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CU comment on proposed campus banking rules

Consumers Union, the advocacy division of Consumer Reports,1 appreciates the opportunity to comment on the Department’s proposed rule to set new minimum standards for campus banking arrangements pursuant to its “cash management” rules.

We strongly support the Department’s proposal, and believe it will rein in some of the most problematic features of these school-bank partnerships. We are pleased that the proposed rule:

• Sets minimum requirements for accounts opened during the financial aid disbursement selection process, as well as those directly marketed to students;
• Requires a neutral menu of options for students choosing how to receive their financial aid disbursement, with direct deposit to an existing account displayed prominently as the first option;
• Requires affirmative consent from a student or parent to open a campus account before mailing an access device associated with the account, or linking an student’s ID card to the account;
• Requires meaningful access to free ATMs for all campus accounts;
• Bans point-of-sale and overdraft fees, and any other fees for the first 30 days after account opening, on at least some campus accounts; and
• Requires public disclosure of campus banking contracts, including prominent posting on school websites as well as submission to a centralized database.

For the comments, click here.