BOSTON (SHNS) – Gov. Charlie Baker late last week returned to the Legislature a unanimously approved bill with an amendment, telling lawmakers that he supports eliminating student loan debt defaults as a disqualifier for many professional and occupational licenses but isn’t comfortable extending that to financial services providers.

The bill (H 4339) would remove a statutory requirement that certain boards of registration (those that fall under Chapter 112) deny a professional or occupational license if the applicant has defaulted on a student loan. Baker said he supports that elimination but noted that “neither the Division of Occupational Licensure nor the Department of Public Health, which oversee the boards covered by Chapter 112, has any record of ever denying a license, registration, certificate, or authority to any individual based on educational loan default.”

Where the governor grew uncomfortable was a provision in the bill that extends that prohibition on denying, revoking, or refusing to renew various types of professional licensure due to student loan default to all other state agencies and registration boards.

The Division of Banks, which regulates financial services providers, was Baker’s chief concern due to its legal requirement to “evaluate the financial responsibility of certain licensees,” he said. “The Division does so by reviewing credit reports that may include information on past loan defaults, including student loan defaults. Precluding the Division of Banks from reviewing credit reports as part of its evaluation of an individual’s financial responsibility for a financial services license could ultimately result in harm to consumers,” the governor wrote to lawmakers Thursday evening.

“Accordingly, I am proposing an amendment to the bill that would exempt the Division of Banks from a statutory prohibition on considering student loan defaults in order to ensure that the Division will retain the discretion it has always applied when assessing an applicant’s fitness to provide consumer financial services to prospective borrowers.”

The House and Senate traded amendments to the bill in July as they wrapped up serious lawmaking for the year, and the language was finalized when the bill reemerged in mid-November. It got to Baker’s desk Nov. 21 having cleared both branches without opposition. The House on Monday sent Baker’s amendment to the Committee On Bills In The Third Reading. The bill and Baker’s proposed amendment will return to the Legislature, which can still accept or reject his suggestion during informal sessions so long as no representatives or senators object.