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CFPB chides Big Ten schools

By Allison Ross · Bankrate.com
Tuesday, August 5, 2014
Posted: 3 pm ET

The Consumer Financial Protection Bureau this week sent letters to a dozen universities in the Big Ten system, warning about a lack of transparency in their agreements with banks and credit unions to market products to their students.

The CFPB has previously launched an inquiry into bank products marketed to college students, such as debit cards, credit cards or prepaid cards branded with the school's logo.

It says it wanted to see whether the financial partners of some of the largest universities in the country were making their agreements publicly available to students and other consumers.

It chose the Big Ten conference (which has 14 member schools) as a way to look at a sampling of big universities. Of the 14 schools, it found that 13 appear to have agreements with banking partners to market financial products to students.

The CFPB was able to find only 4 of those 13 contracts online on the partners' websites, and "three of those four contracts did not contain important information, such as how much they pay schools to gain access to students in order to market and sell them financial products and services," the CFPB says in a blog post.

"We wanted to alert you that this failure to be transparent may pose potential consumer protection risks," the CFPB wrote in letters to administrators of the Big Ten schools.

Big Ten financial partners

University Financial partner Contract available on partner website?
University of Illinois, Urbana-Champaign TCF Bank Partially
Indiana University IU Credit Union No
University of Iowa Hills Bank & Trust Co. Yes
University of Maryland Capital One No
University of Michigan TCF Bank Partially
Michigan State University MSU Credit Union No
University of Minnesota TCF Bank Partially
University of Nebraska Wells Fargo Bank No
Northwestern University US Bank No
Ohio State University Huntington Bank No
Penn State University PNC Bank No
Purdue University Purdue Credit Union No
Rutgers University Unknown --
University of Wisconsin UW Credit Union No

Source: CFPB

Other organizations in recent years have also raised questions about university-branded financial products and their marketing.

Have you ever gotten a debit card that is co-branded with a college or university? What was your experience?

And if you're in the market for a student checking account, read Bankrate's slideshow about things to consider.

Follow me on twitter: @allisonsross.

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