DOE Rebuffs Input from Legislators (Aug. 31, 2015)
U.S. lawmakers keep trying to influence how the U.S. Department of Education handles its proposed rule governing universities’ and colleges’ arrangements with financial service providers that deliver financial aid dollars. And, the DOE continues to say, “Thanks, but no thanks.”
A July 28 letter to DOE Secretary Arne Duncan, signed by Rep. Blaine Luetkemeyer (R-Mo.), along with more than 35 other lawmakers, urged the DOE to provide Congress with “specific information on how this rulemaking will benefit schools and their students, as well as a cost-benefit analysis that takes into consideration the potential unintended consequences,” such as higher costs of financial services for schools and students and limited consumer choice. Lawmakers also asked for information regarding coordination between the DOE and the CFPB because of the “potential for duplicative or conflicting standards for certain financial products” in the DOE’s proposal and the CFPB’s proposed rule on prepaid accounts.
In an Aug. 19 reply, the DOE said as noted in its NPRM published in May that the department already had consulted the federal banking regulators at the FDIC, the Office of the Comptroller of the Currency, the Bureau of the Fiscal Service at the Treasury Department and the CFPB for help in understanding federal banking regulations and framework. The letter was written by Jamienne Studley, DOE deputy under secretary.
The DOE received more than 200 comments in response to its NPRM, which many in the prepaid industry are fearful will force third-party servicers out of the market and will reduce student options for affordable financial services. The DOE said it’s diligently reviewing the comments to determine whether changes should be made before publishing a final regulation by Nov. 1 of this year to become effective July 1, 2016. “The department remains committed to promulgating a final rule that balances consumer protections with convenient student access to title IV … program funds,” according to the letter.