The Consumer Financial Protection Bureau, created under the 2010 Dodd-Frank reform law, will take a comprehensive look at the relationship between universities and banks. Observers say it is likely to result in new regulations and restrictions on certain practices.
"There are big deals made between universities and banks, and we think it's worth understanding how our students are essentially entering the financial services market that might continue far after they graduate," said Rohit Chopra, student loan ombudsman for the CFPB.
"For years, colleges have partnered with financial institutions under the premise that it should be easy for students to gain access to bank accounts or credit on campus," writes American Banker's Rachel Witkowski.
Shady marketing tactics and hidden fees have resulted in the bureau looking further than just student loans. The CFPB started a massive data-gathering effort last week which could cause the agency to change financial disclosures to students and restrict certain kickbacks that schools may receive for partnering with a bank.
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