On December 16, 2015, the CFPB announced the sixth annual report to Congress on college credit card agreements, pursuant to the Credit Card Accountability, Responsibility, and Disclosure Act (“CARD Act”). In the press release, the CFPB expressed concern that while credit card agreements between financial institutions and colleges may “offer financial institutions access to a new group of consumers” and help colleges “get a share of the revenue generated from the card,” “[r]esearch shows that many of these accounts contain high or unusual fees, which can be a worse deal for students than what they can find shopping around on their own,” so more transparency is needed.
Pursuant to the CARD Act, credit card issuers are required annually to submit information about their college credit card agreements to the CFPB, according to the report. The report concludes that “most institutions of higher education do not make copies of these agreements available on their websites” or make them “available free of charge upon request.” “The general failure to disclose the agreements conflicts with the CARD Act’s clear direction to colleges and thus may violate federal law.”
In connection with this finding, the CFPB says it sent a warning letter to 17 colleges advising that they “may be in violation of Federal law” because their agreements “could not be publicly obtained using reasonable procedures and in a reasonable timeframe,” and that “simply publishing the agreement on the website is proving to be the least burdensome and most straightforward means of complying with Federal law.”
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