The Consumer Financial Protection Bureau is taking a closer look at partnerships between financial services providers and banks.
The CFPB issued a request for information Friday on financial products marketed to students, including those automatically issued to college students when they arrive on campus.
Many colleges have deals with banks to issue financial products such as checking accounts or prepaid debit cards to students, often building them right into student IDs. It's easy to see how this is a win-win: Banks get thousands of new customers without having to spend money marketing to them, and colleges get a low-cost way to disburse financial aid and may even get a cut of the fee income from the accounts.
What's less clear is whether it's a good deal for students, who may find themselves locked into using a checking account or prepaid debit card that charges higher bank fees and has less generous terms than they could have found on their own.
The request is wide ranging, but these look to be some of the key issues that the CFPB is examining:
- Are the fees and features that students are getting with these accounts comparable to what they might be able to find going out into the marketplace on their own?
- To what degree are students locked into these accounts?
- How happy are the students with the financial products in question?
- What are the benefits for the college itself?
The CFPB will be taking comments on these issues from the public, including students, parents and financial institutions until March 18.
What do you think? Have you ever had any experience with college-sponsored financial products? If so, how was it?
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