In the bureau’s continued push for transparency, the CFPB recently posted on its blog a student alert regarding “secret” contracts financial institutions have with the 14 “Big Ten” conference schools. The alert warned students to be careful of being steered by their schools into certain debit, prepaid, and other financial products. The post included a table of the bureau’s findings, which indicated 11 of the 14 schools have financial partnerships. Of those, only four provide easy access to their contracts, according to the CFPB, which added that three of the four contracts lacked important information, such as how much the financial institution is paid to allow it to market to students and sell products. The CFPB sent letters to the schools it determined lacked transparency, urging them and their partner financial institutions to increase transparency.
The CFPB’s push for transparency regarding financial institution contracts is just one of the many active inquiries into student affinity products that may impact the payments industry.
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