On May 19, the Massachusetts Division of Banks entered into a consent order with Educational Computer Systems, Inc. (ECSI) to resolve allegations that ECSI was engaging in the business of a third party loan servicer or student loan servicer without the appropriate license. Under the terms of the consent order, ECSI must: 1) pay an administrative penalty in the amount of $500,000; 2) cease and desist from engaging in activity that requires a license prior to obtaining the appropriate license from the Division; and 3) implement internal policies and procedures to ensure its compliance with the Division’s licensing and registration rules.
In 2016, ECSI had submitted an application to the Division for a third party loan servicer registration, but that application was later deemed “withdrawn-application abandoned.” In 2021, ECSI submitted an application for a Massachusetts student loan servicer license, which remains pending, and its 2022 application for a Massachusetts automatic federal student loan servicer license was approved. However, in its review of the applications the Division discovered that ECSI had engaged in the business of a third party loan servicer or student loan servicer in Massachusetts without the appropriate license. In the consent order, ECSI did not admit to the allegations.