Consumer bureau seeks input on bank products for students

Reuters News
Posted: Jan 31, 2013 12:47 PM

WASHINGTON (Reuters) - The consumer bureau said on Thursday it wants information on college and university-affiliated banking products as it seeks to better understand the types of financial services that are marketed to students.

The Consumer Financial Protection Bureau (CFPB) said it is interested in what information schools give financial firms as part of agreements to offer identification cards that double as debit cards. These cards are also used to access loans and scholarship funds, and school-sponsored bank accounts.

The bureau wants to know more about students' experiences with such services, how products are marketed and what fees are associated.

"The bureau wants to find out whether students using college-endorsed banking products are getting a good deal," Director Richard Cordray said in a statement.

Congress created the consumer bureau as part of the 2010 Dodd-Frank oversight law to help protect Americans from financial scams. The CFPB enforces a 2009 law that cracked down on the way firms market products on college campuses and made agreements between credit card companies and schools public.

But regulators do not know as much about other products that are sold to students, the bureau said on Thursday. The CFPB, which has taken an interest in students' financial situations, said it wants to gain a clearer picture of the market.

It released a report earlier this year with the U.S. Department of Education on the safety of the student loan market. After another regulator fined two firms for overcharging students for debit card accounts, the bureau released an advisory for college students on potential pitfalls of financial products.

The bureau also could potentially use the information it receives to inform other actions, such as industry guidance or new rules, if it finds widespread problems.

Students, families, colleges and financial firms have until March 18 to submit comments on those products.

(Reporting By Emily Stephenson; Editing by Steve Orlofsky)