The Consumer Financial Protection Bureau said Wednesday (Dec. 14) that fees and risk can be hallmarks of college-sponsored financial products. In a new report analyzing 500 marketing pacts that exist between schools and banks, the bureau stated that it “found that many deals allow for risky features.” And those risky features, added the CFPB, can amount to hundreds of dollars in fees annually. The report issued by the CFPB also reminded higher education entities that they must disclose the agreements they enter into with credit card firms.
The fees are high enough that students can find comparatively better rates shopping around for credit cards on their own terms, and as many as 10 million students nationwide are enrolled in schools that have linked up with financial firms to promote checking or prepaid products.
Among the concerns noted by the CFPB, these bank pacts do not limit fees, including overdraft or ATM fees. All told, last year, said the CFPB, financial firms paid $27 million tied in part to more than 800,000 cards currently part of marketing agreements. And in terms of transparency, said the CFPB, some schools did not post copies of agreements on their sites.