CFPB warns students to be wary of college accounts

This story appeared in Bank Digest.                                  

As students head back to college, the Consumer Financial Protection Bureau is advising students to be on the lookout for "official" college accounts that are attached to a campus ID or are marketed using the college's logo. According to a Bureau blog post, just because a bank, credit union, or other account provider pays a college for the right to market an account with its mascot, logo, or name, it doesn't always mean that it's the best deal for students. Students should first evaluate whether the bank account is safe and affordable.                                   

Students should particularly be aware of costly fees and risky features that can lead students to pay more than they expect. These fees can include out-of-network ATM fees, balance inquiry fees, monthly maintenance fees, or overdraft fees typically around $34 per transaction. Research has shown that even small financial shocks--a few hundred dollars--can cause significant financial hardship for many students, and even deter some students from completing their degree.