Curbing Abusive Marketing Practices with University Student Debit Cards Act or the CAMPUS Debit Cards Act - Amends title IV (Student Assistance) the Higher Education Act of 1965 to require each institution of higher education (IHE) that enters into a preferred banking arrangement with a financial institution to:
Requires that code of conduct, at a minimum, to prohibit:
Allows specified exceptions to such prohibitions.
Requires IHEs that enroll students who receive title IV grants or loans to establish a system to disburse credit balances to students through electronic payments to a deposit account or a general-use prepaid card with the protections afforded under the Electronic Fund Transfer Act.
Directs the Secretary to conduct a pilot program giving students the option to receive credit balances through the Treasury Direct Express system or another low-cost alternative.
Amends the Consumer Financial Protection Act of 2010 to require:
Prohibits financial institutions from offering students any tangible or intangible item to induce them to apply, purchase, or obtain a financial product offered by the financial institution if the offer is made on or near the campus of an IHE or at an event sponsored by or related to an IHE.
Directs the CFPB: (1) to conduct a study on the marketing of financial products to students enrolled in IHEs, and (2) if the study finds that financial products are not marketed to IHE students in a fair manner, to issue regulations to ensure that such products are marketed in a fair manner.
Expresses the sense of Congress that financial products marketed to IHE students should be presented in a fair and neutral manner.
[Congressional Bills 113th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4714 Introduced in House (IH)]
113th CONGRESS
2d Session
H. R. 4714
To amend the Higher Education Act of 1965 to establish requirements for
preferred banking arrangements, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
May 22, 2014
Mr. George Miller of California (for himself, Ms. Waters, Mr. Welch,
Ms. Slaughter, Mr. Scott of Virginia, Mr. Cummings, Mr. Waxman, Mr.
Conyers, Mr. Tierney, Mrs. Davis of California, Mr. Grijalva, Mr.
Bishop of New York, Mr. Sablan, Ms. Wilson of Florida, Ms. Bonamici,
Mr. Pocan, Mr. Takano, Mr. Ellison, Mr. Cartwright, Ms. Clarke of New
York, Mr. Jeffries, Mr. McDermott, Mr. Nadler, Ms. Pingree of Maine,
Mr. Huffman, Mr. Thompson of California, Ms. Lee of California, Ms.
Lofgren, Ms. Chu, Mrs. Napolitano, Mr. Lowenthal, Ms. Brownley of
California, Mr. Schiff, Ms. Bass, Mr. Enyart, Ms. Norton, Ms. Shea-
Porter, Mr. Rangel, Mrs. McCarthy of New York, Mr. Butterfield, Ms.
Eshoo, Mr. Meeks, Mr. Sarbanes, Mr. Hinojosa, Mr. Farr, Ms. Matsui, Mr.
Danny K. Davis of Illinois, Ms. Schakowsky, Mr. Carson of Indiana, Ms.
Speier, Ms. Brown of Florida, Mr. Van Hollen, Mr. Honda, Mr. Clay, Mr.
DeFazio, Ms. Frankel of Florida, Ms. Fudge, Mr. Gene Green of Texas,
Mr. Yarmuth, Mr. Braley of Iowa, Mr. Rush, and Mr. Garamendi)
introduced the following bill; which was referred to the Committee on
Financial Services, and in addition to the Committee on Education and
the Workforce, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall
within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Higher Education Act of 1965 to establish requirements for
preferred banking arrangements, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Curbing Abusive Marketing Practices
with University Student Debit Cards Act'' or the ``CAMPUS Debit Cards
Act''.
SEC. 2. PREFERRED BANKING ARRANGEMENTS.
Section 487 of the Higher Education Act of 1965 (20 U.S.C. 1094) is
amended--
(1) in subsection (a), by adding at the end the following
new paragraph:
``(30) In the case of an institution that has entered into
a preferred banking arrangement, the institution will meet the
requirements of subsection (k).'';
(2) in subsection (i), by adding at the end the following
new paragraph:
``(7) Preferred banking arrangement.--
``(A) In general.--The term `preferred banking
arrangement' means an arrangement or agreement between
a financial institution and an institution of higher
education under which the institution of higher
education directly or indirectly recommends, promotes,
or endorses to its students, or requires the delivery
of funds awarded under this Act to its students
through, the deposit accounts or the general-use
prepaid cards of the financial institution or the
financial institution in general.
``(B) Financial terms.--For purposes of this
paragraph--
``(i) the terms `bank' and `savings
association' have the definition given those
terms, respectively, under section 3 of the
Federal Deposit Insurance Act (12 U.S.C. 1813);
``(ii) the term `credit union' means a
Federal credit union and a State credit union
as those terms are defined, respectively, under
section 101 of the Federal Credit Union Act (12
U.S.C. 1752);
``(iii) the term `financial institution'
means a bank, savings association, credit
union, or a person who has entered into an
agreement with a bank, savings association, or
credit union; and
``(iv) the term `general-use prepaid
card'--
``(I) means a card or other payment
code or device issued by any person
that is--
``(aa) redeemable at
multiple merchants or service
providers, or automated teller
machines;
``(bb) purchased or loaded
on a prepaid basis; and
``(cc) honored, upon
presentation, by merchants for
goods or services, or at
automated teller machines; and
``(II) does not include an
electronic promise, plastic card, or
payment code or device that is--
``(aa) used solely for
telephone services;
``(bb) a loyalty, award, or
promotional gift card, as
defined by the Secretary;
``(cc) issued in paper form
only (including for tickets and
events); or
``(dd) redeemable solely
for admission to events or
venues at a particular location
or group of affiliated
locations, which may also
include services or goods
obtainable at the event or
venue after admission or in
conjunction with admission to
such events or venues, at
specific locations affiliated
with and in geographic
proximity to the event or
venue.''; and
(3) by adding at the end the following new subsection:
``(k) Requirements for Preferred Banking Arrangement.--
``(1) In general.--An institution of higher education that
enters into a preferred banking arrangement with a financial
institution shall--
``(A) develop a code of conduct with respect to the
preferred banking arrangement with which the officers,
employees, and agents of the institution of higher
education shall comply, that--
``(i) prohibits a conflict of interest with
the responsibilities of an officer, employee,
or agent of the institution of higher education
with respect to such arrangement;
``(ii) requires each such officer,
employee, and agent to act in the best
interests of the students enrolled at the
institution of higher education in carrying out
such arrangement; and
``(iii) at a minimum, includes the
provisions described in paragraph (2);
``(B) publish such code of conduct prominently on
the website of the institution of higher education;
``(C) administer such code by, at a minimum,
requiring that all of the officers, employees, and
agents of the institution of higher education with
responsibilities with respect to the preferred banking
arrangement be annually informed of the provisions of
the code of conduct; and
``(D) provide effective enforcement of such code.
``(2) Code of conduct requirements.--The code of conduct
requirements described in this paragraph are as follows:
``(A) Ban on revenue-sharing arrangements.--
``(i) Prohibition.--The institution of
higher education shall not enter into any
revenue-sharing arrangement with any financial
institution.
``(ii) Definition.--For purposes of this
subparagraph, the term `revenue-sharing
arrangement'--
``(I) means an arrangement between
an institution of higher education and
a financial institution under which--
``(aa) a financial
institution provides deposit
accounts or general-use prepaid
cards to students attending the
institution of higher education
or to the families of such
students; and
``(bb) the institution of
higher education recommends,
promotes, utilizes, sponsors,
or otherwise endorses the
financial institution or the
deposit accounts or general-use
prepaid cards of the financial
institution and in exchange,
the financial institution pays
a fee or provides other
material benefits, including
revenue or profit sharing, to
the institution of higher
education, or an officer,
employee, or agent of the
institution of higher
education; and
``(II) does not include an
arrangement under which a financial
institution pays a fair market price to
an institution of higher education for
the advertising or marketing of the
financial institution to the general
public by the institution of higher
education.
``(B) Gift ban.--
``(i) Prohibition.--No officer, employee,
or agent of an institution of higher education
who has responsibilities with respect to a
preferred banking arrangement or has other
responsibilities with respect to a financial
institution shall solicit or accept any gift
from the financial institution.
``(ii) Definition.--In this subparagraph,
the term `gift' means any gratuity, favor,
discount, entertainment, hospitality, loan, or
other item having a monetary value of more than
a de minimus amount. The term includes a gift
of services, transportation, lodging, or meals,
whether provided in kind, by purchase of a
ticket, payment in advance, or reimbursement
after the expense has been incurred.
``(iii) Exceptions.--The term `gift' shall
not include any of the following:
``(I) Standard material,
activities, or programs on issues
related to a loan, default aversion,
default prevention, or financial
literacy, such as a brochure, a
workshop, or training, but only if such
materials, activities, or programs do
not promote a product or service of a
financial institution.
``(II) Favorable terms, conditions,
and benefits on the financial products
of the financial institution made
available to all employees of the
institution of higher education if such
terms, conditions, or benefits are
comparable to those provided to all
students of the institution of higher
education.
``(III) Entrance and exit
counseling services provided to
borrowers to meet the responsibilities
of the institution of higher education
for entrance and exit counseling as
required by subsections (b) and (l) of
section 485, as long as--
``(aa) the staff of the
institution of higher education
are in control of the
counseling (whether in person
or via electronic
capabilities); and
``(bb) such counseling does
not promote the products or
services of any specific
lender.
``(IV) Philanthropic contributions
to an institution of higher education
from a financial institution that are
unrelated to the deposit accounts or
the general-use prepaid cards of the
financial institution or the financial
institution in general or any
contribution from the financial
institution that is not made in
exchange for any advantage related to
the financial institution.
``(V) State education grants,
scholarships, or financial aid funds
administered by or on behalf of a
State.
``(iv) Rule for gifts to family members.--
For purposes of this subparagraph, a gift to a
family member of an officer, employee, or agent
of an institution of higher education, or to
any other individual based on that individual's
relationship with the officer, employee, or
agent, shall be considered a gift to the
officer, employee, or agent if--
``(I) the gift is given with the
knowledge and acquiescence of the
officer, employee, or agent; and
``(II) the officer, employee, or
agent has reason to believe the gift
was given because of the official
position of the officer, employee, or
agent.
``(C) Ban on staffing assistance.--
``(i) Prohibition.--The institution of
higher education shall not request or accept
from any financial institution any assistance
with any office or department of the
institution of higher education.
``(ii) Certain assistance permitted.--
Nothing in this paragraph shall be construed to
prohibit the institution of higher education
from requesting or accepting assistance from a
financial institution related to--
``(I) professional development
training for financial aid
administrators;
``(II) providing educational
counseling materials, financial
literacy materials, or debt management
materials to borrowers, provided that
such materials disclose to borrowers
the identification of any financial
institution that assisted in preparing
or providing such materials; or
``(III) staffing services on a
short-term, nonrecurring basis to
assist the institution of higher
education with financial aid-related
functions during emergencies, including
State-declared or federally declared
natural disasters, federally declared
national disasters, and other localized
disasters and emergencies identified by
the Secretary.
``(D) Contracting arrangements prohibited.--
``(i) In general.--Except as provided in
clause (ii), an officer, employee, or agent of
an institution of higher education who has
responsibilities with respect to a preferred
banking arrangement or has other
responsibilities with respect to a financial
institution shall not accept from any financial
institution any fee, payment, or other
financial benefit (including the opportunity to
purchase stock) as compensation for any type of
consulting arrangement or other contract to
provide services to or on behalf of the
financial institution.
``(ii) Exception.--Clause (i) shall not
prohibit an institution of higher education
from permitting an officer, employee, agent, or
contractor of a financial institution to serve
on a board of directors, or as a trustee, of
the institution of higher education, if the
institution of higher education has a written
conflict of interest policy that requires such
a board member or trustee to recuse themselves
from any decision regarding deposit or prepaid
accounts or a preferred banking arrangement at
the institution of higher education.
``(E) Interaction with students.--The institution
of higher education shall not deny or cause unnecessary
delay in the disbursement of a loan or grant under this
title based on a student's selection of a particular
financial institution.
``(F) Advisory board compensation.--An employee,
officer, or agent of an institution of higher education
who has responsibilities with respect to a preferred
banking arrangement or has other responsibilities with
respect to a financial institution, and who serves on
an advisory board, commission, or group established by
a financial institution, shall be prohibited from
receiving anything of value from the financial
institution, except that the employee may be reimbursed
for reasonable expenses incurred in serving on such
advisory board, commission, or group.''.
SEC. 3. DISBURSEMENT OF CREDIT BALANCE.
Part G of title IV of the Higher Education Act of 1965 (20 U.S.C.
1088 et seq.) is amended by adding at the end the following:
``SEC. 493E. DISBURSEMENT OF CREDIT BALANCE.
``(a) Establishment of System for Disbursement.--Not later than 3
years after the date of enactment of the CAMPUS Debit Cards Act, each
institution of higher education that enrolls a student who receives a
grant or loan under this title shall establish a system for the
disbursement of credit balances in accordance with subsection (b).
``(b) Electronic Payment System.--Each institution of higher
education described in subsection (a) shall establish a system for
disbursement of credit balances through electronic payments to a
deposit account or a general-use prepaid card (defined in section
487(i)(7)) with the protections afforded under the Electronic Fund
Transfer Act (15 U.S.C. 1693 et seq.).
``(c) Distribution Options.--The Secretary of Education, in
consultation with the Secretary of the Treasury and the Bureau of
Consumer Financial Protection, shall conduct a pilot program on
providing students with the option of receiving credit balances by
using the Treasury Direct Express system established under section 3336
of title 31, United States Code, or through any other low-cost
alternative as determined by the Secretary.
``(d) Credit Balance.--In this section, the term `credit balance'
means the amount of program funds under this title credited to a
student's ledger account at an institution of higher education that
exceed the amount assessed the student by the institution for allowable
institutional charges, as defined by the Secretary.''.
SEC. 4. PREVENTING UNFAIR AND DECEPTIVE MARKETING OF FINANCIAL PRODUCTS
TO STUDENTS OF INSTITUTIONS OF HIGHER EDUCATION.
(a) In General.--The Consumer Financial Protection Act of 2010 is
amended by inserting after section 1031 the following:
``SEC. 1031A. PREVENTING UNFAIR AND DECEPTIVE MARKETING OF FINANCIAL
PRODUCTS TO STUDENTS OF INSTITUTIONS OF HIGHER EDUCATION.
``(a) Definitions.--In this section:
``(1) Financial institution.--The term `financial
institution' means any institution that offers, provides, or
issues financial products, including banks, savings
associations, and credit unions.
``(2) Institution of higher education.--The term
`institution of higher education' has the meaning given that
term in section 102 of the Higher Education Act of 1965 (20
U.S.C. 1002).
``(b) Disclosure Required.--
``(1) Disclosure by institutions of higher education.--An
institution of higher education, or an alumni organization or
foundation affiliated with or related to an institution of
higher education, shall publicly disclose (including on the
website of such institution, organization, or foundation) any
contract or other agreement made with a financial institution
for the purpose of marketing a financial product--
``(A) in the case of a contract or agreement
entered into before the date of enactment of this
section, by not later than 90 days after such date of
enactment; and
``(B) in the case of a contract or agreement
entered into on or after such date of enactment, by not
later than 90 days after the institution, organization,
or foundation enters into the contract or agreement.
``(2) Reports by financial institutions.--
``(A) In general.--Each financial institution shall
submit an annual report to the Bureau containing the
terms and conditions of all contracts or other
agreements made with an institution of higher
education, or an alumni organization or foundation
affiliated with or related to an institution of higher
education, relating to any financial product offered to
students at such institution of higher education.
``(B) Details of report.--The report under
subparagraph (A) shall include--
``(i) any memorandum of understanding
between or among the financial institution and
an institution of higher education, alumni
organization, or foundation that directly or
indirectly relates to any aspect of any
agreement referred to in subparagraph (A) or
controls or directs any obligations or
distribution of benefits between or among any
such entities;
``(ii) the amount of any payments from the
financial institution to the institution of
higher education, alumni organization, or
foundation during the period covered by the
report, and the precise terms of any agreement
under which such amounts are determined; and
``(iii) the number of financial products
covered by any such agreement that were
originated during the period covered by the
report, and the total number of financial
products covered by the agreement that were
outstanding at the end of such period.
``(C) Aggregation of information.--The information
required to be reported under subparagraph (A) shall be
aggregated with respect to each institution of higher
education or alumni organization or foundation
affiliated with or related to such institution of
higher education.
``(D) Initial report.--The initial report required
under subparagraph (A) shall be submitted to the Bureau
not later than 1 year after the date of enactment of
this section.
``(3) Reports by bureau.--The Bureau shall submit to
Congress, and make available to the public, an annual report
that lists the information concerning the agreements submitted
to the Bureau under paragraph (2) by each financial
institution, institution of higher education, alumni
organization, or foundation.
``(4) Record repository.--The Bureau shall establish and
maintain on its publicly available website a central repository
of all contracts and other agreements contained in reports
received from financial institutions pursuant to this
paragraph, and such contracts and agreements shall be in a form
that is easily accessible and retrievable by the public.
``(c) Inducements Prohibited.--No financial institution may offer
to a student at an institution of higher education any tangible or
intangible item to induce the student to apply, purchase, or obtain a
financial product offered by the financial institution, if the offer is
made-
``(1) on the campus of an institution of higher education;
``(2) near the campus of an institution of higher
education, as determined by rule of the Bureau; or
``(3) at an event sponsored by or related to an institution
of higher education.''.
(b) Rulemaking Required.--Not later than the end of the 2-year
period beginning on the date of the enactment of this Act, the Bureau
of Consumer Financial Protection shall issue regulations identifying as
unlawful unfair, deceptive, or abusive acts or practices in connection
with any transaction with a consumer for a consumer financial product
or service, or the offering of a consumer financial product or service,
as described under section 1031 of the Consumer Financial Protection
Act of 2010 (12 U.S.C. 5531).
(c) Technical and Conforming Amendment.--The table of contents of
the Dodd-Frank Wall Street Reform and Consumer Protection Act is
amended by adding after the item relating to section 1031 the
following:
``1031A. Preventing unfair and deceptive marketing of financial
products to students of institutions of
higher education.''.
SEC. 5. STUDY OF FINANCIAL PRODUCT MARKETING.
(a) Study.--The Bureau of Consumer Financial Protection shall carry
out a study on the marketing of financial products to students enrolled
in institutions of higher education. Such study shall include an
analysis of--
(1) the extent to which financial institutions use an
institution of higher education's name, emblem, mascot, logo,
or other words, pictures, or symbols readily identified with
such institution of higher education in the marketing of
financial products, including deposit accounts, general purpose
reloadable prepaid cards, and payment services;
(2) the extent to which institutions of higher education
provide access to campus facilities and sponsored functions to
financial institutions, including orientation activities for
new and prospective students; and
(3) the extent to which agreements between financial
institutions and institutions of higher education are
accessible for inspection by students and their families.
(b) Report.--Not later than the end of the 1-year period beginning
on the date of the enactment of this Act, the Bureau shall issue a
report to the Committees on Education and the Workforce and Financial
Services of the House of Representatives and the Committees on Health,
Education, Labor, and Pensions and Banking, Housing, and Urban Affairs
of the Senate containing--
(1) all findings and determinations made in carrying out
the study required under subsection (a); and
(2) any legislative recommendations the Bureau may have.
(c) Rulemaking.--If, after conducting the study required under
subsection (a), the Bureau determines that financial products are not
marketed to students enrolled in institutions of higher education in a
fair manner, the Bureau shall issue regulations to ensure such products
are marketed in a fair manner.
SEC. 6. SENSE OF CONGRESS.
It is the sense of the Congress that financial products marketed to
students enrolled in institutions of higher education should be
presented in a fair and neutral manner.
SEC. 7. DEFINITIONS.
For purposes of this Act, the terms ``financial institution'' and
``institution of higher education'' have the meanings given the terms
in section 1031A of the Consumer Financial Protection Act of 2010, as
added by section 3 of this Act.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Financial Services, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Financial Services, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
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