CFPB Takes Campuses to Task for Secret Credit Card... - Other News

Advertising Disclosure is an independent, advertising-supported web site. receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Other » CFPB Takes Campuses to Task for Secret Credit Card Contracts

CFPB Takes Campuses to Task for Secret Credit Card Contracts

Add to Favorites:
CFPB Takes Campuses to Task for Secret Credit Card Contracts

When students apply for a school-sponsored credit card they may think they don’t have to read the fine print, but that might not always be the case. The Consumer Financial Protection Bureau (CFPB) has sent 17 colleges warning letters telling them to upgrade their disclosure protocols.

Why? During an investigation they found that they were not making marketing agreements available to students or the public even when asked. Schools are required to do so by the CARD Act.

“History tells us that when schools and financial institutions get together behind closed doors, students can pay a steep price,” said CFPB Director Richard Cordray. “The Bureau will continue to promote and enforce transparency across this market and stands ready to see that schools do the right thing on behalf of their students.”

The findings

The CFPB is mandated to give Congress a report each year about college credit card agreements, looking at the schools marketing partnerships with issuers, and whether or not they are being transparent in their dealings. While researching they looked at a sampling made up of 25 of the largest schools who work with issuers to offer students payment cards. During their research found several issues including:

• Four out of five colleges were not disclosing on their website that they had marketing contracts with issuers
• Over two-thirds were not giving access to agreements when they were asked to do so. upon request

The schools who did not provide the information are the ones that receiving the warnings.

Over 10 million college students are registered at schools that have deals with card issuers. These schools either help with or allow the promotion of payment cards. They often carry the school logo, and sometimes are even linked to their school ID.

When partnering up with issuers the schools may receive a share of the revenues, but research has shown that these cards often come along with higher fees than normal or unusual fees not found with other cards. In these cases, students would be better off with credit, debit and prepaid cards that they found on their own rather than going with school-branded and sponsored ones.

CFPB helping colleges do right by students

The agency has also created the Safe Student Account Toolkit, designed to assist these schools with choosing payment cards that have the students’ best interests at heart, and do not include hidden fees.

All credit cards terms, fees and rates mentioned in this article/post are actual on the posting date. See the current products’ Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

CARD Act Saves Americans Over $16 Billion in Credit Card Fees
CARD Act Saves Americans Over $16 Billion in Credit Card Fees

Posted: December 09, 2015

Legislation enacted by Congress in the spring of 2009 has saved consumers more than $16 billion in credit card fees over the past six years. Continue reading
Samsung Pay at Fifth Third Bank
Samsung Pay at Fifth Third Bank

Posted: June 30, 2016

Customers of Fifth Third Bank who have seen the Samsung Pay commercials showing how it can be used to make payments at virtually any kind of payment terminal, may have been wishing they could use the mobile wallet too. Continue reading
EMV Credit Card Deadline Finds People Unprepared
EMV Credit Card Deadline Finds People Unprepared

Posted: September 30, 2015

Starting tomorrow, merchants are supposed to be ready to accept EMV payments from consumers—or face the possible consequences, which could mean picking up the tab. Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
We'll match all the Miles you've earned at the end of your first year. For example, if you earn 30,000 Miles, you get 60,000 Miles.
For Excellent, Good Credit
You could turn $150 into $300 with Cashback Match™. Get a dollar-for-dollar match of all the cash back you've earned at the end of your first year, automatically.
For Excellent, Good Credit
No Annual Fee. See WebBank/Fingerhut Credit Account Terms.
For Bad Credit