Opinion
$11 Million Settlement for Students
“Challenging People to Shape
a Better Future Now”
B ERNIE F OSTER
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B OBBIE D ORE F OSTER
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T ED B ANKS
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H ELEN S ILVIS
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M ONICA J. F OSTER
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J ULIE K EEFE
S USAN F RIED
Photographers
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A
s millions of college stu-
dents return to campus, a
recent settlement by the
Federal Deposit Insurance Corpo-
ration (FDIC) may become a
financial blessing to students and
their parents. An estimated 60,000
students are expected to share $11
million in restitution from two
financial firms – Higher One
Holdings, Inc. and Bancorp Bank.
According to FDIC, beginning
in July 2008, the firms charged
multiple nonsufficient fund (NSF)
fees from a single merchant trans-
action. By allowing student
accounts to remain overdrawn for
long periods of time, the firms
were able to collect more NSF fees
while also charging more fees for
subsequent deposits to student
accounts.
Most importantly, these prac-
tices exposed an often hidden role
that financial institutions have on
college campuses. As student
monies were eaten up by these
fees, the remaining available funds
diminished the availability of
monies intended for tuition and
other student expenses.
FDIC held that Bancorp Bank,
based in Wilmington, Del. was
responsible to ensure that Higher
One operated the OneAccount
program in compliance with all
applicable laws. Unfair or decep-
tive acts or practices are violations
of the Federal Trade Commission
Act.
According to the U.S. Public
Interest Research Group (PIRG),
Higher One has card agreements
with 520 campuses that enroll 4.3
R ESPONSIBLE
L ENDING
Charlene
Crowell
million students. Commenting on
the settlement announcement,
Rich Williams, higher education
advocate for U.S. PIRG said, “We
commend the FDIC for holding
Higher One accountable. Student
aid should not be a piggy bank for
banks to dip into especially when
icant fees that are charged against
their student aid, including per-
swipe fees of 50 cents, inactivity
fees of $10 or more after six
months and overdraft fees of up to
$38. Financial institutions use
aggressive marketing to maximize
these fees, the report found.
The FDIC settlement will also
require the two firms to pay a
combined $282,000 in civil penal-
ties. In addition, should Higher
One fail to fully repay the $11 mil-
lion in restitution, Bancorp Bank
will be financially responsible for
restitution payment. Higher One
expects to pay credits on current
and charged-off accounts. Closed
‘Student aid should not be a piggy
bank for banks to dip into especially
when their practices are unfair or
deceptive’
— Rich Williams, U.S. PIRG
their practices are unfair or decep-
tive.”
In May, U.S. PIRG released
“The Campus Debit Card Trap,” a
report that found banks and finan-
cial firms now control or influence
federal financial aid disbursement
to more than 9 million students by
linking checking accounts and
prepaid debit cards to student IDs
and providing financial aid dis-
bursement services. According to
the report, students can pay signif-
accounts are expected to be paid
by check.
Additionally, the settlement
orders multiple changes to prac-
tices by the two financial firms.
Higher One has agreed to:
—Not charge NSF fees to
accounts that have been in a con-
tinuous negative balance for more
than 60 days;
—Not charge more than three
NSF fees on any single day to a
single account;
—Not charge more than one
NSF fee with respect to a single
automated clearing house transac-
tion that is returned unpaid within
any 21-day period;
—Refrain from misleading or
deceptive representations or omis-
sions in its marketing materials
and/or disclosures; and
—Institute a sound compliance
management system.
Similarly, Bancorp Bank is now
required to:
—Correct all violations;
—Significantly increase its
management of third-party risk;
—Increase board oversight of all
compliance matters; and
—Improve its compliance man-
agement system.
In the aftermath of the Great
Depression, Congress created the
FDIC in 1933 to restore public
confidence in the nation’s banking
system. The FDIC insures deposits
at 7,309 banks and savings associ-
ations across the country.
Today, a series of recent enforce-
ment actions in financial services
are giving hope to consumers: the
Consumer Financial Protection
Bureau’s recent $140 million
action against Capital One, the
Department of Justice’s $175 mil-
lion action against Wells Fargo
and the newest FDIC $11 million
settlement signal that regulators
are heeding the concerns of con-
sumers.
Charlene Crowell is a communi-
cations manager with the Center
for Responsible Lending.
I Wanted a Good Education for My Kids
A
s a parent, what lengths
would you take to ensure
that your child had an
opportunity to achieve the Ameri-
can Dream?
If you love your child as much
as I love my two daughters, the
limits to your sacrifice are endless.
Marian Wright Edelman once
said, “Education is a precondition
to survival in America today.” I
believe this to be true. Despite my
family’s socio-economic status, I
knew that a quality education
would blaze a trail to a better life
for my daughters and allow them
to reach their God-given potential.
I am an ex-felon. However, I did
not burglarize or assault anyone. I
did not rape or steal. I was con-
victed for falsifying records about
my residency so that my daughters
could attend a safer, higher-per-
forming suburban school.
Sadly, wanting the best for my
children earned me nine days in
prison, 80 hours of community
service, and two years of proba-
tion.
Each night I spent in my jail cell,
I prayed for my daughters and
spent countless hours thinking
about other parents and guardians
like me. Parents that were helpless
– recognizing that their child
deserved a better education than
what was being provided, but no
rational options to attain it. I
thought about families like mine,
who did not have room in their
tight budgets to pay for private
education, nor afford the high
property values of suburban dis-
tricts. What are they to do?
Page 4 The Portland Skanner August 22, 2012
NNPA G UEST C OLUMNIST
Kelley Williams-Bolar
My nightmare was further evi-
dence that education is the civil
rights issue of our generation.
And, like most rights, our coun-
try’s most vulnerable communities
are left behind.
In an effort to help families
avoid the fate that befell to me, I
increasing pressure on districts
and others in charge of failing
schools. By granting this power to
parents, low-performing schools
can now be held accountable to the
needs of the students, families, and
communities they serve.
Think about it.
It is natural for parents to put the
interests of their children above
interests of the school system.
Moreover, the more power parents
can exercise over their children’s
Sadly, wanting the best for my children
earned me nine days in prison, 80
hours of community service, and two
years of probation
founded the Ohio Parents Union,
an organization tasked with
empowering parents throughout
the state and providing families
with resources to effectively advo-
cate for the rights of their children.
No longer should parents with
children trapped in failing schools
be left without rational options.
One of the solutions my organi-
zation strongly supports to aid this
issue is a parent trigger.
Parent trigger allows a majority
of parents to mobilize together and
sign a petition to turn around a
persistently low-achieving public
school. In addition, it provides
families with leverage where they
otherwise do not have it by
education, the more likely our
cities will be to construct educa-
tion systems that put our students
first.
Despite aggressive efforts to
intimidate parents, four states –
including my home state of Ohio –
have passed comprehensive parent
trigger legislation. Many others
are have considered, or currently
in the process of considering this
revolutionary idea.
The concept of parent trigger has
even inspired an upcoming film,
“Won’t Back Down,” starring
Viola Davis. The film – scheduled
for release September 28 – por-
trays a single mother that
organizes parents to take control
of their children’s failing school
over strong union opposition.
I strongly encourage parents,
teachers and school administrators
to watch the movie.
Though the film was scripted in
Hollywood with make-believe
characters, real parents across this
country are faced with this harsh
reality every day. For those par-
ents, please keep your head up and
continue fighting the good fight.
There is no reason we should have
to gamble with the academic out-
comes of our children.
I was handcuffed, portrayed as a
villain, and called a criminal by
our justice system for doing what I
could to guarantee my children
had access to a quality education,
and a chance to have a better life
than I had. Like many of you, I am
not rich. However, the greatest
legacy or inheritance we could
ever leave our children is a fair
shot to achieve the impossible.
I encourage parents across the
country to learn your rights, and
visit the websites of StudentsFirst
(www.studentsfirst.org), and the
Black Alliance for Educational
Options (www.baeo.org) to edu-
cate yourselves on this issue.
In addition, I urge parents to
press elected officials to pursue
parent trigger legislation in your
communities.
Politicians, I urge you to listen to
our voices.
Our kids should not be trapped
in failing schools with no way out.
This needs to change now. Our
future is way too important to
wait.