As part of its ongoing effort to better protect consumers of all ages from potentially unfair or misleading accounts that can land them in money trouble, one federal watchdog is now collecting data related to financial products specifically for young adults.
The Consumer Financial Protection Bureau recently began asking college students to provide it with information related to the kinds of bank accounts and credit cards that are specifically targeted for their age group, in an effort to better understand the kinds of financial decisions and situations young adults face in their everyday lives, according to a report from the agency. While there have been many regulations put into place to better protect younger consumers who might be getting their first taste of financial independence in particular, the agency feels it needs to examine just how these accounts are working under the new regulatory microscope.
In addition, the rise of a new type of account that can impact students financially is also being considered, the report said. Today, many colleges allow young adults to load money onto their student ID cards so that they can be used just like debit cards, but the agency believes that some participants in these programs may not fully understand the implications associated with them. For instance, some schools tie student ID accounts to not only reloadable funds, but also student loan financing, and allow them to be used to pay for anything from campus services to online shopping.
As such, the CFPB encourages students to email it before March 18 to talk about these types of accounts in particular, in an effort to get a new initiative off the ground, the report said. Through the comments it receives from college students, regulators will be able to form opinions about the functions these accounts play in students’ lives, and in turn use that information to work with colleges and universities across the country to formulate stronger protections if they feel they’re necessary. Once the initiative is complete, the agency will also publish a summary to fully explain its findings.
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The CFPB has worked hard in the past several months to significantly overhaul protections for financial products offered by nonbank institutions, for everything related to mortgages and other types of financing to services related to products that are popular among consumers, including student loans.