261F.3 - PROHIBITIONS -- REPORT.
261F.3 PROHIBITIONS -- REPORT.{
1. Gift ban. No officer, employee, or agent of a covered
institution who is employed in the financial aid office of the
institution, or who otherwise has direct responsibilities with
respect to educational loans, shall solicit or accept any gift from a
lender, guarantor, or servicer of educational loans. The attorney
general shall investigate any reported violation of this subsection
and shall annually submit a report to the general assembly by January
15 identifying all substantiated violations of this subsection,
including the lenders and covered institutions involved in each such
violation, for the preceding year.
2. Gifts to family members or others. For purposes of this
section, a gift to a family member of an officer, employee, or agent
of a covered institution, or a gift to any other individual based on
that individual's relationship with the officer, employee, or agent,
shall be considered a gift to the officer, employee, or agent if
either of the following applies:
a. The gift is given with the knowledge and acquiescence of
the officer, employee, or agent.
b. The officer, employee, or agent has reason to believe the
gift was given because of the official position of the officer,
employee, or agent.
3. Contracting arrangements. An officer, employee, or agent
who is employed in the financial aid office of a covered institution,
or who otherwise has direct responsibilities with respect to
educational loans, shall not accept from any lender or affiliate of
any lender any fee, payment, or other financial benefit including but
not limited to the opportunity to purchase stock on other than free
market terms, as compensation for any type of consulting arrangement
or other contract to provide services to a lender or on behalf of a
lender.
4. Revenue sharing arrangements. A covered institution shall
not enter into any revenue sharing arrangement with any lender.
5. Prohibition on offers of funds for private loans. A
covered institution shall not request or accept from any lender any
offer of funds, including any opportunity pool, to be used for
private educational loans to borrowers in exchange for the covered
institution providing concessions or promises to the lender with
respect to such institution providing the lender with a specified
number of loans, a specified loan volume, or a preferred lender
arrangement for any loan made, insured, or guaranteed under Title IV
of the federal Higher Education Act of 1965, as amended, and a lender
shall not make any such offer. For purposes of this subsection,
"opportunity pool" means an educational loan made by a private
lender to a borrower that is in any manner guaranteed by a covered
institution, or that involves a payment, directly or indirectly, by
such an institution of points, premiums, payments, additional
interest, or other financial support to the lender for the purpose of
that lender extending credit to the borrower.
6. Participation on advisory councils. An officer, employee,
or agent who is employed in the financial aid office of a covered
institution, or who otherwise has direct responsibilities with
respect to educational loans, shall not serve on or otherwise
participate with advisory councils of lenders or affiliates of
lenders. Nothing in this subsection shall prohibit lenders from
seeking advice from covered institutions or groups of covered
institutions, including through telephonic or electronic means, or a
meeting, in order to improve products and services for borrowers,
provided there are no gifts or compensation including but not limited
to transportation, lodging, or related expenses, provided by lenders
in connection with seeking such advice from the institutions.
Nothing in this subsection shall prohibit an officer, employee, or
agent of a covered institution from serving on the board of directors
of a lender if required by law.
7. Exceptions.
a. Nothing in this section shall be construed as prohibiting
any of the following:
(1) An officer, employee, or agent of a covered institution who
is not employed in the institution's financial aid office, or who
does not otherwise have direct responsibilities with respect to
educational loans, from paid or unpaid service on a board of
directors of a lender, guarantor, or servicer of educational loans.
(2) An officer, employee, or agent of a covered institution who
is not employed in the financial aid office but who has direct
responsibility with respect to educational loans as a result of a
position held at the covered institution, from paid or unpaid service
on a board of directors of a lender, guarantor, or servicer of
educational loans, provided that the covered institution has a
written conflict of interest policy that clearly sets forth that such
an officer, employee, or agent must be recused from participating in
any decision of the board with respect to any transaction regarding
educational loans.
(3) An officer, employee, or agent of a lender, guarantor, or
servicer of educational loans from serving on a board of directors or
serving as a trustee of a covered institution, provided that the
covered institution has a written conflict of interest policy that
clearly sets forth the procedures to be followed in instances where
such a board member's or trustee's personal or business interests
with respect to educational loans may be advanced by an action of the
board of directors or trustees, including a provision that such a
board member or trustee may not participate in any decision to
approve any transaction where such conflicting interests may be
advanced.
b. Nothing in this chapter shall be construed to prohibit a
covered institution from lowering educational loan costs for
borrowers, including payments made by the covered institution to
lending institutions on behalf of borrowers. Section History: Recent Form
2008 Acts, ch 1132, §5, 15