[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4714 Introduced in House (IH)]

113th CONGRESS
  2d Session
                                H. R. 4714

To amend the Higher Education Act of 1965 to establish requirements for 
        preferred banking arrangements, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 22, 2014

 Mr. George Miller of California (for himself, Ms. Waters, Mr. Welch, 
  Ms. Slaughter, Mr. Scott of Virginia, Mr. Cummings, Mr. Waxman, Mr. 
   Conyers, Mr. Tierney, Mrs. Davis of California, Mr. Grijalva, Mr. 
 Bishop of New York, Mr. Sablan, Ms. Wilson of Florida, Ms. Bonamici, 
 Mr. Pocan, Mr. Takano, Mr. Ellison, Mr. Cartwright, Ms. Clarke of New 
 York, Mr. Jeffries, Mr. McDermott, Mr. Nadler, Ms. Pingree of Maine, 
  Mr. Huffman, Mr. Thompson of California, Ms. Lee of California, Ms. 
   Lofgren, Ms. Chu, Mrs. Napolitano, Mr. Lowenthal, Ms. Brownley of 
  California, Mr. Schiff, Ms. Bass, Mr. Enyart, Ms. Norton, Ms. Shea-
  Porter, Mr. Rangel, Mrs. McCarthy of New York, Mr. Butterfield, Ms. 
Eshoo, Mr. Meeks, Mr. Sarbanes, Mr. Hinojosa, Mr. Farr, Ms. Matsui, Mr. 
Danny K. Davis of Illinois, Ms. Schakowsky, Mr. Carson of Indiana, Ms. 
Speier, Ms. Brown of Florida, Mr. Van Hollen, Mr. Honda, Mr. Clay, Mr. 
 DeFazio, Ms. Frankel of Florida, Ms. Fudge, Mr. Gene Green of Texas, 
     Mr. Yarmuth, Mr. Braley of Iowa, Mr. Rush, and Mr. Garamendi) 
 introduced the following bill; which was referred to the Committee on 
 Financial Services, and in addition to the Committee on Education and 
   the Workforce, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

_______________________________________________________________________

                                 A BILL


 
To amend the Higher Education Act of 1965 to establish requirements for 
        preferred banking arrangements, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Curbing Abusive Marketing Practices 
with University Student Debit Cards Act'' or the ``CAMPUS Debit Cards 
Act''.

SEC. 2. PREFERRED BANKING ARRANGEMENTS.

    Section 487 of the Higher Education Act of 1965 (20 U.S.C. 1094) is 
amended--
            (1) in subsection (a), by adding at the end the following 
        new paragraph:
            ``(30) In the case of an institution that has entered into 
        a preferred banking arrangement, the institution will meet the 
        requirements of subsection (k).'';
            (2) in subsection (i), by adding at the end the following 
        new paragraph:
            ``(7) Preferred banking arrangement.--
                    ``(A) In general.--The term `preferred banking 
                arrangement' means an arrangement or agreement between 
                a financial institution and an institution of higher 
                education under which the institution of higher 
                education directly or indirectly recommends, promotes, 
                or endorses to its students, or requires the delivery 
                of funds awarded under this Act to its students 
                through, the deposit accounts or the general-use 
                prepaid cards of the financial institution or the 
                financial institution in general.
                    ``(B) Financial terms.--For purposes of this 
                paragraph--
                            ``(i) the terms `bank' and `savings 
                        association' have the definition given those 
                        terms, respectively, under section 3 of the 
                        Federal Deposit Insurance Act (12 U.S.C. 1813);
                            ``(ii) the term `credit union' means a 
                        Federal credit union and a State credit union 
                        as those terms are defined, respectively, under 
                        section 101 of the Federal Credit Union Act (12 
                        U.S.C. 1752);
                            ``(iii) the term `financial institution' 
                        means a bank, savings association, credit 
                        union, or a person who has entered into an 
                        agreement with a bank, savings association, or 
                        credit union; and
                            ``(iv) the term `general-use prepaid 
                        card'--
                                    ``(I) means a card or other payment 
                                code or device issued by any person 
                                that is--
                                            ``(aa) redeemable at 
                                        multiple merchants or service 
                                        providers, or automated teller 
                                        machines;
                                            ``(bb) purchased or loaded 
                                        on a prepaid basis; and
                                            ``(cc) honored, upon 
                                        presentation, by merchants for 
                                        goods or services, or at 
                                        automated teller machines; and
                                    ``(II) does not include an 
                                electronic promise, plastic card, or 
                                payment code or device that is--
                                            ``(aa) used solely for 
                                        telephone services;
                                            ``(bb) a loyalty, award, or 
                                        promotional gift card, as 
                                        defined by the Secretary;
                                            ``(cc) issued in paper form 
                                        only (including for tickets and 
                                        events); or
                                            ``(dd) redeemable solely 
                                        for admission to events or 
                                        venues at a particular location 
                                        or group of affiliated 
                                        locations, which may also 
                                        include services or goods 
                                        obtainable at the event or 
                                        venue after admission or in 
                                        conjunction with admission to 
                                        such events or venues, at 
                                        specific locations affiliated 
                                        with and in geographic 
                                        proximity to the event or 
                                        venue.''; and
            (3) by adding at the end the following new subsection:
    ``(k) Requirements for Preferred Banking Arrangement.--
            ``(1) In general.--An institution of higher education that 
        enters into a preferred banking arrangement with a financial 
        institution shall--
                    ``(A) develop a code of conduct with respect to the 
                preferred banking arrangement with which the officers, 
                employees, and agents of the institution of higher 
                education shall comply, that--
                            ``(i) prohibits a conflict of interest with 
                        the responsibilities of an officer, employee, 
                        or agent of the institution of higher education 
                        with respect to such arrangement;
                            ``(ii) requires each such officer, 
                        employee, and agent to act in the best 
                        interests of the students enrolled at the 
                        institution of higher education in carrying out 
                        such arrangement; and
                            ``(iii) at a minimum, includes the 
                        provisions described in paragraph (2);
                    ``(B) publish such code of conduct prominently on 
                the website of the institution of higher education;
                    ``(C) administer such code by, at a minimum, 
                requiring that all of the officers, employees, and 
                agents of the institution of higher education with 
                responsibilities with respect to the preferred banking 
                arrangement be annually informed of the provisions of 
                the code of conduct; and
                    ``(D) provide effective enforcement of such code.
            ``(2) Code of conduct requirements.--The code of conduct 
        requirements described in this paragraph are as follows:
                    ``(A) Ban on revenue-sharing arrangements.--
                            ``(i) Prohibition.--The institution of 
                        higher education shall not enter into any 
                        revenue-sharing arrangement with any financial 
                        institution.
                            ``(ii) Definition.--For purposes of this 
                        subparagraph, the term `revenue-sharing 
                        arrangement'--
                                    ``(I) means an arrangement between 
                                an institution of higher education and 
                                a financial institution under which--
                                            ``(aa) a financial 
                                        institution provides deposit 
                                        accounts or general-use prepaid 
                                        cards to students attending the 
                                        institution of higher education 
                                        or to the families of such 
                                        students; and
                                            ``(bb) the institution of 
                                        higher education recommends, 
                                        promotes, utilizes, sponsors, 
                                        or otherwise endorses the 
                                        financial institution or the 
                                        deposit accounts or general-use 
                                        prepaid cards of the financial 
                                        institution and in exchange, 
                                        the financial institution pays 
                                        a fee or provides other 
                                        material benefits, including 
                                        revenue or profit sharing, to 
                                        the institution of higher 
                                        education, or an officer, 
                                        employee, or agent of the 
                                        institution of higher 
                                        education; and
                                    ``(II) does not include an 
                                arrangement under which a financial 
                                institution pays a fair market price to 
                                an institution of higher education for 
                                the advertising or marketing of the 
                                financial institution to the general 
                                public by the institution of higher 
                                education.
                    ``(B) Gift ban.--
                            ``(i) Prohibition.--No officer, employee, 
                        or agent of an institution of higher education 
                        who has responsibilities with respect to a 
                        preferred banking arrangement or has other 
                        responsibilities with respect to a financial 
                        institution shall solicit or accept any gift 
                        from the financial institution.
                            ``(ii) Definition.--In this subparagraph, 
                        the term `gift' means any gratuity, favor, 
                        discount, entertainment, hospitality, loan, or 
                        other item having a monetary value of more than 
                        a de minimus amount. The term includes a gift 
                        of services, transportation, lodging, or meals, 
                        whether provided in kind, by purchase of a 
                        ticket, payment in advance, or reimbursement 
                        after the expense has been incurred.
                            ``(iii) Exceptions.--The term `gift' shall 
                        not include any of the following:
                                    ``(I) Standard material, 
                                activities, or programs on issues 
                                related to a loan, default aversion, 
                                default prevention, or financial 
                                literacy, such as a brochure, a 
                                workshop, or training, but only if such 
                                materials, activities, or programs do 
                                not promote a product or service of a 
                                financial institution.
                                    ``(II) Favorable terms, conditions, 
                                and benefits on the financial products 
                                of the financial institution made 
                                available to all employees of the 
                                institution of higher education if such 
                                terms, conditions, or benefits are 
                                comparable to those provided to all 
                                students of the institution of higher 
                                education.
                                    ``(III) Entrance and exit 
                                counseling services provided to 
                                borrowers to meet the responsibilities 
                                of the institution of higher education 
                                for entrance and exit counseling as 
                                required by subsections (b) and (l) of 
                                section 485, as long as--
                                            ``(aa) the staff of the 
                                        institution of higher education 
                                        are in control of the 
                                        counseling (whether in person 
                                        or via electronic 
                                        capabilities); and
                                            ``(bb) such counseling does 
                                        not promote the products or 
                                        services of any specific 
                                        lender.
                                    ``(IV) Philanthropic contributions 
                                to an institution of higher education 
                                from a financial institution that are 
                                unrelated to the deposit accounts or 
                                the general-use prepaid cards of the 
                                financial institution or the financial 
                                institution in general or any 
                                contribution from the financial 
                                institution that is not made in 
                                exchange for any advantage related to 
                                the financial institution.
                                    ``(V) State education grants, 
                                scholarships, or financial aid funds 
                                administered by or on behalf of a 
                                State.
                            ``(iv) Rule for gifts to family members.--
                        For purposes of this subparagraph, a gift to a 
                        family member of an officer, employee, or agent 
                        of an institution of higher education, or to 
                        any other individual based on that individual's 
                        relationship with the officer, employee, or 
                        agent, shall be considered a gift to the 
                        officer, employee, or agent if--
                                    ``(I) the gift is given with the 
                                knowledge and acquiescence of the 
                                officer, employee, or agent; and
                                    ``(II) the officer, employee, or 
                                agent has reason to believe the gift 
                                was given because of the official 
                                position of the officer, employee, or 
                                agent.
                    ``(C) Ban on staffing assistance.--
                            ``(i) Prohibition.--The institution of 
                        higher education shall not request or accept 
                        from any financial institution any assistance 
                        with any office or department of the 
                        institution of higher education.
                            ``(ii) Certain assistance permitted.--
                        Nothing in this paragraph shall be construed to 
                        prohibit the institution of higher education 
                        from requesting or accepting assistance from a 
                        financial institution related to--
                                    ``(I) professional development 
                                training for financial aid 
                                administrators;
                                    ``(II) providing educational 
                                counseling materials, financial 
                                literacy materials, or debt management 
                                materials to borrowers, provided that 
                                such materials disclose to borrowers 
                                the identification of any financial 
                                institution that assisted in preparing 
                                or providing such materials; or
                                    ``(III) staffing services on a 
                                short-term, nonrecurring basis to 
                                assist the institution of higher 
                                education with financial aid-related 
                                functions during emergencies, including 
                                State-declared or federally declared 
                                natural disasters, federally declared 
                                national disasters, and other localized 
                                disasters and emergencies identified by 
                                the Secretary.
                    ``(D) Contracting arrangements prohibited.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), an officer, employee, or agent of 
                        an institution of higher education who has 
                        responsibilities with respect to a preferred 
                        banking arrangement or has other 
                        responsibilities with respect to a financial 
                        institution shall not accept from any financial 
                        institution any fee, payment, or other 
                        financial benefit (including the opportunity to 
                        purchase stock) as compensation for any type of 
                        consulting arrangement or other contract to 
                        provide services to or on behalf of the 
                        financial institution.
                            ``(ii) Exception.--Clause (i) shall not 
                        prohibit an institution of higher education 
                        from permitting an officer, employee, agent, or 
                        contractor of a financial institution to serve 
                        on a board of directors, or as a trustee, of 
                        the institution of higher education, if the 
                        institution of higher education has a written 
                        conflict of interest policy that requires such 
                        a board member or trustee to recuse themselves 
                        from any decision regarding deposit or prepaid 
                        accounts or a preferred banking arrangement at 
                        the institution of higher education.
                    ``(E) Interaction with students.--The institution 
                of higher education shall not deny or cause unnecessary 
                delay in the disbursement of a loan or grant under this 
                title based on a student's selection of a particular 
                financial institution.
                    ``(F) Advisory board compensation.--An employee, 
                officer, or agent of an institution of higher education 
                who has responsibilities with respect to a preferred 
                banking arrangement or has other responsibilities with 
                respect to a financial institution, and who serves on 
                an advisory board, commission, or group established by 
                a financial institution, shall be prohibited from 
                receiving anything of value from the financial 
                institution, except that the employee may be reimbursed 
                for reasonable expenses incurred in serving on such 
                advisory board, commission, or group.''.

SEC. 3. DISBURSEMENT OF CREDIT BALANCE.

    Part G of title IV of the Higher Education Act of 1965 (20 U.S.C. 
1088 et seq.) is amended by adding at the end the following:

``SEC. 493E. DISBURSEMENT OF CREDIT BALANCE.

    ``(a) Establishment of System for Disbursement.--Not later than 3 
years after the date of enactment of the CAMPUS Debit Cards Act, each 
institution of higher education that enrolls a student who receives a 
grant or loan under this title shall establish a system for the 
disbursement of credit balances in accordance with subsection (b).
    ``(b) Electronic Payment System.--Each institution of higher 
education described in subsection (a) shall establish a system for 
disbursement of credit balances through electronic payments to a 
deposit account or a general-use prepaid card (defined in section 
487(i)(7)) with the protections afforded under the Electronic Fund 
Transfer Act (15 U.S.C. 1693 et seq.).
    ``(c) Distribution Options.--The Secretary of Education, in 
consultation with the Secretary of the Treasury and the Bureau of 
Consumer Financial Protection, shall conduct a pilot program on 
providing students with the option of receiving credit balances by 
using the Treasury Direct Express system established under section 3336 
of title 31, United States Code, or through any other low-cost 
alternative as determined by the Secretary.
    ``(d) Credit Balance.--In this section, the term `credit balance' 
means the amount of program funds under this title credited to a 
student's ledger account at an institution of higher education that 
exceed the amount assessed the student by the institution for allowable 
institutional charges, as defined by the Secretary.''.

SEC. 4. PREVENTING UNFAIR AND DECEPTIVE MARKETING OF FINANCIAL PRODUCTS 
              TO STUDENTS OF INSTITUTIONS OF HIGHER EDUCATION.

    (a) In General.--The Consumer Financial Protection Act of 2010 is 
amended by inserting after section 1031 the following:

``SEC. 1031A. PREVENTING UNFAIR AND DECEPTIVE MARKETING OF FINANCIAL 
              PRODUCTS TO STUDENTS OF INSTITUTIONS OF HIGHER EDUCATION.

    ``(a) Definitions.--In this section:
            ``(1) Financial institution.--The term `financial 
        institution' means any institution that offers, provides, or 
        issues financial products, including banks, savings 
        associations, and credit unions.
            ``(2) Institution of higher education.--The term 
        `institution of higher education' has the meaning given that 
        term in section 102 of the Higher Education Act of 1965 (20 
        U.S.C. 1002).
    ``(b) Disclosure Required.--
            ``(1) Disclosure by institutions of higher education.--An 
        institution of higher education, or an alumni organization or 
        foundation affiliated with or related to an institution of 
        higher education, shall publicly disclose (including on the 
        website of such institution, organization, or foundation) any 
        contract or other agreement made with a financial institution 
        for the purpose of marketing a financial product--
                    ``(A) in the case of a contract or agreement 
                entered into before the date of enactment of this 
                section, by not later than 90 days after such date of 
                enactment; and
                    ``(B) in the case of a contract or agreement 
                entered into on or after such date of enactment, by not 
                later than 90 days after the institution, organization, 
                or foundation enters into the contract or agreement.
            ``(2) Reports by financial institutions.--
                    ``(A) In general.--Each financial institution shall 
                submit an annual report to the Bureau containing the 
                terms and conditions of all contracts or other 
                agreements made with an institution of higher 
                education, or an alumni organization or foundation 
                affiliated with or related to an institution of higher 
                education, relating to any financial product offered to 
                students at such institution of higher education.
                    ``(B) Details of report.--The report under 
                subparagraph (A) shall include--
                            ``(i) any memorandum of understanding 
                        between or among the financial institution and 
                        an institution of higher education, alumni 
                        organization, or foundation that directly or 
                        indirectly relates to any aspect of any 
                        agreement referred to in subparagraph (A) or 
                        controls or directs any obligations or 
                        distribution of benefits between or among any 
                        such entities;
                            ``(ii) the amount of any payments from the 
                        financial institution to the institution of 
                        higher education, alumni organization, or 
                        foundation during the period covered by the 
                        report, and the precise terms of any agreement 
                        under which such amounts are determined; and
                            ``(iii) the number of financial products 
                        covered by any such agreement that were 
                        originated during the period covered by the 
                        report, and the total number of financial 
                        products covered by the agreement that were 
                        outstanding at the end of such period.
                    ``(C) Aggregation of information.--The information 
                required to be reported under subparagraph (A) shall be 
                aggregated with respect to each institution of higher 
                education or alumni organization or foundation 
                affiliated with or related to such institution of 
                higher education.
                    ``(D) Initial report.--The initial report required 
                under subparagraph (A) shall be submitted to the Bureau 
                not later than 1 year after the date of enactment of 
                this section.
            ``(3) Reports by bureau.--The Bureau shall submit to 
        Congress, and make available to the public, an annual report 
        that lists the information concerning the agreements submitted 
        to the Bureau under paragraph (2) by each financial 
        institution, institution of higher education, alumni 
        organization, or foundation.
            ``(4) Record repository.--The Bureau shall establish and 
        maintain on its publicly available website a central repository 
        of all contracts and other agreements contained in reports 
        received from financial institutions pursuant to this 
        paragraph, and such contracts and agreements shall be in a form 
        that is easily accessible and retrievable by the public.
    ``(c) Inducements Prohibited.--No financial institution may offer 
to a student at an institution of higher education any tangible or 
intangible item to induce the student to apply, purchase, or obtain a 
financial product offered by the financial institution, if the offer is 
made-
            ``(1) on the campus of an institution of higher education;
            ``(2) near the campus of an institution of higher 
        education, as determined by rule of the Bureau; or
            ``(3) at an event sponsored by or related to an institution 
        of higher education.''.
    (b) Rulemaking Required.--Not later than the end of the 2-year 
period beginning on the date of the enactment of this Act, the Bureau 
of Consumer Financial Protection shall issue regulations identifying as 
unlawful unfair, deceptive, or abusive acts or practices in connection 
with any transaction with a consumer for a consumer financial product 
or service, or the offering of a consumer financial product or service, 
as described under section 1031 of the Consumer Financial Protection 
Act of 2010 (12 U.S.C. 5531).
    (c) Technical and Conforming Amendment.--The table of contents of 
the Dodd-Frank Wall Street Reform and Consumer Protection Act is 
amended by adding after the item relating to section 1031 the 
following:

``1031A. Preventing unfair and deceptive marketing of financial 
                            products to students of institutions of 
                            higher education.''.

SEC. 5. STUDY OF FINANCIAL PRODUCT MARKETING.

    (a) Study.--The Bureau of Consumer Financial Protection shall carry 
out a study on the marketing of financial products to students enrolled 
in institutions of higher education. Such study shall include an 
analysis of--
            (1) the extent to which financial institutions use an 
        institution of higher education's name, emblem, mascot, logo, 
        or other words, pictures, or symbols readily identified with 
        such institution of higher education in the marketing of 
        financial products, including deposit accounts, general purpose 
        reloadable prepaid cards, and payment services;
            (2) the extent to which institutions of higher education 
        provide access to campus facilities and sponsored functions to 
        financial institutions, including orientation activities for 
        new and prospective students; and
            (3) the extent to which agreements between financial 
        institutions and institutions of higher education are 
        accessible for inspection by students and their families.
    (b) Report.--Not later than the end of the 1-year period beginning 
on the date of the enactment of this Act, the Bureau shall issue a 
report to the Committees on Education and the Workforce and Financial 
Services of the House of Representatives and the Committees on Health, 
Education, Labor, and Pensions and Banking, Housing, and Urban Affairs 
of the Senate containing--
            (1) all findings and determinations made in carrying out 
        the study required under subsection (a); and
            (2) any legislative recommendations the Bureau may have.
    (c) Rulemaking.--If, after conducting the study required under 
subsection (a), the Bureau determines that financial products are not 
marketed to students enrolled in institutions of higher education in a 
fair manner, the Bureau shall issue regulations to ensure such products 
are marketed in a fair manner.

SEC. 6. SENSE OF CONGRESS.

    It is the sense of the Congress that financial products marketed to 
students enrolled in institutions of higher education should be 
presented in a fair and neutral manner.

SEC. 7. DEFINITIONS.

    For purposes of this Act, the terms ``financial institution'' and 
``institution of higher education'' have the meanings given the terms 
in section 1031A of the Consumer Financial Protection Act of 2010, as 
added by section 3 of this Act.
                                 <all>