WASHINGTON (2/19/14)--The efforts of a Madison, Wis, credit union to develop long-term member relationships by offering low-cost financial products to students was cited in a recent Consumer Financial Protection Bureau blog post as an example of the right way to do things.
The CFPB post also linked to that credit union's letter to the bureau, in which UW CU noted that more than 85% of accounts opened by University of Wisconsin students remained open after those accountholders graduated.
The credit union offers checking accounts, debit/ATM cards, savings accounts, online and mobile services, free credit scores, low-cost reserve lines of credit and financial education resources to students and other members.
UW CU said its strategies and business practices "demonstrate the positive contribution to student success that is possible in a partnership with a campus-based financial institution." Improving the financial well-being of student members is within the core mission of UW CU, the credit union added.
The credit union's positive work with students was noted in a broader post about the practices of some institutions that offer accounts to students.
The CFPB post also discussed the "potentially risky practice of not readily disclosing arrangements with colleges and universities to market bank accounts, prepaid cards, debit cards, and other financial products to students."
Examples of these agreements highlighted in the blog post include:
- Agreements in which a financial institution offers a licensing fee in order to use a school's logo to market its financial products;
- Agreements that provide bonus payments based on whether students sign up for a financial institution's student checking account marketed on campus; and
- Agreements in which some colleges receive discounted--or even completely free--financial services in exchange for allowing a provider to market products to students.
For the full CFPB blog post, use the resource link.