Deals between colleges and banks for co-branded financial services don't necessarily lead to better deals for students who sign up for accounts the partnerships offer, the U.S. Consumer Financial Protection Bureau said.
"College affinity products generally do not appear to have more attractive features compared to other student checking products," Rohit Chopra, assistant director and student loan ombudsman at the agency, said in a presentation in Washington, D.C., on Monday.
The bureau and U.S. lawmakers have scrutinized so-called affinity agreements between colleges and financial services providers over the possibility that students may be paying unnecessarily high fees.
A group of lawmakers including Sen. Elizabeth Warren, a Massachusetts Democrat, last week demanded that a group of banks -- including Pittsburgh-based PNC Financial Services Group Inc., U.S. Bancorp and SunTrust Banks Inc. -- produce information about their agreements with colleges to encourage students to use their products. A spokeswoman for Pittsburgh-based PNC declined comment Tuesday.
The lawmakers described payments or revenue-sharing colleges sometimes receive from the service providers as "kickbacks."
Banks say they have an interest in treating student customers well so they come back for other services, such as auto loans or mortgages, later in life. Anne Gross, vice president for regulatory affairs at the National Association of College and University Business Officers, said revenue-sharing arrangements exist with about 15 educational institutions.