WASHINGTON (7/6/15)--The U.S. Department of Education (ED) should employ a more targeted approach to its proposed changes to cash management rules, CUNA believes, since credit unions are among the most consumer-friendly institutions around.
In a comment letter filed to the Department of Education last week, CUNA cautioned that the agency’s proposal may have unintended consequences for credit unions.
“We believe it is critical that ED employ a more targeted approach than the proposal would provide,” the letter reads. “ED’s attention should focus on the handful of companies that have been the source of the majority of anti-consumer behavior."
The agency’s proposal would revise its Title IV Higher Education Act (HEA) cash management rules. This includes significant new restrictions on financial products used to disburse credit balance funds to students. The balances result when HEA program funds credited to a student’s account exceed the amount of tuition and other allowed charges.
The proposal comes after a negotiated rulemaking process that included credit union representation. Negotiated rulemaking allows an agency to invite members of interested groups to meetings where an attempt is made for consensus on the proposed rule.
A consensus was not reached on the ED proposal, but CUNA requested the agency should incorporate a number of points raised by credit unions during the process into any final rule.
CUNA also requested an implementation of at least one year between the publication of the final rule and mandatory compliance.