ARLINGTON, Va.—What are the specific requirements Regulation Z imposes related to solicitations and advertisements for student loans?
To provide an answer, Loran Jackson, NAFCU's regulatory compliance counsel, used the example of a credit union representative passing out university-branded flyers to advertise loans to students of a local university to determine if these actions are permissible under Regulation Z.
Jackson clarified the example implies the covered education institution endorses the credit union's loans, which is generally prohibited. However, she identified two scenarios in which the representative may continue to pass out the branded flyers:
- The school has not endorsed the credit union's loans, and the flyers contain a "clear and conspicuous" disclosure that the referenced covered educational institution does not endorse the credit union's loans and is not affiliated with the credit union
- The school and the credit union have an endorsed lender arrangement where the school endorses the credit union's loans, and the flyers contain a clear and conspicuous disclosure that the credit union's loans are not offered or made by the covered educational institution, but are made by the credit union
Jackson noted that in addition to limits on co-branding, there are other requirements that apply to solicitations and applications for private education loans.
NAFCU is offering additional guidance here.