Breaking News – CFPB: Expand CARD Act Disclosure Requirements to Include Prepaid Card Marketing Agreements
In a recent press release, the CFPB called on financial institutions to “voluntarily” disclose to the public its financial product marketing agreements made with colleges and universities. While the CARD Act requires financial institutions to make such disclosures regarding the marketing of credit cards, the CFPB’s alert aims to expand the scope of these disclosures to cover deposit accounts, prepaid cards, debit cards and other financial products.
According to the CFPB, clear and conspicuous disclosure of financial arrangements between banks and institutions of higher education will increase transparency and improve public confidence that such arrangement is intended to help, and not hurt, a student’s financial future. The CFPB warns that not publicly disclosing the agreements on a financial institution’s Website “raises potential consumer protection risks,” and further cautions that the bureau will be contacting banks in 2014 to “find out more about their commitment to transparency.”
In conjunction with the CFPB’s announcement, the bureau also released its annual report on college credit card agreements, which showed a 23 percent decline in college agreements from 2011 to 2012. The report matched the CFPB’s previous findings that financial product marketing partnerships with higher institutions are shifting away from credit cards.
