STATE OF ILLINOIS DEPARTMENT OF FINANCIAL AND

STATE OF ILLINOIS

DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION

DIVISION OF BANKING

IN THE MATTER OF: )

) Order No. 2021-SLS-01

GRANITE STATE MANAGEMENT & RESOURCES )

License No. SLS.0000027; NMLS ID 1585615 )

4 Barrell Court )

Concord, NH 03301 )

)

NEW HAMPSHIRE HIGHER EDUCATION )

LOAN CORPORATION )

NMLS ID 1527348 )

4 Barrell Court )

Concord, NH 03301 )

CONSENT ORDER

The ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION,

DIVISION OF BANKING (“Department”) and GRANITE STATE MANAGEMENT &

RESOURCES (“Granite State”) and NEW HAMPSHIRE HIGHER EDUCATION LOAN

CORPORATION (“NHHELCO” and, collectively with Granite State, “Respondents”) hereby enter into

this Consent Order pursuant to the Student Loan Servicing Rights Act, 110 ILCS 992 (the “Act”) and the

rules promulgated under the Student Loan Servicing Rights Act (“Rules”) [38 Ill. Adm. Code 1010] and

stipulate and agree as follows:

STIPULATIONS & AGREEMENT

The Department and Respondents stipulate that the Department, pursuant to its authority under the

Act and Rules, conducted an investigation of Granite State’s compliance with the Act, specifically

including Granite State’s (1) failure to promptly notify the Department of the change in ownership caused

by Granite State’s merger into NHHELCO in April 2020 and (2) failure to accomplish renewal of its

license on or before December 31, 2020. The Department’s findings are as follows.

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STATUTORY PROVISIONS

1. Section 20-5(8) of the Act grants the Department the authority to issue orders against any person,

if the Secretary has reasonable cause to believe that any person has violated, is violating, or is

about to violate any law, rule, or written agreement with the Secretary, or for the purpose of

administering the provisions of this Act and any rule adopted in accordance with the Act.

2. Section 20-30(i)(8) of the Act states, in part, that failure to comply with a rule made or issued

under the provisions of this Act, shall constitute grounds for disciplinary action.

3. Section 20-30(i)(9) of the Act states, in part, that engaging in activities regulated by this Act

without a current, active license, unless specifically exempted by this Act, shall constitute

grounds for disciplinary action.

4. Section 20-30(h)(5) of the Act provides for the imposition of a fine not to exceed $25,000 for

each count of separate offense.

FACTUAL FINDINGS

Granite State’s Failure to Advise the Department of Its Merger Into NHHELCO

5. Granite State is a student loan servicer that has been licensed by the Department under the Act

since May 7, 2019.

6. On or around April 1, 2020, the operations of Granite State were merged into New Hampshire

Higher Education Loan Corporation (“NHHELCO”). Granite State ceased to exist as a separate

legal entity on or around the same date.

7. On or around November 23, 2020, staff of the Department emailed Granite State’s designated

contact to advise that the Department had recently enacted administrative rules affecting all student

loan servicers in Illinois, including Granite State. Attached to this email was an electronic copy of

the Rules, including 38 Ill. Adm. Code 1010.130(a), which requires a licensee to file an amendment

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to its license application within 10 business days of any change that results in the information in

the application becoming inaccurate or incomplete.

8. Section 15-20 of the Act specifies that an applicant must provide information including “the name

and complete business and residential address or addresses of the license applicant,” and for “a

partnership, association, corporation, or other form of business organization, … the names and

complete business and residential addresses of each member, director, and principal officer

thereof.” 110 ILCS 992/15-20(b).

9. At no time prior to January 11, 2021, did Granite State advise the Department that the entity

holding the student loan servicing license in Illinois had merged into NHHELCO and ceased its

existence over nine months earlier. Nor during this time did NHHELCO submit an application for

a license under the Act.

10. Granite State and NHHELCO neither admit nor deny the allegations of the Department.

Granite State’s Failure to Accomplish Renewal of Its License Under the Act

11. On or around December 16, 2020 and December 30, 2020, staff of the Department emailed Granite

State’s designated contact to remind the contact that Granite State’s student loan servicing license

needed to be renewed by the close of business on December 31, 2020. No response to either email

was received by Department staff.

12. Granite State’s license under the Act expired at the end of December 31, 2020 without Granite

State having submitted a properly completed renewal application form and fees or having received

a written extension from the Secretary. As a result, Granite State’s license became inactive as of

January 1, 2021.

13. As of January 1, 2021, NHHELCO had not applied for a license to service student loans under the

Act.

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14. Granite State and NHHELCO continued to service loans for borrowers who reside in Illinois,

notwithstanding that a licensee may not conduct any activity regulated by the Act once a license

becomes inactive or without a license.

15. Granite State acknowledged through counsel on January 11, 2021, after being contacted by staff

of the Department, that NHHELCO, as Granite State’s successor in interest, continued to service

loans for Illinois borrowers, notwithstanding that Granite State’s license was inactive and

NHHELCO was not licensed under the Act.

16. Granite State and NHHELCO neither admit nor deny the allegations of the Department.

Granite State’s Late-Accomplished Renewal and Reactivation of Its License

17. On January 15, 2021, Granite State submitted a renewal application along with renewal and

reactivation fees. Following submission of additional outstanding information, the renewal of

Granite State’s license was accomplished on January 22, 2021.

18. Respondents have advised that NHHELCO applied for a license under the Act on February 22,

2021 that will be processed expeditiously by the Department and, upon approval, the license held

by Granite State may be surrendered, as set forth more fully below.

TERMS AND CONDITIONS

WHEREFORE, the Department and Respondents agree as follows:

I. Granite State’s Illinois Student Loan Servicing License (No. SL.0000027) is placed upon

Probation pursuant to Section 20-30(h)(3) of the Act for a period of 18 months. During this

probationary period, the Department may conduct periodic examinations and Granite State

shall enhance its compliance policies and procedures and training as described in

paragraphs III-V, below, and self-report its progress to the Department. If after a period of

12 months from the Effective Date of this Consent Order, the Department determines, in

its sole discretion, that Granite State is operating in a safe, sound, and lawful manner, the

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Department may terminate the probationary period. If NHHELCO is issued a license under

the Act prior to the expiration of the 12 or 18 months, as the case may be, Granite State

may surrender its license.

II. After NHHELCO submits an application, and upon satisfaction of any issues necessary for

the Secretary to make the findings specified in Section 15-15(a) of the Act for NHHELCO

to receive a license under the Act, which time frame the Department intends to be

expeditious, NHHELCO’s Illinois Student Loan Servicing License will be placed upon

Probation pursuant to Section 20-30(h)(3) of the Act for a period of 18 months from the

Effective Date of this Consent Order. During this probationary period, the Department may

conduct periodic examinations and NHHELCO shall enhance its compliance policies and

procedures and training as described in paragraphs III-V, below, and self-report its progress

to the Department. If after a period of 12 months, the Department determines that

NHHELCO is operating in a safe, sound, and lawful manner, the Department may, in its

sole discretion, terminate the probationary period. The termination of such probationary

period shall not be unreasonably withheld.

III. Respondents must provide, at least annually, and within 90 days for new hires, a training

to its employees, agents, and representatives who will conduct student loan servicing

operations or are responsible for dealing with state and federal regulators. This training

must include: compliance with the Act and its implementing Rules; ethics in the student

loan servicing industry; and understanding of student loans. The first training must occur

within 90 days of the Effective Date of this Consent Order.

IV. Respondents shall notify the Department in writing of all training courses they intend to offer

pursuant to Paragraph III at least thirty (30) days prior to the date of the training. Respondents

shall provide a copy of all training materials they intend to use at any trainings conducted

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pursuant to Paragraph III at least fourteen (14) days before the scheduled training. The

Department, in its sole discretion, may attend or participate in the trainings.

V. Respondents shall enhance their policies and procedures regarding compliance under the

Act, including assuring that staff in the companies’ license units (a) be adequately informed

of the timing and substance of state license renewal requirements, (b) timely and accurately

apply for a license and renewal licenses on NMLS, and (c) timely and appropriately

respond to requests and inquiries from the Department relating to licensure. The first

verification of enhanced policies and procedures with the Department must occur within

30 days of the Effective Date of this Consent Order.

VI. Respondents agree to pay the Department $35,000 by check in settlement pursuant to

Section 20-30(h)(5) of the Act within 30 days of the Effective Date of this Consent

Order. The check shall be payable to the “Illinois Department of Financial and Professional

Regulation” and mailed by UPS or FedEx with tracking to the below address:

Illinois Department of Financial and Professional Regulation

Attn: Cash Unit, Kara Oldham/Christina Smith

320 W. Washington St., Rm. 338

Springfield, Illinois 62786

VII. Respondents agree to comply with all of the corrective action measures prescribed by the

Department in this Consent Order. In the event any Respondent fails to comply with these

corrective action measures, the Department reserves the right to assess and enforce any of

its disciplinary authority under the Act and Rules.

VIII. By executing this Consent Order, Respondents agree to not file any petition for

administrative hearing or judicial review of, or in connection with, this Consent Order,

except in the event the Department alleges non-compliance with Paragraph VII.

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Respondents acknowledge that they were represented by legal counsel in this matter, and

that they willingly enter into this Consent Order after full review, evaluation, and

consideration with full knowledge of their rights under the Act, Rules, and Illinois

Administrative Procedure Act [5 ILCS 100].

IX. The Department enters into this Consent Order for the purpose of imposing measures that

are fair and equitable under the circumstances and that are consistent with the best interests

of the people of the State of Illinois.

X. This Consent Order shall become effective upon all of those hereinafter designated signing

and dating the Consent Order, and on the date that the last of those designated for the

Department sign and date the Consent Order (the “Effective Date”).

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The foregoing Consent Order is approved in full.

ILLINOIS DEPARTMENT OF FINANCIAL AND PROFESSIONAL REGULATION

DIVISION OF BANKING

______________________________________________ Date:_________________

CHASSE REHWINKEL

ACTING DIRECTOR

_____ Date: _________________

John Flanders, VP & Chief Operating Officer

New Hampshire Higher Education Loan Corporation

Successor in interest to Granite State Management & Resources by merger

______ Date: _________________

John Flanders, VP & Chief Operating Officer

New Hampshire Higher Education Loan Corporation