, the Western Interstate Commission for Higher Education, and their wholly owned subsidiaries. Federal contract servicers under a U.S. Department of Education contract are treated somewhat differently, but only to the extent and under conditions the Commissioner recognizes.

Licensing of student loan servicers

NRS 670B requires that, unless an exemption applies, a person must obtain a license from the Commissioner of Financial Institutions before acting as a student loan servicer with respect to Nevada borrowers. Licensing is processed through the Nevada Financial Institutions Division and, operationally, is integrated with the Nationwide Multistate Licensing System and Registry (NMLS).

Key elements of the license application under AB 332 and its implementation include:

• Submission of a financial statement prepared by a public accountant.

• Payment of a nonrefundable license fee (e.g., $1,000) and investigation fee (e.g., $800).

• Posting of a surety bond in an amount determined by regulation, filed with the Commissioner and maintained thereafter.

• Provision of any additional information requested by the Commissioner for suitability and qualification review.

The implementing regulations in the Approved Regulations 670B additionally require a licensee to hold any other needed local licenses or permits and to maintain a qualifying “place of business” that meets defined standards, including oversight of servicing operations and maintenance of books and records. Licenses may be suspended, revoked, or not renewed for specified forms of noncompliance or misconduct.

Servicer conduct and borrower protections

Beyond licensing, NRS 670B establishes substantive conduct standards and duties for student loan servicers. The statute’s “Regulation of Practices” provisions (e.g., NRS 670B.380–670B.400) address:

• Duties to respond to borrower inquiries and handle qualified written requests.

• Rules for applying overpayments and partial payments.

• Required actions and notice obligations upon transfer of servicing, including continuity of benefits.

• Adoption of policies and procedures to ensure accurate payment processing and borrower assistance, including evaluation for income‑driven repayment programs where applicable.

• Recordkeeping and availability of records concerning student education loans.

• Prohibited acts, which track typical unfair, deceptive, or abusive practices in student loan servicing.

Commentary on Nevada’s new law also highlights borrower‑facing features such as specific cosigner‑related disclosures and conduct requirements, and clarified discharge treatment for death or “total and permanent” disability in the private education loan context, although those are more squarely focused on lenders than pure servicers.

Implementing regulations and effective dates

The Nevada FID has adopted detailed implementing regulations (Approved Regulations 670B) that fill in the operational details of licensure and ongoing compliance. These regulations establish procedures for license investigations and examinations, set assessments and fees, require annual information reporting by servicers, and identify conduct that can lead to suspension, revocation, or non‑renewal of a license.

The statute itself became effective January 1, 2024, and the administrative code provisions (e.g., Nev. Admin. Code § 670B.Sec. 5 on surety bonds) provide the current framework for bond amounts and other conditions. The Nevada FID’s public guidance confirms that, beginning December 1, 2023, initial and renewal applications and fees for student loan servicers must be submitted to the Division via NMLS.