CFPB report shows college-promoted bank accounts rip students off
Very few people actually like their bank, which is quite likely to be the same bank they've had since college. This chart shows why that isn't going to change anytime soon.
The big picture: A CFPB report — written earlier this year and finally made public last week after Allied Progress obtained it through a Freedom of Information Act request — studies the fees levied by bank accounts held by college students. Roughly a third of them now attend schools where a single bank or credit union pays the college a fee to promote its products. If you attend a college that accepts such a deal, your average annual fee is $36.52, more than three times the average fee for students at colleges that don't accept paid account promotion.
- At one college with a paid-promotional deal, the average fee exceeded $90 per year.
- Wells Fargo had the highest average fee, of $46.99 per year.
- Not all banks that paid colleges to promote their products had high fees. Fifth Third Bank had an average annual fee of $0.
Why it matters: Seth Frotman, the CFPB's former student loan ombudsman, resigned after this report was suppressed. In his resignation letter, he accused Mick Mulvaney, the CFPB's acting head (and Donald Trump's new acting chief of staff), of serving the wishes of America's most powerful institutions. Those banks, he said, were "ripping off students on campuses across the country by saddling them with legally dubious account fees." Now, we can see for ourselves what he was talking about.