On August 8, the Consumer Financial Protection Bureau admitted to the falsity of its August 6 allegations that two Midwestern credit unions marketed products and services to university students without adequately disclosing the deals’ terms. As it turned out, the credit unions had no agreements with the universities and were mistakenly targeted by the CFPB’s student loan ombudsman, Rohit Chopra.
Chopra had recently published a blog post that listed four credit unions along with ten banks that allegedly did not disclose the terms of contracts under which they would market and sell financial products to their partner university’s students. The four listed were the Indiana University Credit Union, Michigan State University Federal Credit Union, Purdue Federal Credit Union, and the University of Wisconsin Credit Union. Yet, Indiana University Credit Union and Purdue Federal Credit Union were erroneously added to the list – they had no marketing agreements with the schools. Purdue University students, along with students from local community colleges, could join the credit union and, provided they could prove their ability to repay, apply for and obtain a credit card, but the credit union did not market the card or any of its other services specifically to students.
According to Purdue FCU President/CEO Bob Falk, an erroneously interpreted payment card image was all it took to get it added to the list. “We don’t have any agreement with the university to market cards to students – or any other financial services,” Falk said in an interview with Credit Union Times. “We have an agreement with the Purdue Alumni Association to issue and market a credit card,” Falk added, “but as part of that agreement, we are not allowed to market the card to students. We get no lists of student names nor are we allowed to market to them through advertising.”
The CFBP has since amended the blog to remove the credit unions’ names.