March 14, 2013
Monica Jackson
Office of the Executive Secretary
Consumer Financial Protection Bureau
1700 G St., NW
Washington, DC 20552
RE: Docket No. CFPB–2013–0003
Dear Ms. Jackson:
On behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association that exclusively represents federal credit unions, I write to you regarding the Consumer Financial Protection Bureau’s (CFPB) request for information regarding financial products marketed to students enrolled in institutions of higher education.
As you are aware, credit unions are not-for-profit, member-owned financial institutions with limited fields of membership. Limited fields of membership mean that not all credit unions are capable of developing relationships with institutions of higher education. Those credit unions that can enter into mutually beneficial relationships with institutions of higher education do so responsibly and with their members’ long term interests in mind. While some credit unions may offer campus affinity products, many do not. Instead some provide online financial education modules that address financial responsibility as it relates to saving, spending, borrowing, credit cards, and establishing good credit histories.
Credit unions are generally highly regarded for providing quality financial education to their members and potential members. In addition to the not-for-profit cooperative culture, a financially educated membership helps credit unions to generally offer lower rates on loans and higher savings rates than other financial institutions because such membership defaults and risk rates are correspondingly lower than other financial institutions.
Credit unions take extra measures to ensure that their members are financially educated, and are receiving information that will help them accomplish their individual goals. Many members of credit unions receive financial education that is specific to their individual needs, not only enhancing the financial knowledge of the individual but also helping to establish relationships that allow the credit union to become familiar with members’ individual needs and financial literacy. In many instances, the credit union is able to provide individually-tailored education.
Credit unions develop and market products specifically to best suit the needs of their members. For students and those involved with institutions of higher education, credit unions offer helpful products such as no-fee student checking accounts, free online banking, electronic alerts via text and email, personalized financial education classes, and teen accounts where parents or other family members can co-sign for checking and savings accounts. These products coupled with responsible financial education allows college-aged members to start their financial futures off on the right foot.
NAFCU and our members understand the importance of providing member-tailored products, financial resources, and responsible financial education for its college-aged members. NAFCU appreciates the opportunity to comment. Should you have any questions, please feel free to contact me at PJHoffman@nafcu.org or (703) 842-2212.
Sincerely,
PJ Hoffman
Regulatory Affairs Counsel
National Association of Federal Credit Unions