The Consumer Financial Protection Bureau on Wednesday sent letters to a dozen universities criticizing them for not fully disclosing the arrangements they have with companies to market financial products on their campuses. “We wanted to alert you that this failure to be transparent may pose potential consumer protection risks,” the bureau’s student loan ombudsman, Rohit Chopra, wrote in a letter to twelve Big Ten universities.
The bureau said it looked for the agreements between financial institutions and all Big Ten universities, which represent some of the largest institutions in the country. Of the 13 universities that had contracts with financial institutions to offer products on campus, only one was fully disclosed to the public, Chopra wrote in a new blog post Wednesday.
The CFPB has been probing campus debit cards since last year. Officials at the bureau have said they are concerned that arrangements between colleges and financial institutions to provide debit cards are insufficiently transparent and may have incentives that harm students.
The bureau previously called on financial institutions to disclose the terms of the arrangement, warning companies that it may consider their failure to make public such agreements the type of risky practice that triggers more scrutiny from regulators.
The Education Department is currently in the process of crafting new rules to more tightly regulate campus financial products. The department suggested during rulemaking negotiations earlier this year that it wanted to include a requirement that colleges disclose the agreements they have with banks and other companies to offer debit cards. Federal law already requires such disclosure for credit cards that are affiliated with universities.