CFPB Eyes the Big Ten (Aug. 11, 2014)
The CFPB is focusing on universities in the Big Ten Conference to see if these schools, some of the largest in the U.S., have appropriately disclosed their agreements with financial institutions regarding the financial products they offer their students. “Making these agreements available for all financial products shows schools’ and companies’ commitment to transparency, helping students and their families understand basic information about these products before you sign up,” Rohit Chopra, the CFPB’s student loan ombudsman, wrote last week in a blog post on the bureau’s Website last week.
The blog examined all 14 of the Big Ten schools, noting that 11 have banking partners to market financial products to students. The CFPB was able to easily find four contracts on the partner financial institutions’ Websites, but three of those financial institution Websites did not include important information, such as how much the financial institution pays the school to access students to market and sell financial products and services.
The NBPCA suggests the bureau’s focus on the Big Ten is linked to Title IV financial aid disbursements being considered by the U.S. Department of Education.
“This CFPB blog is inextricably tied to the DOE discussion, because this transparency issue was discussed among [members of] the DOE and the CFPB attended that discussion,” Brian Tate, NBPCA director of government relations, tells Paybefore. The DOE is considering a plan that would regulate how universities disburse Title IV financial aid disbursements.
“A CFPB representative was present during the [DOE’s] negotiated rulemaking, so although the CFPB was not at the formal table, it was represented in the room and following the discussion,” Tate says, adding that Chopra spoke at the negotiated rulemaking session.
Tate also finds it “interesting” that the CFPB would focus on the Big Ten. “I know some schools from the Big Ten have raised concerns about the DOE proposal,” he says. “It’s not by accident the CFPB is looking at the Big Ten.”
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