On April 22nd, Senator Warren, nine other Senators, and 14 members of Congress sent a letter (the “Letter”) to Secretary of Education Duncan urging that the Department of Education (DOE) exercise its rulemaking authority to regulate, limit or outright ban certain practices when colleges enter into agreements with financial providers to offer debit cards, prepaid card and other products which are used for purposes of distributing federal student financial aid to students. … Continue Reading
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. … Continue Reading
Comments made by Director Cordray in an interview with the Washington Post indicate that the CFPB will be taking an aggressive approach to rulemaking in the coming months.
Director Cordray indicated that prepaid cards are “a real front-burner issue for us” and that the CFPB is “moving forward to write rules to make sure they are protected under the [Electronic Fund Transfer Act.]”… Continue Reading
In addition to a flurry of news reports, the U.S. Public Interest Research Group Education Fund’s report on the use of debit cards to disburse federal financial aid to college students has also triggered a letter to the CFPB and the U.S. Department of Education by two Democrat lawmakers. Issued last month, the report found that nearly 900 colleges and universities have agreements with financial institutions under which debit cards are issued to students to access any balance of their financial aid remaining after amounts for tuition and fees have been deducted. … Continue Reading
Recently, the Consumers Union, Center for Public Policy Priorities, Center for Responsible Lending, Coalition of Religious Communities, National Consumer Law Center, SC Appleseed Legal Justice Center and U.S. PIRG called on the CFPB to extend various protections afforded to debit cards under the Electronic Fund Transfer Act and Regulation E to reloadable prepaid cards.… Continue Reading