On August 29th, Consumers Union released a report on campus banking products, finding that while campus banking arrangements can be convenient for students and cost effective for schools, some products have come under scrutiny for controversial fees and policies. The report warned that banking agreements between schools and financial firms may result in arrangements that expose students to aggressive marketing tactics, high or unusual fees, and restricted choices for managing their money. The report called for federal regulators to protect consumers in this area. The report also called upon Congress to ban both direct and indirect revenue-sharing agreements between schools and financial firms. The report also recommended that the DOE amend its rules to ensure a neutral marketplace for financial aid disbursement, as well as safe and convenient access to funds for campus banking products. It also called upon the DOE to explore a Department administered refund disbursement card with strong consumer protections.
As expected, even though the report noted that “[m]ost of the accounts…reviewed can be used minimally for low or no fees,” Consumers Union still took a very negative approach, focusing on the alleged lack of transparency and the overall detriment to students who use campus banking products.
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