The Washington Post this week published a story about how regulators are jumping between college students and big banks.
The article title, “Wall Street and colleges are cutting some sketchy deals. Here’s what the government’s doing about it,” is provocative, but the piece itself doesn’t make it super clear that it is talking about products such as affinity cards and a scorecard proposed by the Consumer Financial Protection Bureau.
The Safe Student Account Scoreboard calls on colleges to take a close look at the offers they’re endorsing, among other things. The bureau is accepting comments on the proposal until March.
“Colleges have already come to us looking for advice on how to ensure campus products are safe for their students,” CFPB Director Richard Cordray told the Post and other reporters on a conference call. “Many want to structure their partnerships with financial institutions to help students be successful, not bog them down with hidden fees and unwelcome surprises.
In the past, CreditUnions.com has shared best practices from credit unions that are serving that market. This is a good moment to share them again.
Purdue Federal Credit Union ($840M, West Lafayette IN), for instance, uses its relationship with the Big 10 school as a primary relationship builder with students and staff, building on the best practices it’s been using for several years to create “an affinity of one.” Read now.
When dealing with cards on campus, financial institutions would do well to be upfront and fair with student card programs. Although this article is from 2009, it explicitly outlines how to avoid the issues being aired now. Read now.
Finally, industry credit card expert Tim Kolk offers eight timeless considerations to determine if an affinity group — university-related or otherwise — is a risk worth the rewards. Read now.