Sunshine For Campus Debit Cards?
Career College Central summary:
U.S. consumer protection officials this week called for financial institutions to publicly disclose their agreements with colleges to market debit cards and other products to students. The arrangements — which have increasingly come under scrutiny from consumer advocates, federal agencies and lawmakers — often involve financial companies paying colleges to offer institution-branded student ID cards that double as a debit card or separate debit cards that students use to gain access to their federal financial aid money.
The partnerships offer colleges an additional source of revenue while they provide banks and other financial institutions access to a potentially lucrative pool of new customers. But the terms of such agreements should be made publicly available, Consumer Financial Protection Bureau Director Richard Cordray said Tuesday.
The consumer watchdog bureau said Tuesday that it may consider the failure of a financial institution to disclose its arrangements with colleges as an increased risk to consumers, which could, in turn, increase the likelihood that the institution would receive more scrutiny from the bureau.
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