A recent proposal by the Department of Education would severely harm banks’ ability to serve students, limiting student access to traditional banking services, according to the American Bankers Association’s statement for the record
before the Senate Banking Committee today.
The DoE’s proposal would impose significant requirements and restrictions on bank accounts of students and parents eligible for student aid, with stricter requirements for accounts where the educational institution allows students or parents to elect to have funds directly deposited. These requirements and associated regulatory burden add costs that will ensure few – if any – of these accounts will be offered.
“Make no mistake: It is students who will bear the brunt of the Department of Education’s rulemaking,” ABA’s statement said. “Students will find it harder to secure affordable, convenient bank accounts and services tailored to their needs, often including an on-campus presence. Students who come from families that do not have a bank account or any banking relationship will struggle with how to go about even opening an account. Without these options, many students will be compelled to turn to loosely regulated, less secure, less convenient and more costly options.”
to read the full statement.
The American Bankers Association is the voice of the nation’s $14 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $11 trillion in deposits and extend nearly $8 trillion in loans.
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