Education Industry Reporter

CFPB Launches Inquiry on Campus Financial Products

Posted in CFPB, Financial Issues, Higher Education News, Higher Education Policy

CONTRIBUTED BY
Dennis Cariello

On January 31, 2013, the Consumer Financial Protection Bureau (CFPB) published a Notice in the Federal Register informing the public that it is “launching an inquiry into the impact of financial products marketed to students through colleges and universities.”  To that end, it is seeking information related to arrangements between institutions of higher education and financial institutions.  The CFPB seeks information related to how arrangements can be structured “to promote positive financial decision-making and building of money management skills among young consumers,” as well as information to help “develop a clearer picture of the financial products and services that are being offered to college students, as well as consumers’ experiences using those products and services.”

 

Notably, the CFPB intends to use the information gathered to “determine whether these arrangements are in the best interest of students.”

 

The Notice seeks information on products marketed through “campus affinity relationships” — financial products that carry an explicit or implicit endorsement or mark of an institution of higher education.  “Examples of these products include those that display the name or mark of the institution, are bundled with student identification cards, and cards on which students can receive disbursements of financial aid or other funds from the institution of higher education.”  The Notice also seeks information on other financial products marketed to students, such as banking relationships.   The CFPB has released a lengthy list of questions about which it seeks information, including:
  •     What 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 public may submit comments until March 18, 2013.