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ARTICLE · 15 OCTOBER 2021

Student Lending: California's New Requirements For Collection Activity

Manatt, Phelps & Phillips, LLP
Manatt, Phelps & Phillips, LLP
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California is continuing to lead the way on student lending regulation. Its latest enactment further complicates the efforts of financial entities to collect on defaulted private student loans. We discuss the statute below.

United StatesFinance and Banking
Bryan Schneider
Bryan Schneider
Jonathan S. Joshua
Jonathan S. Joshua
John A. Kimble
John A. Kimble

California is continuing to lead the way on student lending regulation. Its latest enactment further complicates the efforts of financial entities to collect on defaulted private student loans. We discuss the statute below.

What Happened

On October 6, Governor Newsom signed the Private Student Loan Collections Reform Act (the Act) into law. The Act continues the trend of California leading the way in imposing new and burdensome requirements on the financial services industry.

The Act's requirements apply to both private education lenders and private education loan collectors. The definition of private education lender includes both a person or an entity engaged in the business of securing, making or extending private education loans as well as any holder of a private education loan. The Act exempts depository institutions and those that, together with affiliates, will be a plaintiff in 35 or fewer private student loan collection actions in the current calendar

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