[Federal Register Volume 78, Number 24 (Tuesday, February 5, 2013)]
[Notices]
[Pages 8114-8117]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-02428]


-----------------------------------------------------------------------

BUREAU OF CONSUMER FINANCIAL PROTECTION

[Docket No. CFPB-2013-0003]


Request for Information Regarding Financial Products Marketed to 
Students Enrolled in Institutions of Higher Education

AGENCY: Bureau of Consumer Financial Protection.

ACTION: Notice and request for information.

-----------------------------------------------------------------------

SUMMARY: Section 1021 of the Dodd-Frank Wall Street Reform and Consumer 
Protection Act of 2010 (Dodd-Frank Act) charges the Consumer Financial 
Protection Bureau (Bureau or CFPB) with ``collecting, researching, 
monitoring and publishing information'' about consumer financial 
products and services. The Bureau seeks information on how current and 
future partnerships or other arrangements between institutions of 
higher education (including their affiliated entities) and financial 
institutions could be structured to promote positive financial 
decision-making among young consumers. We also seek information to 
develop a clearer picture of the financial products and services that 
are being offered to college students, as well as consumers' 
experiences using those products and services. The Bureau

[[Page 8115]]

encourages comments from the public; including student and parent 
consumers, institutions of higher education, and financial 
institutions.

DATES: Comments must be received on or before March 18, 2013.

ADDRESSES: You may submit responsive information and other comments, 
identified by Docket No. CFPB-2013-0003, by any of the following 
methods:
     Electronic: http://www.regulations.gov. Follow the 
instructions for submitting comments.
     Mail/Hand Delivery/Courier: Monica Jackson, Office of the 
Executive Secretary, Consumer Financial Protection Bureau, 1700 G 
Street NW., Washington, DC 20552.
    Instructions: The Bureau encourages the early submission of 
comments. All submissions must include the document title and docket 
number. Because paper mail in the Washington, DC area and at the Bureau 
is subject to delay, commenters are encouraged to submit comments 
electronically. Please note the number associated with any question to 
which you are responding at the top of each response (you are not 
required to answer all questions to receive consideration of your 
comments). In general, all comments received will be posted without 
change to http://www.regulations.gov. Please do not include personal 
information in your comment that you do not wish to be made publicly 
available. In addition, comments will be available for public 
inspection and copying at 1700 G Street NW., Washington, DC 20552, on 
official business days between the hours of 10 a.m. and 5 p.m. Eastern 
Standard Time. You can make an appointment to inspect the documents by 
telephoning 202-435-7275.
    All submissions, including attachments and other supporting 
materials, will become part of the public record and subject to public 
disclosure. Sensitive personal information, such as account numbers or 
Social Security numbers, should not be included. Submissions will not 
be edited to remove any identifying or contact information.

FOR FURTHER INFORMATION CONTACT: For general inquiries, submission 
process questions or any additional information, please contact Monica 
Jackson, Office of the Executive Secretary, at 202-435-7275.

    Authority: 12 U.S.C. 5511(c).

SUPPLEMENTARY INFORMATION: Section 1021 of the Dodd-Frank Wall Street 
Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) charges the 
Consumer Financial Protection Bureau (Bureau or CFPB) with 
``collecting, researching, monitoring and publishing information'' 
about consumer financial products and services. The Bureau seeks 
information on how current and future partnerships or other 
arrangements between institutions of higher education (including their 
affiliated entities) and financial institutions can be structured to 
promote positive financial decision-making and building of money 
management skills among young consumers. We also seek information to 
develop a clearer picture of the financial products and services that 
are being offered to college students, as well as consumers' 
experiences using those products and services. The deadline for 
submission of comments is March 18, 2013.
    The Bureau encourages comments from the public, including:
     Student and parent consumers;
     Institutions of higher education;
     Alumni associations;
     Providers of financial aid disbursement services;
     Financial institutions; and
     Other interested parties.
    The Bureau is interested in receiving comments that could bear on 
its analysis of the student financial product and services market. The 
Bureau is therefore interested in responses to the questions outlined 
below.
    Please note that the Bureau is not soliciting individual student 
account information in response to this notice and request for 
information, nor is the Bureau seeking personally identifiable 
information (PII) regarding student accounts from the parties or any 
third party. Responses should not contain account numbers, Social 
Security numbers or other personal information that could be used to 
reveal personally identifiable information. Below are some general 
areas for which information is being sought. Please feel free to 
respond to any or all of the questions below:
    (1) Products marketed through campus affinity relationships.
    Campus affinity products are generally financial products and 
services that carry an endorsement (either explicit or implicit) or 
mark of an institution of higher education. Examples of these products 
include those that that display the name or mark of the institution, 
are bundled with student identification cards, and cards on which 
students can receive disbursements of financial aid or other funds from 
the institution of higher education.
    In the past, relationships between financial institutions and 
institutions of higher education have drawn scrutiny and led to 
legislative action. For example, in 2007, former New York Attorney 
General Andrew Cuomo pursued action to address the steering of students 
to certain lenders of federal and private student loans in exchange for 
remuneration. For years, institutions of higher education provided 
access to financial institutions to market credit cards to students. 
Congress addressed school preferred lender arrangements and marketing 
of campus credit cards on college campuses in legislation enacted in 
2008 and 2009.
    However, institutions of higher education may be uniquely 
positioned to create a beneficial environment for students in the 
selection of financial products and services. The Bureau is interested 
in better understanding the types of campus affinity products being 
offered, how institutions of higher education are defining these 
relationships, and the experience of students using these products. The 
Bureau seeks information on how partnerships between institutions of 
higher education (including their affiliated entities) and financial 
institutions might be structured to promote positive financial 
decision-making among young consumers.
    (a) What types of campus affinity products are being offered to 
students (e.g., financial aid disbursement accounts, student banking, 
prepaid cards, and credit cards)?
    (b) What are the features of these campus affinity products (e.g., 
online bill pay, mobile check deposit)?
    (c) In what ways are campus-affiliated products marketed to 
students (e.g., included in campus admissions and/or financial aid 
offer letters, orientation materials, advertising at college sporting 
events)?
    (d) What information about students is provided by institutions of 
higher education to financial institutions (e.g., email address, date 
of birth, program of study)?
    (e) How are card or other products offered to students (e.g., 
mandatory, opt-out, opt-in)? Does the student have a choice to decline 
the product? If so, what steps are required to exercise that choice? 
Are there any consequences to the student for declining the product?
    (f) What percentage of students at a college or university use the 
affinity product (e.g., financial aid disbursement, student checking 
accounts)? What percentage of financial aid recipients use the affinity 
product?
    (g) To what extent are students able to choose a product other than 
the affinity banking product associated with the institution of higher 
education? What percentage of students do so?

[[Page 8116]]

    (h) What types of fees are being charged in association with these 
products (e.g., overdraft and/or swipe fees)? What are the typical fee 
amounts? What are the terms and conditions of these products?
    (i) To what extent are students able or not able to readily access 
funds from affinity products while on campus? Does the financial 
institution provide multiple ATMs? Where are those ATMs located (e.g., 
on campus, near campus)? Are ATMs also located on branch campuses? Do 
ATMs charge fees for withdrawal? If so, what are the fees and how are 
they assessed?
    (j) What is the nature, number, and frequency of complaints related 
to these campus affinity products? Please do not include account 
numbers, Social Security numbers or other personal information that 
could be used to reveal personally identifiable information.
    (k) Please describe the student experience in contacting the 
providers of campus affinity products with questions, errors, concerns, 
and complaints. What level of service do students receive? Have 
students been treated in a fair, clear, and timely manner? Please 
provide examples.
    (l) What challenges do institutions of higher education face when 
setting up these agreements?
    (m) What terms do institutions of higher education agree to when 
they affiliate with a financial institution to offer students financial 
products and services? Please feel free to submit copies of any 
specific affinity agreements. Please ensure that any specific 
agreements do not contain any personally identifiable information.
    (n) What types of limitations, if any, do these affinity agreements 
include with respect to the fees that will be charged to student users 
of the products?
    (o) What additional information would have been helpful to the 
institution of higher education before setting up an affinity 
agreement?
    (p) How much revenue do institutions of higher education generally 
receive annually in connection with these agreements? How does that 
revenue break down between student checking accounts, credit cards and 
other products and services? Is the revenue based on a per student 
basis, by number and/or volume of transactions by students, level of 
student account balances, fee revenue, or other measures?
    (q) Does an institution of higher education save in operating costs 
or generate revenue by contracting with a financial aid disbursement 
vendor? If so, in what amounts?
    (r) What are best practices or model terms for institutions that 
are looking to set up and/or renegotiate an agreement with financial 
institutions to offer products and services?
    (s) What types of incentives do affinity agreements offer 
institutions of higher education?
    (t) What types of incentives, if any, do students receive for 
choosing an affinity product?
    (u) To what extent do institutions of higher education solicit 
requests for proposal for affinity agreements? What are some examples 
of an institution's request for proposal?
    (v) Do institutions of higher education provide access to campus 
property to financial institutions in order to market products or 
provide workshops?
    (w) To what extent are financial products bundled with student ID 
cards? What percentage of students utilize these bundled financial 
products (e.g., a student ID card that doubles as a debit card, or 
closed-loop meal card accepted by local business)? Are there any 
charges or fees associated with the use of the bundled financial 
product? If yes, how are they assessed?
    (x) To what extent are affinity financial products also bundled 
with financial education programs? What is the utilization of these 
education programs and how does it affect student behavior?
    (y) How do campus affinity products compare with banking products 
available to college students that are offered by financial 
institutions not affiliated with the institution of higher education?
    (2) Other financial products marketed to students.
    For many students, choosing a bank account is one of their first 
significant financial decisions, especially since the first banking 
relationship may last long after graduation. Students who understand 
how banking products work and when fees will be charged can save 
hundreds of dollars in fees each year. For example, according to a 2008 
FDIC report, while half of young Americans manage to avoid overdraft 
fees, the other half incurs approximately seven overdrafts each per 
year.\1\
---------------------------------------------------------------------------

    \1\ FDIC, FDIC Study of Bank Overdraft Programs November 2008, 
79 (2008).
---------------------------------------------------------------------------

    (a) What types of financial products are tailored to the student 
consumer segment?
    (b) What factors do students and parents consider when choosing 
financial products tailored for students? Which are the most important 
factors?
    (c) What type of information is helpful in making that decision?
    (d) How do financial institutions market these products to students 
and parents? Do financial institutions purchase enrollment information 
from third parties? Do financial institutions engage marketing 
consultants who specialize in the student consumer segment?
    (e) What types of discounts and benefits are offered to students 
who sign up for a student banking account?
    (f) What percentage of students sign up for student banking from 
banks and credit unions that are located on or in close proximity to 
the campus?
    (g) What types of issues/complaints do students/parents have with 
these accounts?
    (h) On average, how much does a student pay in fees per year?
    (i) Which fees do students get charged most often?
    (j) What are the features of the different types of financial 
products and services that banks and credit unions offer to students? 
Are these financial products marketed as free checking for students?
    (k) What restrictions do consumers need to satisfy in order to 
qualify for the student banking product or services? For example, does 
a student need to be enrolled in school full time or attend a 
particular institution? How is a student's status verified (e.g., 
student ID, transcript, notice of enrollment)?
    (l) Are the terms and conditions of student banking products 
(including, for example, amount and frequency of fees or penalties) 
clearly disclosed, disclosed in a timely manner, and easy to 
understand? Have students had difficulty understanding and/or complying 
with these terms and conditions? Please provide examples.
    (m) What percentage of student accounts have parents and/or family 
members as co-signers or joint account holders?
    (n) To what extent do students use general purpose reloadable 
cards? How do institutions of higher education and financial 
institutions market these cards to students?
    (o) How many students opt in to overdraft coverage?
    (p) Do students usually sign up for their new account online or 
through a live interaction?
    (q) How many student account holders do financial institutions 
serve?
    (r) What percentage of students maintain an account or relationship 
with the financial institution after graduation or separation from 
college? After a student graduates or separates from college how does 
their relationship with their financial institution change

[[Page 8117]]

(e.g., do they sign up for additional products and services)?

    Dated: January 30, 2013.
Garry Reeder,
Chief of Staff, Bureau of Consumer Financial Protection.
[FR Doc. 2013-02428 Filed 2-4-13; 8:45 am]
BILLING CODE 4810-AM-P