CFPB scrutinizing card products on campus

January 31, 2013

CFPB scrutinizing card products on campus

The CFPB yesterday launched an inquiry about card-based financial products offered to college students on campus, including products offered by federally regulated financial institutions such as credit unions.

The inquiry will focus on the impact of financial products marketed to students through colleges and universities. The CFPB says it intends to use the information gathered to determine whether these arrangements are in the best interest of students.

"We have seen many colleges establish relationships with financial institutions to offer banking services to their students," said CFPB Director Richard Cordray. "The Bureau wants to find out whether students using college-endorsed banking products are getting a good deal."

The 2009 Credit CARD Act restricts how financial institutions market products on campus and makes agreements between credit card issuers and institutions of higher education subject to public disclosure. The inquiry launched Thursday focuses on card products not directly affected by these measures, including:

student identification cards that double as debit cards;
cards used to access scholarships and student loans;
school-affiliated bank accounts.

The CFPB is asking the public, students, families, the higher education community, and financial institutions to provide input on their experiences with these products. It poses several questions for comment, such as how the products are marketed to students, how schools set up marketing agreements with financial institutions and, among other things, students' experiences using campus financial products.

The CFPB's notice of inquiry will be published soon in the Federal Register. Comments are due March 18.

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