WASHINGTON — The Federal Deposit Insurance Corp. announced settlements Wednesday with student banking business Higher One of New Haven, Conn., and WEX Bank of Midvale, Utah, for deceptive practices in the marketing of college and university debit accounts.
The FDIC found that Higher One failed to include certain fees and terms of service related to its OneAccount product and debit card in disclosures approved by its partner WEX Bank. Higher One and the bank have agreed to pay $2.23 million and $1.75 million in civil money penalties, respectively, and have been ordered to pay $31 million in restitution to 900,000 students.
"It is important that financial products offered to college students under the sponsorship of their universities are clear, transparent, and trustworthy," FDIC Chairman Martin J. Gruenberg said in a press release. "Today's action holds both the bank and its student card partner accountable for the practices related to the products they offered to college students and provides restitution to those students harmed by these practices."