[Federal Register Volume 82, Number 88 (Tuesday, May 9, 2017)]
[Notices]
[Pages 21529-21532]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2017-09349]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF EDUCATION
RIN 1840-AD14
[Docket ID: ED-2015-OPE-0020]
Request for Information Regarding Disclosures for Student
Financial Accounts
AGENCY: Office of Postsecondary Education, Department of Education.
ACTION: Request for information.
-----------------------------------------------------------------------
SUMMARY: The Secretary seeks information from the public regarding the
major features and types of commonly assessed fees that postsecondary
institutions (institutions) must disclose under 34 CFR
668.164(d)(4)(i)(B)(2) of the cash management regulations with regard
to each of the institution's Tier 1 (T1) or Tier 2 (T2) arrangements as
defined under Sec. 668.164(e)(1) and (f)(1), respectively. The
Secretary also requests feedback regarding the proposed format of these
disclosures. The Secretary intends to use this information in
developing a notice to be published in the Federal Register describing
the format, content, and update requirements that institutions may
follow to satisfy the requirements of Sec. 668.164(d)(4)(i)(B)(2) with
respect to the major features and assessed fees associated with the T1
and T2 arrangements.
DATES: We must receive your submission no later than June 8, 2017.
ADDRESSES: Submit your comments through the Federal eRulemaking Portal
or via postal mail, commercial delivery, or hand delivery. We will not
accept comments by fax or email. To ensure that we do not receive
duplicate copies, please submit your comments only once. In addition,
please include the Docket ID at the top of your comments.
Federal eRulemaking Portal: Go to www.regulations.gov to submit
your comments electronically. Information on using Regulations.gov,
including instructions for accessing agency documents, submitting
comments, and viewing the docket is available on the site under the
``Help'' tab.
Postal Mail, Commercial Delivery, or Hand Delivery: The Department
of
[[Page 21530]]
Education (Department) strongly encourages commenters to submit their
comments electronically. However, if you mail or deliver your comments
in response to this request, address them to Ashley Higgins, U.S.
Department of Education, 400 Maryland Avenue SW., Room 6W234,
Washington, DC 20202.
Privacy Note: The Department's policy is to make all comments
received from members of the public available for public viewing in
their entirety on the Federal eRulemaking Portal at
www.regulations.gov. Therefore, commenters should be careful to include
in their comments only information that they wish to make publicly
available.
This is a request for information (RFI) only. This RFI is not a
request for proposals (RFP) or a promise to issue an RFP or a notice
inviting applications (NIA). This RFI does not commit the Department to
contract for any supply or service whatsoever. Further, the Department
is not seeking proposals and will not accept unsolicited proposals. The
Department will not pay for any information or administrative costs
that you may incur in responding to this RFI. If you do not respond to
this RFI, you may still apply for future contracts and grants. The
documents and information submitted in response to this RFI become the
property of the U.S. Government and will not be returned.
FOR FURTHER INFORMATION CONTACT: Ashley Higgins, U.S. Department of
Education, 400 Maryland Avenue SW., Room 6W234, Washington, DC 20202.
Telephone: (202) 453-6097 or by email: [email protected].
If you use a telecommunications device for the deaf or a text
telephone, call the Federal Relay Service, toll free, at 1-800-877-
8339.
SUPPLEMENTARY INFORMATION:
Background: On October 30, 2015, the Department published in the
Federal Register the Program Integrity and Improvement final
regulations (80 FR 67125). These final regulations contained provisions
governing cash management, including the establishment of new rules
regarding financial accounts marketed to students receiving title IV
program funds under the Higher Education Act of 1965, as amended (HEA).
The final regulations were intended to ensure that students have
convenient access to their title IV, HEA program funds, do not incur
unreasonable and uncommon financial account fees on their title IV, HEA
program funds, and are not led to believe they must open a particular
financial account to receive their Federal student aid.
As part of the Secretary's effort to ensure that title IV
recipients are informed but not misinformed about the terms of
financial accounts offered to them through their institution, Sec.
668.164(d)(4)(i)(B)(2) requires that prior to the student opening an
account offered by a financial account provider, institutions list and
identify the major features and commonly assessed fees associated with
each financial account offered under a T1 or T2 arrangement, as well as
the URL where the complete terms and conditions of each account may be
obtained. The regulations do not require institutions to adopt the
Secretary's format for this information once it is published in the
Federal Register, but it does state that institutions that do meet the
format, content, and update requirements in the Secretary's format will
be deemed in compliance with the requirements of the regulations, with
respect to the major features and assessed fees associated with the
account offered pursuant to the T1 or T2 arrangement.
If an institution chooses to use its own format to comply with the
disclosure requirements in Sec. 668.164(d)(4)(i)(B)(2), or a format
provided by its financial account provider, the institution must list
the major features, commonly assessed fees, and the URL where the terms
and conditions of each account may be obtained.
In the preamble of the final regulations, we committed to work with
the Consumer Financial Protection Bureau (CFPB) to ensure that the
disclosures required under Sec. 668.164(d)(4)(i)(B)(2) do not conflict
with theirs. We also assured stakeholders that, to the maximum extent
possible, the disclosures would be as similar as possible to the CFPB's
requirements to mitigate confusion and administrative burden. We
believe that the proposed format described below meets those goals.
Request for Information
After consultation with the CFPB, the Secretary seeks feedback from
the public regarding the proposed format, content, and update
requirements for the disclosures. We propose that, in cases where the
account provided is a prepaid account, as addressed in the CFPB's
notice of final rule and official interpretations for Prepaid Accounts
under the Electronic Fund Transfer Act (Regulation E) and the Truth in
Lending Act (Regulation Z) (81 FR 83934), each institution's financial
account provider can include, in the student choice menu described in
Sec. 668.164(d)(4)(i), the CFPB's appropriate short-form disclosure as
described in 81 FR 83934. If an institution offering a prepaid card
under its T1 or T2 arrangement meets the disclosure requirements
established by the CFPB in 81 FR 83934, it would be in compliance with
Sec. 668.164(d)(4)(i)(2) of the cash management final regulations.
However, because Sec. 668.164(d)(4)(i)(A)(1) requires that
institutions disclose in writing that students do not need to use a
particular account to receive their Federal student aid, institutions
using the CFPB disclosure template must also display a message, along
with the disclosure, stating that students do not need to use the
prepaid account to receive Federal student aid. We also recommend
including, along with the message, a note that directs students to ask
about other ways to receive their Federal student aid. We remind
institutions that the CFPB's short-form template was not drafted to
implement the Department's cash management regulations; accordingly,
institutions using that template should not regard it as authorizing T1
or T2 arrangements that feature imposition of any fees otherwise
prohibited under Sec. 668.164(e) or (f), as applicable.
For institutions whose financial account provider either does not
offer a prepaid account or chooses not to use the CFPB's short-form
disclosure template, we propose the following format:
[[Page 21531]]
[GRAPHIC] [TIFF OMITTED] TN09MY17.003
We propose that institutions choosing to use this form would be
required to comply with the following instructions:
The institution's disclosure must list the following fees:
Periodic fees, per purchase fees (including point-of-sale fees), ATM
withdrawal fees, cash reload fees, ATM balance inquiry fees, customer
service fees, and inactivity fees. These fees are referred to as
``static fees'' because all institutions using the Secretary's format
must list these fees on the disclosure, 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. In cases where the amount of any fee could vary,
the disclosure must show the highest amount the account provider may
charge for that fee, followed by a symbol, such as an asterisk, linked
to a statement explaining that the fee could be lower depending on how
and where the account is used. The asterisk would be included, for
example, if point-of-sale fees differ depending on whether the
cardholder is required to provide a PIN or signature. In cases where a
static fee is not imposed, the institution may demonstrate that the fee
is not applicable by placing ``N/A'' or an equivalent designation in
the appropriate field.
The disclosure must include the number of fee types the
accountholder may be charged under the specific account program,
excluding those fees that are either disclosed on the form or in close
proximity as described below.
The disclosure must also list the two additional fee
types, if any, that generated the highest revenue from accountholders
during the previous 24 months excluding static fees, any purchase
price, any activation fees, and any fee types that generated less than
five percent of the total revenue from accountholders, as well as the
amounts of such additional fees. The two additional fee types would be
determined for the specific financial account program or across
programs with the same fee schedule. Institutions must ensure that the
financial account provider reviews their fee revenue periodically and
that they assist the institution in updating the disclosure if needed.
The disclosure must include statements regarding linked
overdraft credit features, Federal Deposit Insurance Corporation/
National Credit Union Administration insurance, and a link to the terms
and conditions of the account.
The disclosure must include a written statement that
students do not have to accept the T1 or T2 account and may recommend
that students ask about other ways to receive their Federal student
aid.
In close proximity to the disclosure, though not
necessarily within the disclosure itself, the institution must disclose
the financial account provider's name, the name of the account, for T2
accounts any purchase price for the account (such as a fee for
acquiring an access device or a replacement for an access device), and
any fee for activating the account. If the financial account is a T1
account, the institution must also use this space to disclose that a
student accountholder may access his or her title IV, HEA program funds
in part and in full up to the account balance via domestic withdrawals
and transfers free
[[Page 21532]]
of charge, during the student's entire period of enrollment following
the date that such title IV, HEA program funds are deposited or
transferred to the financial account, as required under Sec.
668.164(e)(2)(v)(C). We also remind institutions that any account that
falls under the definition of a T1 account may not charge fees for
opening or activating the financial account or initially receiving or
activating an access device, nor for overdrafts or fees assessed on
point-of-sale transactions.
We request assistance from the community in evaluating the
effectiveness of the proposed format, content, and update requirements.
Specifically, the Secretary requests information on whether--
1. We have included all relevant fee information in the
disclosures;
2. The disclosures would be inappropriate for a particular type of
account;
3. Simply placing a ``$0'' or ``N/A'' in a place where no fee is
charged would suffice to convey all of the necessary information;
4. There is a preferred start date for the requirement to include
the two additional fee types that generated the highest revenue from
accountholders during the previous 24 months;
5. Any conflict exists regarding other regulatory requirements,
particularly with the proposal to allow institutions to use the CFPB
disclosures described in 81 FR 83934 for this purpose;
6. Students may find the disclosures confusing or unhelpful and, if
so, whether the commenter can suggest specific alternatives;
7. There are any other potential problems with including this
format within the student choice menu to satisfy the requirements in
Sec. 668.164(d)(4)(i)(B)(2); or
8. Opportunities exist to further streamline the format of the
template to reduce administrative burden.
Accessible Format: Individuals with disabilities can obtain this
document in an accessible format (e.g., braille, large print,
audiotape, or compact disc) on request to the program contact person
listed under FOR FURTHER INFORMATION CONTACT.
Electronic Access to This Document: The official version of this
document is the document published in the Federal Register. Free
internet access to the official edition of the Federal Register and the
Code of Federal Regulations is available via the Federal Digital System
at: www.gpo.gov/fdsys. At this site you can view this document, as well
as all other documents of this Department published in the Federal
Register, in text or Portable Document Format (PDF). To use PDF you
must have Adobe Acrobat Reader, which is available free at the site.
You may also access documents of the Department published in the
Federal Register by using the article search feature at:
www.federalregister.gov. Specifically, through the advanced search
feature at this site, you can limit your search to documents published
by the Department.
Dated: May 4, 2017.
Betsy DeVos,
Secretary of Education.
[FR Doc. 2017-09349 Filed 5-8-17; 8:45 am]
BILLING CODE 4000-01-P