WASHINGTON — The Consumer Financial Protection Bureau said Thursday that it has launched an inquiry into a wide range of banking products offered at college campuses.
The agency said the investigation would determine whether colleges and universities are partnering with banks to offer appropriate financial products to students.
"We have seen many colleges establish relationships with financial institutions to offer banking services to their students," said CFPB Director Richard Cordray in the press release. "The bureau wants to find out whether students using college-endorsed banking products are getting a good deal."
The agency is seeking information from the public, financial institutions and colleges on how student loans and cards are marketed on campus as well as the fee and agreement structures. Financial institutions were restricted from certain types of marketing on college campuses as well as required to provide tougher disclosures under the Credit CARD Act of 2009. But the CFPB's inquiry also includes student identification cards that double as debit cards, cards used to access scholarships and school-affiliated bank accounts.
The investigation coincides with the CFPB's heightened interest in both student loans and credit cards that began last year. The CFPB has been gathering information on college-focused banking products for some time to aid its supervision and enforcement of the industry.
More recently, the agency issued a guide in December on how its examiners will review private student lenders. The guide follows and annual report released in October to Congress that found high default rates and cracks in the system with student financial products. Most borrowers in the report complained of being caught off guard by loan terms, difficulty in resolving issues with servicers or even reaching servicers and failure to modify repayment terms when needed.
The inquiry Thursday amplifies the CFPB's previous investigations with in-depth questions on a wide range of banking products offered to students. The public can submit comments online until March 18.