Banking and Finance Law Daily Wrap Up, CREDIT, DEBIT AND GIFT CARDS—Legislators’ seek answers from banks on college debit card arrangements, (Sep 30, 2013)
Organizations Mentioned:Citigroup | Commerce Bancshares, Inc. | Higher One Holdings, Inc. | Huntington Bancshares | Huntington Bancshares Incorporated | PNC Financial Services Group | SunTrust Banks, Inc. | TCF Bank | U.S. Bancorp | US Bancorp | Wells Fargo
By Charles A. Menke, J.D.
A group of House and Senate Democrats announced they have sent letters to the nation’s largest banks seeking information relating to financial arrangements between colleges and banks that might steer financially-strapped students into fee-laden debit cards that increase the costs of college. The legislators question whether these deals, which appear to benefit banks and colleges, unnecessarily push financial aid dependent students deeper in debt.
“[R]ecent reports raise new concerns that financial institutions are once again going after college students and offering colleges financial incentives to hand over the keys to the campus,” the letter states. The reports include a recent ABC News Investigation and a 2012 report from the U.S. Public Interest Research Group.
The legislators are requesting bank executives to provide the following information:
A list of colleges where there is an agreement to enroll students in a deposit account or prepaid debit account and where marketing materials or financial instruments used to access the accounts are co-branded with a college or university logo, symbol, mascot, or name.
The number of accounts opened through agreements at the colleges, and the total fees collected from the accounts.
The total value of monetary and non-monetary remuneration provided to the colleges for the marketing of the products.
Whether any of the banks’ employees or agents have provided any monetary or non-monetary gift to an employee or agent of the colleges.
The letters were sent to Wells Fargo, US Bancorp, PNC Financial Services Group, SunTrust Banks, Inc., TCF Bank, Citigroup, Huntington Bancshares Incorporated, Commerce Bancshares, Inc., and Higher One Holdings, Inc. The letters were signed by: Rep. George Miller (D–Calif); Sen. Dick Durbin (D–Ill); Rep. Maxine Waters (D–Calif); Sen. Sherrod Brown (D–Ohio); Rep. Louise M. Slaughter (D-NY); Sen. Elizabeth Warren (D–Mass); and Rep. Peter Welch (D–Vt).
Companies: Citigroup; Commerce Bancshares, Inc.; Higher One Holdings, Inc.; Huntington Bancshares Incorporated; PNC Financial Services Group; SunTrust Banks, Inc.; TCF Bank; US Bancorp; Wells Fargo
LegislativeActivity: CreditDebitGiftCards