Publication: Consumer Reports
Summary: Consumer Reports reviewed campus banking products offered by nine financial companies to compare their terms and calculate their costs.
It found that while some products offered simple, low-cost fee structures and convenient access to funds, others charged high or multiple usage fees that could add up to hundreds of dollars for frequent users. Fees varied by campus, and fee schedules were often difficult to obtain.
The report compares products on their fee schedules and offers “Student Banking Tips” for consumers.
The report comes as the Education Department is preparing to issue new rules governing campus debit cards and other banking products. Many of the report’s recommendations echo proposals pushed by consumer advocates during recent rule-making negotiations. Consumers Union, the public-policy and advocacy division of Consumer Reports, was represented on the rule-making panel.
Recommendations in the new report include:
- Banning revenue sharing between colleges and financial institutions.
- Requiring colleges to present student-aid recipients with clear and neutral information about their options for receiving aid refunds.
- Requiring colleges to submit their campus banking contracts to the Education Department for inclusion in a publicly accessible database.
The report also urges the federal Consumer Financial Protection Bureau to proceed with plans to extend consumer protections for traditional accounts to prepaid accounts.
Bottom Line: Campus banking products vary considerably when it comes to fees and transparency. Students need more information and consumer protections when navigating the marketplace of products.