Funneling Students to Bank Fees?

"California State University, Sacramento, bills its OneCard as official student identification that can be used for much more," Inside Higher Ed reports

"A OneCard can be used to access campus facilities and for day-to-day financial needs, according to a Sacramento State website about the card. The website links to another site for the San Francisco-based banking giant Wells Fargo, where students can connect checking accounts at the bank to their student identification cards in order to have some bank fees waived. The site also notes that a Wells Fargo branch is 'conveniently located in the Hornet Bookstore,' with bankers on-site to answer questions.

'California State University, Sacramento and Wells Fargo have teamed up to offer you the Sacramento State OneCard, a convenient single-card solution that gives you free access to cash at Wells Fargo ATMs nationwide, as well as to make purchases using your Personal Identification Number (PIN) when linked to a Wells Fargo Everyday Checking account,' the website says.

With a few clicks -- which many students might not make -- users can find a Department of Education-mandated disclosure showing just how many bank accounts have been linked to OneCards, how much those accounts have cost students and how much Wells Fargo pays Cal State Sacramento under its Campus Card program.

The website lists 13,788 active accounts for the year ending June 30, 2017. On average, the holders of those accounts paid $47.35 for the year -- money drawn from costs like foreign ATM fees or overdraft fees. Wells Fargo paid Sacramento State $119,764, mostly in royalties, although about $25,000 went to marketing and operational support.

In other words, in one year Wells Fargo collected more than $650,000 from fees on Sacramento State-linked accounts and paid the university just under $120,000 in return.

The fees Wells Fargo charges to Sacramento State and dozens of other universities are under new scrutiny after Senator Dick Durbin last week sent a letter to Wells Fargo CEO Timothy Sloan, asking him to stop any plans the San Francisco-based bank has to expand on college campuses. Durbin, an Illinois Democrat, was concerned after two recent developments rocked Wells Fargo and called its basic business practices into question.

In February, the Federal Reserve levied harsh penalties against the bank after a string of revelations showed it had opened extra accounts in customers’ names and required some customers to take out automobile insurance deemed unnecessary. Although those scandals were not tied directly to the bank’s actions on campuses, Wells Fargo also found itself factoring heavily into a January Wall Street Journal report about the fees banks charge to students at their college partners. That report found Wells Fargo charges students many of the highest average fees among college-connected bank accounts."

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Publication Date: 3/13/2018

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