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Sunshine for college credit card agreements

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Today, we’re releasing a report that looks at deals between financial institutions and colleges to market credit cards to students. Congress requires credit card companies to provide data on these agreements to the CFPB each year, and further requires the CFPB to look at these arrangements in an annual report.

This year we found that there are fewer schools marketing credit cards, and those that do are not making their agreements with credit card companies readily accessible to students.

College debit and prepaid card agreements have surpassed the number of credit card agreements

The Credit CARD Act of 2009 placed new restrictions on marketing credit cards to college students, and requires schools and credit card companies to disclose these agreements publicly. In 2009, there were more than a thousand such agreements in effect. By the end of last year, the number had fallen to 336. According to the Government Accountability Office, in 2013 there were at least 852 schools that had agreements to market debit or prepaid cards to students.

At the end of 2013, there were about 950,000 credit card accounts open under the terms of these agreements. At the end 2009, before the relevant provisions of the CARD Act took effect, there were more than 2 million such accounts. Payments by credit card companies to schools in connection with credit card marketing also declined from nearly $85 million in 2009 to under $43 million in 2013.

Bank of America is the dominant issuer in this market with four times as many credit card agreements in effect in 2013 as its closest competitor. The bank had more than 80 percent of all accounts open under such agreements with schools as of the end of 2013.

Most credit card agreements are with alumni associations

The number of new accounts originated in a given year has increased since 2012. Nearly three-quarters of this new account growth is accounted for by agreements between issuers and alumni associations, indicating that most new accounts likely are issued to alumni, not to students.

Schools may not be making their credit card agreements readily accessible to students

Today’s report also takes a look at how transparent colleges are being about these agreements. Credit card issuers are required to provide prior year agreements to the Bureau, but the law requires colleges and universities to disclose all their credit card agreements, including those currently in effect.

Our analysis shows that most colleges aren’t making it easy for students and the public to learn about what deals are in effect. Just seven of the 35 schools we looked at provided clear information on their websites to find this information. Using a reasonable search protocol, we were unable to locate online any information about such agreements for the remaining 80 percent of our school sample.

To evaluate the accessibility of agreements in the public domain, we identified schools with the largest number of total accounts and the largest enrollment from our agreement database – yielding 35 distinct schools with a combined total of over half a million students.

Next, we created a basic online search methodology to see if we could find the marketing deals – or information about how to obtain them – using a commercial search engine, the sitemap of the institution’s website, and, when it existed, the search engine function on the school website. We found that the overwhelming majority of schools provided no information on their website regarding the agreement. Only one of every five schools provided a link to their marketing deal or online guidance on how to obtain their marketing agreement with a credit card issuer.


Accessibility of agreements on school websites

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More transparency is needed

The CARD Act public disclosure requirement is limited to credit cards and doesn’t include other financial products marketed through schools. We have also called on financial institutions to publicly disclose agreements with schools to market other financial products to students, like debit cards, prepaid cards, and bank accounts. Making these agreements available for all financial products can help bring needed transparency to this market.

Get an in-depth view of this data by checking out the report.

Interested in whether your school or alma mater has a marketing deal with a credit card issuer? Check out our College Credit Card Agreement Database.

Have a problem with your credit card or other financial product? You can submit a complaint online or call (855) 411-2372.

Four steps you can take if you think your credit or debit card data was hacked

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Lately, we’ve received a lot of questions about what to do in light of the recent data breach at Target retail stores. This theft of credit and debit card information could impact tens of millions of consumers and we want to let you know what you can do to protect yourself if you spot fraudulent charges.
Protect your credit and debit card information
If your information was part of a breach, the most immediate risk is that the thieves may make unauthorized charges or debits to your accounts. Keep a close eye on your account activity and report suspicious transactions immediately to your bank or credit card provider. The sooner you tell your provider about any unauthorized debits or charges, the better off you’ll be.

1. Check your accounts for unauthorized charges or debits and continue monitoring your accounts

If you have online or mobile access to your accounts, check your transactions as frequently as possible. If you receive paper statements, be sure to open them and review them closely. If your provider offers it, consider signing up for email or text alerts.

Report even small problems right away. Sometimes thieves will process a small debit or charge against your account and return to take more from your bank account or add more charges to your credit card if the first smaller debit or charge goes through. And keep paying attention—fraudulent charges to your card or fraudulent debits to your bank account might occur many months after the theft of your information during a data breach.

2. Report a suspicious charge or debit immediately

Contact your bank or card provider immediately if you suspect an unauthorized debit or charge. If a thief charges items to your account, you should cancel the card and have it replaced before more transactions come through. Even if you’re not sure that PIN information was taken, consider changing your PIN just to be on the safe side.

If your physical credit card has not been lost or stolen, you’re not responsible for unauthorized charges. You can protect yourself from being liable for unauthorized debit card charges by reporting those charges immediately after you find out about them or they show up on your bank statement.

If you spot a fraudulent transaction, call the card provider’s toll-free customer service number immediately. Follow up with a written letter. Your monthly statement or error resolution notice will tell you how and where to report fraudulent charges or billing disputes.

When you communicate in writing, be sure to keep a copy for your records. Write down the dates you make follow-up calls and keep this information together in a file.

If your card or PIN was lost or stolen, different rules may apply. Your timeline for reporting after your card, PIN, or other access device is lost or stolen is tied to when you discover the loss or theft or when unauthorized transactions show up on your bank statement. Therefore, you should make the report as soon as you know that there is a problem

3. Submit a complaint if you have an issue with your bank or card provider’s response

Debit card issuers should investigate the charges (generally within 10 business days) and take action quickly (generally within 3 business days). For your credit card, it can take longer, but you don’t have to pay the charge while it’s under investigation. You also have a right to see the results of their investigations.

If you have an issue with their response, you can submit a complaint online or by calling (855) 411-2372. For TTY/TDD, call (855) 729-2372.

If you have other questions about billing disputes and your debit and credit card protections, you can Ask CFPB.

4. Know when to ignore anyone contacting you to “verify” your account information by phone or email

This could be a common scam, often referred to as “phishing,” to steal your account information. Banks and credit unions never ask for account information through phone or email that they initiate. If you receive this type of contact, you should immediately call your card provider (using a customer service number that you get from a different source than the initial call or email) and report it.

For more information on phishing scams, check out the FTC’s consumer alerts.

For more information, check out the consumer advisory.

Reminder: Accessing your scholarships and student loan funds

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Earlier this year, the Federal Deposit Insurance Corporation, another banking regulator we work closely with, fined one of the largest providers of campus debit cards. We issued this consumer advisory to all students expecting to receive scholarship and student loan proceeds onto – what appears to be – a school-endorsed debit card.

Many college students, especially those enrolled in community colleges or who live off-campus, receive scholarships, grants, and student loans that are for more than the cost of their tuition. These funds help them pay rent, get to and from school, and cover other costs, like textbooks. Many schools work with third-party financial companies to disburse these funds directly to students.

Consumers should remember the following:

  • You can’t be required to use a specific bank or card. There may be a financial institution that operates on your campus, but you generally can’t be required to use a specific account or card to access your student aid. If you have received a federal student loan, your school must provide a paper check or cash option.
  • Consider choosing an account before arriving at school. Shop around, and don’t feel limited by the banks operating ATMs on or near campus. Some financial institutions don’t charge you for using any ATMs, and some will automatically reimburse you for fees charged for using an out-of-network ATM. Many institutions also provide a mobile phone app to remotely deposit paper checks.
  • If your school offers it, sign up for direct deposit as soon as possible. If your school offers direct deposit, you may be able to provide the school with your account information in order to access your funds more quickly.

If you have a specific problem with your student checking account and need to resolve it, please file a complaint. If you want to just share your experience with student checking accounts and debit cards, tell us your story and use the tag “financial aid.”

Ask CFPB if you have more questions about student checking accounts.

Share this post on Facebook and Twitter, and we look forward to hearing from you.

Your two cents on student cards and bank accounts

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College is a time when many of us signed up for our first bank account. Often schools set up agreements with financial companies to offer cards and accounts to their students. Today, some students can use their student ID card to pay for everything from washing a load of laundry to shopping online.

With credit cards, financial companies have to publicly disclose these types of agreements with schools. However, we know less about these arrangements when it comes to other things, like debit cards to access your student loan funds and student checking accounts. We’ve heard from students that sometimes these arrangements are a convenience, while other times we’ve heard that they didn’t feel they had a choice. We want to see if students are getting a good deal and what schools can do to help them through the process.

That’s why we need your help. We want to hear about your experience with financial products designed for college students.

Email us at CFPB_StudentsFedReg@cfpb.gov by March 18 to tell us about any aspect of your experience .

Today, we’re launching an initiative on student cards and bank accounts and we want your input. We’ve published a Notice and Request for Information Regarding Financial Products Marketed to Students Enrolled in Institutions of Higher Education in the Federal Register. The title might sound a little formal, but the reality is simple: we want to hear from you.

We’ll use your comments to work with school officials on ways they can make sure that schools and students are getting off on the right foot when it comes to managing their money during college. We’ll also publish a summary for everyone who contributes and let you know how you can continue to help make sure the market is working for everyone.

Tell us your two cents today, and learn more about the CFPB’s work for students.

Consumer advisory: Accessing your scholarships and student loan funds

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The Consumer Financial Protection Bureau is issuing a consumer advisory today to all students expecting to receive scholarship and student loan proceeds onto – what appears to be – a school-endorsed debit card. We are also asking consumers to tell us about their experiences getting their financial aid funds.

Yesterday, the Federal Deposit Insurance Corporation, another banking regulator the CFPB works closely with, fined one of the largest providers of campus debit cards.

Many college students, especially those enrolled in community colleges or who live off-campus, receive scholarships, grants, and student loans that are for more than the cost of their tuition. These funds help them pay rent, get to and from school, and cover other costs, like textbooks. Many schools work with third-party financial companies to disburse these funds directly to students. Consumers should remember the following:

  • You can’t be required to use a specific bank or card. There may be a financial institution that operates on your campus, but you generally can’t be required to use a specific account or card to access your student aid. If you have received a federal student loan, your school must provide a paper check or cash option.
  • Consider choosing an account before arriving at school. Shop around, and don’t feel limited by the banks operating ATMs on or near campus. Some financial institutions don’t charge you for using any ATMs, and some will automatically reimburse you for fees charged for using an out-of-network ATM. Many institutions also provide a mobile phone app to remotely deposit paper checks.
  • If your school offers it, sign up for direct deposit as soon as possible. If your school offers direct deposit, you may be able to provide the school with your account information in order to access your funds more quickly.

If you have a specific problem with your student checking account and need to resolve it, please file a complaint with CFPB. If you want to just share your experience with student checking accounts and debit cards, tell us your story and use the tag “financial aid.” We’ll also share what we learn with the Department of Education, who recently published a notice on this topic.

Ask CFPB if you have more questions about student checking accounts.

Share this post on Facebook and Twitter, and we look forward to hearing from you.