CFPB Scolds Four Credit Unions
UPDATE: The CFPB has since revised its August 6 blog post to remove Indiana University Credit Union and Purdue Federal Credit Union from its list of financial institutions that it alleged do not disclose financial agreements with partner universities on their websites.
The CFPB named four large credit unions affiliated with universities that do not disclose financial agreements on their websites, and said they demonstrate a lack of transparency.
In the past, CFPB has pushed for banks and credit unions to publicly disclose any contracts they have with colleges and universities to market financial products to 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,” wrote Rohit Chopra, CFPB student loan ombudsman, in blog post Wednesday.
After a review of 14 schools in the Big Ten, the CFPB discovered that 13 of them have financial agreements with banking partners. Credit unions on the list included the $789 million Indiana University Credit Union in Bloomington, Ind., the $2.6 billion Michigan State University FCU in East Lansing, Mich., the $1.9 billion University of Wisconsin Credit Union in Madison, Wis., and the $824 million Purdue FCU in West Lafayette, Ind., were listed among the institutions not making contracts publicly available. The list also named eight banks and said at one school, Rutgers University, the banking partner was unknown.
“Of those 13, we were able to easily find only four contracts on the partner websites, but three of those four contracts did not contain important information, such as how much they pay schools to gain access to students in order to market and sell them financial products and services,” said the CFPB blog post.
“Information about these arrangements is already required to be disclosed when marketing credit cards and private student loans to students—these requirements were put in place after companies were found to have paid schools and school officials in order to steer students into these products,” the post also said.
The CFPB said it is alerting school administrators that their financial partner is not transparent with its student financial products.