WASHINGTON—The CFPB is looking to help colleges better understand and evaluate the costs and benefits of the products offered to their students from financial institutions with which the university partners.
The CFBP announced it is seeking input on a “Safe Student Account Scorecard” it expects will prevent colleges from “partnering with financial institutions that offer checking and prepaid accounts with tricks and traps.”
The scorecard would help colleges better understand fees, features, and sales tactics before agreeing to a sponsorship, the CFPB stated in a release. “The scorecard would help create a level playing field for all financial institutions that offer affordable products, regardless of their ability to pay bonuses to schools.”
“An important issue for young people is how best to manage their money while they are still in school,” said CFPB Director Richard Cordray. “Because of the influence schools may have on the financial products students choose, we are working to arm them with the information they need to negotiate safe and affordable products for students.”
The scorecard will ask financial institutions to provide schools with:
- A clear description of product fees and features: The draft scorecard specifically seeks information from financial institution partners on whether there is a fee for certain features, such as access to mobile banking and electronic statements, and the amount of any fee.
- Full disclosure about the financial institutions’ marketing practices: The draft scorecard requests information on how financial institutions offering school-sponsored accounts would ensure that students receive objective and neutral information on their choices.
- How much the financial institution earns from the accounts: The draft scorecard provides a way for colleges to seek specific information about the cost of Safe Student Checking and Safe Student Prepaid Accounts.
- Annual summary of fees: The draft scorecard would have financial institutions provide the school with an annual summary describing the fees charged to account holders at the given college.
The Bureau will be accepting input on the draft scorecard until March 16, 2015.