Last week, the CFPB muscled its way on campus, announcing that it will be looking at the impact of financial products marketed to students through their colleges and universities. And by financial products, the CFPB made it clear that it was primarily referring to bundled school identification and debit cards, debit cards that are used to access scholarships and student loans, and school affiliated bank accounts, regardless of how they might be accessed.
Although the CFPB seeks to determine whether students are getting a good deal, it seems to believe that the answer is no. In making the announcement, the CFPB made it a point to note the prohibitions that the Higher Education Opportunity Act established on co-branding and endorsed lender arrangements with private education loans and the limitations that the Card Act established on the marketing practices used by credit card issuers on college campuses.
The CFPB also emphasized its own educational initiatives, citing its guide on how to choose the best checking account and its consumer advisory regarding scholarships, grants, and loan proceeds loaded onto school-endorsed debit cards which reminds students that they cannot be required to use a specific bank or card, that they should consider establishing an account before starting school, and that they should sign up for direct deposit.
With that background, the CFPB then asked for input on a variety of issues with regard to these products, including the information shared between schools and financial institution providers, the way these products are marketed, the fee structures for these products, how these marketing arrangements are established, and student experiences with these products. Comments are due by March 18 and presumably a report on the products will follow.