A spin of the prize wheel, a free T-shirt, a nifty mobile app, a convenient location, a better interest rate; college students choose where to bank for any number of reasons. Some universities help students make the decision by offering school-sponsored accounts.
At the end of January, the Consumer Financial Protection Bureau (CFPB) solicited input from college students, financial institutions and university administrators about how financial products are marketed to students. The survey will help the CFPB determine whether current programs serve the interests of students.
CFPB director Richard Cordray said, “The Bureau wants to find out whether students using college-endorsed banking products are getting a good deal.”
Since Congress passed the Credit CARD Act in 2009 in an effort to curb predatory lending practices on college campuses, credit card issuers must fully disclose partnership agreements where affinity credit cards are offered on college campuses. The CFPB reported to Congress last October a 24 percent decrease in the number of these credit card agreements after the CARD Act.
The CFPB is now looking for information where the disclosure law does not apply — in other banking products like debit cards. The CFPB’s request asked for ideas of “how partnerships between institutions of higher education … and financial institutions might be structured to promote positive financial decision-making among young consumers.”
Although checks issued by Brigham Young University can be cashed at any Wells Fargo, including the one inside the BYU Bookstore, BYU financial services has no partnership like those the CFPB described. Still, BYU students and parents can contribute to the CFPB’s study until March 18 by commenting on the products and marketing approaches they encounter or would like to see.
UVU, on the other hand, offers a student bank account similar to what the CFPB described. UVU students can obtain a normal student ID card or an optional PlusCard, which serves as a Utah Community Credit Union (UCCU) debit card and UTA bus pass.
Richard Hirst, marketing manager for UCCU, claimed that UCCU has “one of the most open and inexpensive — it’s completely free — programs out there for college students.” Part of the swipe-fee proceeds that VISA disperses to UCCU is passed on to the university, and UCCU offers students incentives such as free ATM transactions and two overdraft forgiveness “Oops” cards.
This month marks five years since UVU and UCCU made this exclusive partnership. According to Hirst, the PlusCard is the only UVU-exclusive product his company offers, but students who come from Campus Connection for their student ID can also take care of any other financial needs at the full-service campus branch.
“At that time, we make sure they get their PlusCard, of course, and we typically set them up with online banking,” Hirst said. “Part of our agreement with the university is that we don’t push loans.” None of the materials about PlusCard reference additional UCCU credit products.