Regulatory action is being proposed in the campus-banking sector, with the U.S. Department of Education releasing its first draft of regulations on campus debit cards that will effectively prohibit certain fees, constrain marketing practices and institute transparency regarding the college-card provider relationship.
Under the new regulations – specifically Issue 4 - Cash Management – campuses issuing debit cards to students for access to federal aid would not be able to assess ATM usage, account maintenance, or overdraft fees. Moreover, universities would be obligated to post their agreements with debit card providers online. Lastly, colleges would not be able to “offer a debit card, prepaid card, or access device associated with the account that bears the institution’s logo or mascot, or that otherwise implies an affiliation with the institution.”
These proposed regulations are years in the making and come on the heels of a GAO report released in February questioning campus banking relationships and how financial aid is dispersed.
Understandably, these newly proposed regulations will send shockwaves through the campus-banking landscape.
The true impact and nature of these regulations will materialize over time, but for now, a copy of Department of Education’s proposed regulations regarding Cash Management can be found here.
Stay tuned to CR80News for more developments as they happen.