According to a new blog post about “secret banking contracts” by Rohit Chopra, the CFPB’s Student Loan Ombudsman, the CFPB is sending letters to colleges and universities “to make sure they know that their bank partner has not yet committed to transparency when it comes to student financial products” because it has not yet posted its marketing agreement with the school on its website.
Last December, in a “call for transparency,” the CFPB urged financial institutions to publicly disclose their marketing agreements for campus financial products other than credit cards, such as deposit accounts, prepaid cards and financial aid disbursement accounts. That call was accompanied by the threat that a financial institution’s failure to disclose its campus marketing agreements could make it a target for examination.
In its letters, the CFPB tells schools with such marketing agreements that “[b]ased on a scan of your financial institution partner’s website, it appears that [name of financial institution] has not disclosed this agreement. We wanted to alert you that this failure to be transparent may pose potential consumer protection risks.”
In his new blog post, Mr. Chopra states that at least 13 of the 14 Big Ten schools have entered into arrangements with banks to market financial products to students. He states that of those 13, the CFPB could “easily find only four contracts on the partner websites, but three of those four contracts did not contain important information, such as how much they pay schools to gain access to students in order to market and sell them financial products and services.”