Durbin, Reed, Welch to Banks: Time to End Egregious Fees on Campus Debit Cards
Members of Congress also call on financial institutions to make public all debit card contracts with colleges and universities
[WASHINGTON, D.C.] – Assistant Senate Majority Leader Dick Durbin (D-IL), U.S. Senator Jack Reed (D-RI) and Congressman Peter Welch (D-VT) today called for an end to egregious fees – some as high as $50 – that are charged to students in some campus debit and prepaid card programs. In a letter to fifteen major financial institutions, the Members of Congress expressed serious concerns about campus card fees that often cut into students’ taxpayer-subsidized federal student financial aid and called for the public release of secret debit or prepaid card contracts between banks and institutions of higher education.
According to a report released last week from the U.S. Public Interest Research Group (U.S. PIRG) Education Fund, more than 9 million students across the country are at risk of being nickel-and-dimed with unreasonable fees because their campus debit cards may come with high user fees, hidden transaction costs and insufficient consumer protections – adding to the mountain of debt many higher-education students must take on.
“We write to express serious concerns about debit and prepaid card programs on college and university campuses,” Durbin, Reed and Welch wrote. “A recent report by the U.S. PIRG Education Fund has highlighted a number of unreasonable fees and secretive practices associated with these programs. These fees and practices are especially disturbing when they are related to the disbursement of taxpayer subsidized federal student financial aid. We owe it to our nation’s students, parents and taxpayers to ensure that campus debit and prepaid card programs are operated in a fair, transparent and reasonable manner.”
Last week, Durbin and U.S. Representative George Miller (D-CA), the senior Democrat on the House Committee on Education and the Workforce, sent letters to Education Secretary Arne Duncan, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray and Department of Education Inspector General Kathleen Tighe, urging the Department of Education and the CFPB to carefully examine the bank-affiliated student debit card practices at over 900 colleges and universities.
Durbin, Reed and Welch sent letters to the following fifteen financial institutions which were named in U.S. PIRG’s report as leading providers of campus debit and prepaid cards, asking each institution to provide information about their campus card fees and contracts within two weeks: American Express, Blackboard, Commerce Bank, ECSI, Higher One, Heartland Payment Systems, Huntington, Nelnet, PNC Bank, Sallie Mae, SunTrust, TCF Bank, TouchNet, US Bank and Wells Fargo.
[Text of the letter is attached]
Previous Article Next Article