Dive Brief:
- Seventeen colleges received warning letters from the Consumer Financial Protection Bureau for failing to disclose, when asked, agreements with credit card companies who market to students.
- Time reports the 2009 Credit Card Accountability, Responsibility, and Disclosure Act changed the rules for schools, requiring them to tell the CFPB terms of their agreements with credit card companies and publicly disclose them, yet 17 out of 25 colleges recently contacted did not, though the CFPB will not say which colleges.
- In the CFPB's annual report to Congress about such credit card agreements, the bureau says there has continued to be a significant net decrease in agreements in recent years, from 448 at the beginning of 2013 to 336 at the end of that year and 272 at the end of 2014.
Dive Insight:
Agreements between colleges and credit card companies have come under fire in recent years because of the fees students are assessed. In many cases, students could get better deals if they open accounts at other banking institutions or if they do so outside of the university.
New rules are set to take effect in the fall of 2016 to regulate debit cards distributed with financial aid payments. Credit card companies will not be allowed to assess overdraft fees on these accounts and colleges will not be allowed to pressure students into accepting their tuition payments on such debit cards. The Education Department announced the new rules in October.