Findings on campus banking products released this past Monday by the CFPB in conjunction with a Banking on Campus Forum held in Washington, D.C. appear to be a harbinger of new limitations on the marketing of these products.  The findings were based on comments the CFPB received in response to a January 2013 notice seeking input on a variety of issues with regard to these products, including the information shared between schools and financial institution providers, the way these products are marketed, the fee structures for these products, how marketing arrangements are established, and student experiences with these products. 

The CFPB found that campus financial product marketing partnerships have shifted toward student checking and debit or prepaid cards.  (The CFPB suggests this shift is the result of federal law restrictions on credit card affinity arrangements and student loan referrals.)  According to the CFPB, student checking products affiliated with colleges generally did not have more attractive features compared to unaffiliated products and in some cases, the unaffiliated products offered more attractive options.  

The CFPB also found that arrangements between financial institutions and schools to offer student banking products “are not well-understood.”  Director Cordray’s more pointed statement in his prepared remarks that students may be unaware when signing up for these products that their schools are “secretly making money” strongly suggests that disclosures regarding the benefits a school receives from affiliated banking products will be a component of any new CFPB initiative.