Fifteen financial institutions and third-party servicers that provide campus debit and prepaid cards to colleges and universities received letters this week from Sen. Dick Durbin (D-IL), Sen. Jack Reed (D-RI) , and Rep. Peter Welch (D-VT). The legislators expressed concern about fees associated with such accounts and called for contracts to be made public. Campus debit and prepaid card programs are defined as:
“…either debit cards associated with checking accounts or prepaid debit cards when (1) the cards are labeled or branded with the name of the college or university; (2) the cards are linked to student identification cards; or (3) the college or university has contracted with a financial institution to disburse student financial aid dollars to students through the cards.”
The letter cites a recent report from the U.S. Public Interest Research Group as its source for information on campus cards. The recipients were selected from a list within the report of entities providing such services to multiple institutions.
The companies were asked to provide a list of all colleges and universities with which they have contracts to provide debit or prepaid card services to students, along with copies of the contracts and a copy of the schedule of debit or prepaid card fees and the terms provided to students at each institution. They were also asked whether they charged certain types of fees and if they intended to revise their programs in response to the U.S. PIRG report.
Sen. Durbin had announced his interest in curbing “unreasonable practices” shortly after the U.S. PIRG report was released.