7 Principles for a Well-Structured School-Bank Partnership
- Unbiased student choice of where to bank. The bank account students begin at school may continue with them for decades. Such an important choice shouldn’t be skewed by which bank gave the school the most money. For financial aid disbursements, campuses should provide students a diverse set of disbursement options that clearly include the ability to use their own existing bank account and ability to choose to receive a check.
- Low fees. Campuses should negotiate away fees that students incur on their debit cards as well as make it easier for student debit card consumers to avoid fees. Fees should not be charged to financial aid funds.
- Safe checking fees. For accounts not related to federal student aid, student checking accounts should meet the minimum requirements of the FDIC Model Safe Accounts Template, modified to address the needs of students. Fees on student accounts should be commensurate with services rendered and all fees should be disclosed prominently on the bank’s website, mailers and other materials.
- Unrestricted access to funds. Campuses should provide, and regulators should require, an adequate number of regularly replenished on-campus ATMs for financial aid disbursement. ATM deployment measurements should be based on need during peak-use times, such as the beginning of a semester or quarter.
- Strong consumer protections. Given the public’s perception that a debit card is a debit card (whether or not it is prepaid), colleges should insist that all campus debit cards carry the same level of consumer protections extended to ATM debit card customers under the Electronic Funds Transfer Act.
- No push marketing. The marketing surrounding these cards may result in a student being pushed into a product or an agreement that isn’t best suited for his or her needs. Given that the campus debit card has already been chosen by the college, providing an implicit endorsement, there must be strong rules in place to avoid push marketing.
- No conflict of interest. Many schools engaged in partnerships with banks or financial firms can receive large financial incentives, which at least create the appearance of a conflict of interest. Contracts should be disclosed so that the public knows that the school chose the debit card program that gives students the best deal rather than the one that gave the college the most money. —Source: U.S. PIRG