The growing partnerships between financial institutions and colleges that produce campus debit cards and school-affiliated bank accounts are being examined by the U.S. Consumer Financial Protection Bureau.
The bureau today published a Notice and Request for Information to seek public and professional input on campus financial products, including student identification cards that double as debit cards, cards used to access scholarships and student loans, and college-affiliated accounts.
In the past, relationships between financial institutions and colleges and universities have drawn scrutiny and led to legislative action.
“The Bureau wants to find out whether students using college-endorsed banking products are getting a good deal,” said CFPB Director Richard Cordray.
Congress addressed school-preferred lender arrangements and marketing of campus credit cards on college campuses in legislation enacted in 2008 and 2009.
The Credit CARD Act of 2009 (CARD Act) restricted financial institutions from using certain types of marketing practices on college campuses. The CARD Act also made agreements between credit card issuers and institutions of higher education subject to public disclosure. However, less is known about arrangements regarding other products marketed to students.
CFPB is asking the public, students, families, the higher education community, and financial institutions to provide input on their experiences with these products. The Bureau is seeking input on a variety of related issues including:
- information schools share with financial institutions when they establish these relationships;
- How campus financial products are marketed to students;
- What fees students are being charged to use these products;
- How schools set up marketing agreements with financial institutions; and
- Student experiences using campus financial products in their day to day lives.
The CFPB released a guide for college students on how to choose a new card or checking account. In the wake of a public settlement with a financial company alleged to have targeted college students, the CFPB also released a consumer advisory to warn students about potential pitfalls.
More than 9 million college students are at risk for even higher debt because of bank-affiliated, campus debit cards that come with high fees, weak consumer protections and few options, according to Campus Debit Card Trap, a report released last year by the U.S. Public Interest Research Group Education Fund.
Many of these students are already mired in mounting student loan debt.