CBA Takes Umbrage with CFPB’s ‘Vague Allegations’ (Aug. 25, 2014)
The Consumer Bankers Association is taking umbrage over what it says are vague allegations by the CFPB’s private education loan ombudsman regarding agreements colleges and universities have with financial institutions to provide financial products to students. The banking association also takes issue with Ombudsman Rohit Chopra’s call for public disclosure of agreements between schools and financial institutions. The ombudsman’s letter to financial institutions, and also a blog post on the CFPB site, stated that failure to be transparent about the terms of these proprietary agreements “may pose potential consumer protection risks.”
In a letter last week to the CFPB, Richard Hunt, CBA president and CEO, wrote, “The ombudsman did not provide any basis for or evidence to support these provocative claims. On the contrary, relationships between banks and schools often provide students with great benefits by providing much needed financial literacy, safe and secure debit cards, low or no-fee checking accounts and access to convenient on-campus branches and ATMs; and students are not required to open an account.”
Hunt added that if there are any agreements that would harm consumers, it would be appropriate for the CFPB to take action; but instead, the ombudsman has “raised vague allegations and called for voluntary action with the implicit threat of supervisory action.” The CBA is asking the CFPB to address the banking association’s concerns.
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