Sallie Mae 2009 Annual Report Download - page 10

USA Funds, we receive certain scheduled fees for the services that we provide under such agreements. The
payment for these services includes a contractually agreed-upon percentage of the account maintenance fees
that the Guarantors receive from ED.
The Company’s guarantee services agreement with USA Funds has a five-year term that will be
automatically extended on October 1 of each year unless prior notice is given by either party.
Our primary non-profit competitors in Guarantor Servicing are state and non-profit guarantee agencies
that provide third-party outsourcing to other Guarantors.
(See APPENDIX A, “FEDERAL FAMILY EDUCATION LOAN PROGRAM — Guarantor Funding” for
details of the fees paid to Guarantors.)
Upromise
Upromise provides a number of programs that encourage consumers to save for college. Upromise has
established a consumer savings network which is designed to promote college savings by consumers who are
members of this program by allowing them to earn rewards from the purchase of goods and services from the
companies that participate in the program (“Participating Companies”). Participating Companies generally pay
Upromise transaction fees based on member purchase volume, either online or in stores depending on the
contractual arrangement with the Participating Company. Typically, a percentage of the purchase price of the
consumer members’ eligible purchases with Participating Companies is set aside in an account maintained by
Upromise on behalf of its members.
Upromise, through its wholly-owned subsidiaries, UII, a registered broker-dealer, and UIA, a registered
investment advisor, provides program management, transfer and servicing agent services, and administration
services for various 529 college-savings plans. UII and UIA manage approximately $23 billion in 529 college-
savings plans.
REGULATION
Like other participants in the FFELP, the Company is subject to the HEA and, from time to time, to
review of its student loan operations by ED and guarantee agencies. As a servicer of federal student loans, the
Company is subject to certain ED regulations regarding financial responsibility and administrative capability
that govern all third-party servicers of insured student loans. In connection with our Guarantor Servicing
operations, the Company must comply with, on behalf of its Guarantor Servicing customers, certain ED
regulations that govern Guarantor activities as well as agreements for reimbursement between the Secretary of
Education and the Company’s Guarantor Servicing customers. As a third-party service provider to financial
institutions, the Company is also subject to examination by the Federal Financial Institutions Examination
Council (“FFIEC”).
The Company’s originating or servicing of federal and private student loans also subjects it to federal and
state consumer protection, privacy and related laws and regulations. Some of the more significant federal laws
and regulations that are applicable to our student loan business include:
• the Truth-In-Lending Act;
• the Fair Credit Reporting Act;
• the Equal Credit Opportunity Act;
• the Gramm Leach-Bliley Act; and
• the U.S. Bankruptcy Code.
APG’s debt collection and receivables management activities are subject to federal and state consumer
protection, privacy and related laws and regulations. Some of the more significant federal laws and regulations
that are applicable to our APG business segment include:
• the Fair Debt Collection Practices Act;
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