Since 2001, TCF has been known as the “Official Bank of the MCard,” allowing students to link MCards with their TCF checking accounts and use MCards as ATM and debit cards. At least 852 colleges nationwide have similar exclusive relationships with banks. A February 2014 report by the Government Accountability Office took issue with the these relationships, noting that they often benefit schools more than students. In order to protect the financial interests of students, the University should reevaluate its relationship with TCF bank.
The GAO report found that about 11 percent of colleges and universities nationwide provided debit card services similar to TCF — these 852 colleges tend to be larger in size, encompassing 40 percent of college students. The study was conducted in response to a recent increase in the number of colleges establishing partnerships with banks. The trend spurred new concerns about fees and whether the universities provide students with adequate information about non-affiliated banks. The study found fees were not higher than average (although higher than credit unions), except for a case where a fee was placed on using a PIN instead of a signature. Neutrality was the main issue of the study. Students are often encouraged to sign up with the university’s affiliated card provider, and some universities receive payment based on the number of accounts opened or transactions made. The terms of the agreement between TCF and the University are unclear, which raises another issue the study found — contracts between colleges and card providers are not made publicly visible. GAO consequently recommended that the U.S. Congress call for card providers to publish agreements with colleges. They also suggested that colleges provide unbiased information about the partnered banks to help students make the best financial decisions for themselves.
The University’s connection with TCF provides students with easy and free access to ATM services. It has also made it convenient for students to manage their personal finances on campus. However, students are often misled or inadequately informed on the services they are receiving. At orientation, where many University students sign up with a school-sponsored TCF campus checking account, the details of agreements are often glossed over. Students are often distracted by the excitement of registering for classes and being at a new school, and this is not a conducive space for entering in to financial agreements. Students don’t realize that they may be putting themselves at risk of falling victim to hidden fees and charges that are less than clear.
The official account agreement for TCF and the account holder contains fees such as a $37 overdraft fee and a $3 fee for using non-TCF ATMs. The list of fees, provided on the TCF checking account summary, however, is not comprehensive — one section is labeled “other service fees.” This is not available on the consumer’s physical copy of what they signed. Online, one finds other fees that include a $5 statement-update fee and $35 stop-payment fee. These fees are fairly standard. However, the degree to which the University benefits from this relationship should be made public.
Students often blindly sign up for these accounts, some even believing it is just part of the MCard process. The agreement between the University and TCF raises the question of what kind of responsibility the University has to its students to provide information concerning the possible issues that surround banking with TCF. Not encouraging financial literacy, especially an understanding of the specific bank backed by the University, shows a support for the predatory nature of banks that target college students. Because it markets the bank, the University has a responsibility to provide all information concerning the bank: this includes what benefits the University receives from the partnership, an overview (independent from TCF) of how the TCF accounts work and further knowledge of how students can manage their finances on campus.