Request for Information Regarding Disclosures for Student Financial Accounts, 21529-21532 [2017-09349]

Agencies

• DEPARTMENT OF EDUCATION

[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]


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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.

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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

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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: Ashley.Higgins@ed.gov.
    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:

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[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