CFPB, Lawmakers Continue Campus Card Examination (Oct. 1, 2013)
The Consumer Financial Protection Bureau yesterday hosted a Banking on Campus Forum in Washington, D.C., as part of its ongoing investigation into campus cards. Some college students said they feel pressured into using specific financial products—which can include student ID cards that double as debit or prepaid cards and are used to access scholarships and student loans—because of arrangements colleges and universities have with certain financial institutions.
Students’ comments, some given by video, included complaints of high fees, difficulty accessing their funds and having to pay ATM fees if they choose to bank with a financial institution that doesn’t have an arrangement with the college. Earlier this year, the CFPB announced its inquiry and requested feedback from students, families, school representatives and financial institutions.
“We have heard from many school officials who are looking for guidance on how to make sure their students start off on the right financial footing,” CFPB Director Richard Cordray said during the forum that included students and officials from the Department of Education, the Department of the Treasury, the Federal Deposit Insurance Corporation and the Federal Reserve. “The consumer bureau is committed to working with everyone involved to ensure that students and young consumers have the opportunity to make financial choices that are sound and sustainable.”
In related news, several Democratic lawmakers last week sent letters to at least nine financial institutions asking them to explain the scope of any debit card programs they have with colleges or universities, including how much money the deals pay to the schools and how much in fees students are charged, among other information.
“At a time when college costs are increasing and college students are drowning in debt, the federal government must ensure the integrity of student financial aid programs and step in if financial aid dollars are being diverted through deceptive or predatory practices,” the letters said.