Oregon Student Debit Card Bill Passes House

May 5, 2015, Written By Lynn Oldshue
Student showing his card to camera at the atm in college

A new bill aiming to regulate student debit cards has made its way through the Oregon House and is now headed to the state Senate. HB 2832 is designed to set up federal guidelines for colleges and universities that sign up for contracts with third-party financial institutions.

The bill passed the House by a vote of 36-24.

There are federal rules in place for college credit cards, but debit cards from universities are not nearly as regulated as those from traditional banks and credit unions. Due to that loophole, debit card issuers can charge fees for PIN transactions, in-network ATM withdrawals and even a lack of activity on the account. That’s right–students can be charged for not using their cards.

“Students often believe these debit cards are the only way to receive financial aid to cover books and living expenses,” Representative Nancy Nathanson, one of the representatives who proposed the bill, told the Statesman Journal. “Cards often carry the school logo or may be linked to a student ID. This may give the impression that the card is official or required for distribution of financial funds.”

Rep. Mark Johnson, a Republican from Hood River, voted against the bill because of the way it was written.

“The inadvertent consequence here could be that putting some of these restrictions upon these third party financial firms that currently do this because the colleges and universities don’t want to do it, because it would be expensive for them, it may lead to some of these financial firms simply walking away from a college or university and say ‘thanks, but no thanks. It doesn’t pencil out any more.'”

In 2009, the Consumer Financial Protection Bureau set up regulations for disclosures with college-branded credit cards. The goal was to create a sense of transparency so students knew what they would receive in terms of rates and fees.

Some universities and alumni associations were getting payments as high as $2.8 million. But since the regulations were put in place, college credit card agreements have dropped by 70%.

The information contained within this article was accurate as of May 5, 2015. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.