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CFPB Studies Arrangements Between Banks and Universities

Stephanie Gold

Esther Haley Walker

28 January 2014
According to a report released by the Consumer Financial Protection Bureau (“CFPB”) on December 17, the number of credit card issuers that had contractual arrangements with higher education institutions and affiliated organizations (such as alumni associations, fraternities, and sororities) increased in 2012.  However, the CFPB’s data shows that—in comparison to 2009—credit card issuers had fewer:
CFPB Studies Arrangements Between Banks and Universities

  • agreements with higher education institutions and affiliated organizations,
  • open accounts, and
  • new accounts. 

The CFPB submitted its report to Congress and made it available to the public in accordance with its responsibilities under the Credit Card Accountability, Responsibility and Disclosure Act (also called the “CARD Act”).  In its report -- the fourth under the CARD Act -- the CFPB published a complete list of all institutions and affiliated organizations that had agreements with credit card issuers in 2012, along with a chart detailing the name of the card issuer, the total number of accounts, the total number of new accounts opened in 2012, and the total amount of payments made by the issuer to the institution or affiliated organization.  In addition, the CFPB posted on its website the complete text of all agreements that it had received from credit card issuers pursuant to CARD Act requirements. 

Although agreements between educational institutions and credit card issuers may be in decline, the CFPB is investigating a trend in financial institutions marketing student checking and debit/prepaid cards.  Earlier this year, pursuant to its authority under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, CFPB published a notice in the Federal Register that requested information about checking accounts, debit cards, and other financial products marketed to students enrolled in higher education institutions.  On September 30, 2013 CFPB held a forum on the topic called “Banking on Campus” to discuss its initial review of the information collected in response to the Federal Register notice.  Although the CFPB has not released a definitive report on the topic, the CFPB representatives offered a preliminary analysis at the forum, stating that “[a]rrangements between financial institutions and schools to offer student banking [are] not well-understood” by the CFPB yet.

 

Stephanie Gold

Esther Haley Walker

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