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On July 3, the Department of Education announced that it had finalized the format for fee disclosures for accounts offered to students under Tier One (T1) and Tier Two (T2) banking arrangements.

ED had published a Request For Information (RFI) on May 8 seeking feedback on the format for the disclosures that institutions then had to post by July 1. Recognizing that finalizing and implementing a disclosure format on such a tight timeline would be difficult, NACUBO—and other commenters—asked for a delay in the effective date. As a result, in addition to refining the model disclosure format, ED extended the date for this provision to January 1, 2018.

Institutions are free to make these disclosures in any format they choose, though ED's model format provides a "safe harbor." The regulations at §668.164(d)(4)(i)(B) indicate that if an institution "follows the format, content, and update requirements specified by the Secretary in a notice published in the Federal Register following consultation with the Bureau of Consumer Financial Protection, it will be in compliance" with the requirements on major features and fees associated with these accounts.

Still, schools may wish to use the format developed by the Pew Charitable Trusts, or others, for bank accounts. "Nothing in the format set forth in this document prevents institutions from using these types of disclosures if they wish. However, institutions that choose to use Pew's format must ensure that they comply with the additional specific requirements for accounts offered under T1 and T2 arrangements," ED's announcement states.

Institutions must list the following "static fees" in their disclosures (even if the amount of the fee is zero or the fee relates to a feature that is not offered as part of the specific account):

  • Periodic fees.
  • Per-purchase fees (including point-of-sale fees).
  • ATM withdrawal fees.
  • Cash reload fees.
  • Overdraft fees.
  • ATM balance inquiry fees, customer service fees.
  • Inactivity fees.

Schools will be required to provide additional information beyond the static fees, such as purchase price, activation fees, and the two additional fee types (if any) that generated the highest revenue from account holders during the previous two years. For a full list of the disclosure requirements, institutions with T1 and T2 arrangements should carefully review ED's announcement.


Bryan Dickson

Director, Student Financial Services and Educational Programs


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