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Washington
Legislators ask CFPB DOE to examine bankcollege cards
WASHINGTON (6/11/12)--Noting in a release that many colleges are pushing students into using campus debit cards that carry "numerous unnecessary, costly and unknown bank fees," Sen. Richard Durbin (D-Ill.) and Rep. George Miller (D-Calif.) last week urged the Department of Education and the Consumer Financial Protection Bureau (CFPB) to examine the bank-affiliated student debit card practices at more than 900 colleges and universities.

The legislators in a letter to CFPB Director Richard Cordray, Secretary of Education Arne Duncan, and Department of Education Inspector General Kathleen Tighe said they were concerned over the issues that bank/university debit card agreements could be creating for college students.

The debit cards held by many students "may come with high user fees, hidden transaction costs and insufficient consumer protections – adding to the mountain of debt many higher-education students must take on," they added. "U.S. student loan debt is reaching the $1 trillion mark, we should not allow costly and inappropriate debit card fees to add to that debt," the legislators said.

The release cited a U.S. Public Interest Research Group (PIRG) report that named PIN debit fees, balance inquiry fees, abandoned account fees, account closure fees, and prepaid debit card reloading fees among those giving students trouble.

However, PIRG in a separate release said "a well-structured debit card program can provide benefits to students."

Credit unions in many states offer the benefits of credit union membership to students through on-campus branches or college- or university-affiliated credit unions that serve students and employees of the school.
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