The event also featured a panel on student debt and its impact on for-profit college students, featuring Katie Buitrago of Woodstock Institute, Rohit Chopra of CFPB, Samuel Levine of the Office of the Illinois Attorney General, Eve Rips of Young Invincibles, and Hannah Moore, a graduate of the for-profit Harrington College of Design. Ms. Moore shared her experiences with accumulating and paying down high levels of student debt.
Consumer Financial Protection Bureau
Amy Rynell, Senior Director of Research & Policy at Heartland Alliance, accepted Woodstock Institute’s Community Investment Award, stating:
"Without access to easy, convenient tools to build retirement savings more people will experience a reduced quality of life in retirement, putting many at risk of poverty – straining families, communities and the state. Secure Choice will provide many of these workers with the opportunity to save and have a more stable future."
Public feedback is being sought by CFPB on "industry practices that create repayment challenges, hurdles for distressed borrowers and the economic incentives that may affect the quality of service." The public comment period opened May 14 and will run through July 13.
CFPB's probe into the matter is part of a collaboration with the U.S. education and treasury departments to "identify initiatives to strengthen student loan servicing."
Consumer advocacy groups are encouraged by CFPB's broad review into industry practices.
Today, anyone clicking on Contact Your Student Loan Servicer at ED’s student aid Website, loan servicer advice is limited to phone etiquette -- keeping “careful notes on all conversations you have" and making the suggestion that the Federal Student Aid Ombudsman Group should be contacted "only as a last resort."
With ED's web-based portal a no-show, the Consumer Financial Protection Bureau (CFPB) mounted a road show which opened in Milwaukee last week in an attempt to deal with this nagging problem.
That’s why it’s so concerning to see the onslaught of attacks against the CFPB from this Congress. Legislators have proposed a long list of bills that would defund and defang the CFPB, making it harder to take action against financial services providers that strip wealth from consumers.
Woodstock Institute will honor Chopra with a Community Investment Award on May 14.
More consumers are using prepaid cards, but the industry is still lightly regulated, meaning consumers can be hit with unexpected fees and other harmful features. In 2012, consumers loaded $65 billion onto prepaid cards with 9.2 billion transactions. Fees can occur in a variety of ways, including balance inquiries, ATM withdrawals, and customer service calls. Essentially, some consumers have to pay to manage their money and access card features.
Colleges often enter into marketing agreements with banks, which may generate revenue for the schools. According to the Government Accountability Office, at least 852 schools have agreements to provide debit or prepaid cards to their students. These marketing agreements may govern which banks and ATMs are available at convenient locations on campus, how banks can market to students, whether students can activate bank accounts using their ID cards, and how students can receive financial aid disbursements.
This letter commends the CFPB for releasing its Safe Student Accounts Scorecard, a voluntary tool to help colleges select banking partners that will benefit students. The letter recommends that the CFPB expand the list of Safe Student Account features to include low minimum balance and opening deposit requirements, rapid funds availability, a prohibition on deposit advance products, and more; ask prospective bank partners about other products they will market to students; and document the impact of the Safe Student Account scorecard.