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CU Comments of CFPB’s “Safe Student Account” Initiative

Consumers Union, the policy and advocacy arm of Consumer Reports, appreciates the opportunity to comment on the Bureau’s initiative to create a “Safe Student Account Scorecard” for schools to use when negotiating campus banking agreements with financial institutions.

We believe this initiative is an important step toward improving the quality and transparency of campus banking agreements. We offer the following suggestions to strengthen the Scorecard initiative, so that it guides schools toward selecting contract terms that will be in the best interests of their students:

  • Create a “school edition” of the scorecard, much like the teacher’s edition of a textbook, that provides specific guidance to schools on:
    • which account terms and features are better for students;
    • which marketing practices are more likely to cause conflicts of interest; and
    • which items should never be part of an agreement to offer campus banking products to students.
  • Provide accompanying information throughout the Scorecard about minimum requirements for accounts regulated by the Department of Education’s “cash management” rules for Title IV funds, so that schools have all the information they need in one place for ensuring compliance while negotiating a good deal for students. We believe that the cash management rules provide an important floor for protecting students – and that schools should apply the rules to any account offering they are evaluating. We encourage both agencies to continue their ongoing coordination on campus banking issues, as the Department considers new rules this year.

To read the full comment, click the link below.