Waters Takes Action to Protect Students from Predatory Debit Card Accounts
In the midst of graduation season Waters, the Ranking Member of the Financial Services Committee, has joined with lawmakers in the
Specifically, the measure seeks to end financial arrangements between colleges and banks that steer financially-strapped students into fee-laden debit cards that increase the costs of college significantly. It does so by ending conflicts of interest and kickbacks between financial institutions and schools, providing much-needed transparency over campus-sponsored financial products and preserving the integrity of federal student aid programs.
"Our nation's next generation of leaders is already burdened with excessive education debt, making it harder for them to contribute to our economy and society," said Waters. "Predatory practices that increase the already exorbitant cost of college are not reflective of our national priorities. This legislation would ensure students, many already drowning in debt, can no longer fall victim to unscrupulous practices that drain important federal financial aid through hidden charges, increased fees and other predatory behavior."
Banks and financial institutions have long sought to forge partnerships with colleges and universities as a way to gain access to young consumers. However, in order to access this lucrative market, some banks use tactics such as financial payouts to colleges that recommend specific financial products. Recent investigations into campus banking have revealed that too often, many banks and financial firms are using questionable methods to steer students into accounts that are endorsed by their college, and carry high fees. In some cases, this leads students to be guided into needlessly expensive accounts that end up chipping away at their federal student aid and making college more expensive-while schools receive multi-million dollar kickbacks from the banks.
The House bill, entitled Curbing Abusive Marketing Practices with University Student Debit Cards Act (CAMPUS Debit Cards Act) would extend protections previously enacted by
Waters joined Representative
The legislation is supported by many consumer advocacy and student organizations, including the
A summary of the legislation is available here http://democrats.financialservices.house.gov/FinancialSvcsDemMedia/file/006 %20Maxine%20Waters%201%20pagers/Deceptivge%20Marketing%20Cleaning%20Up%20Cam pus%20Banking%20doc.pdf.
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