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Information on the U of M/TCF Bank relationship

September 4, 2013

The University of Minnesota released the following statement in response to an ABC News request for interview re: student ID cards and related banking relationships.

"The University of Minnesota shares the concern of ABC News and policymakers that there may be existing questionable practices by some financial institutions that adversely affect students. In such cases, the University supports policymakers who want to do what’s best for students. We share that goal and our contracts and policies reflect these values.

While there may be some existing business arrangements across the country that negatively affect students, the U of M’s relationship with TCF Bank is not one of them. Our current arrangement allows students to make their own choices about banking, provides students convenience and abides by state and federal laws that protect student consumers.

Specifically, our agreement ensures:

  • Students have the choice of where to bank. No student, staff or faculty member is required to open a bank account to receive a U Card, nor is the process to link the U Card and the optional TCF Bank checking account automatic. The U of M campus also provides access to ATMs from competing banks including U.S. Bank and Wells Fargo, as well as a non-bank ATM. U.S. Bank also has a branch office on the West Bank of the Twin Cities campus. Other banks can market on campus, participate in events and sponsor programs.
  • Students’ best interests are protected. The optional checking account is one of the best banking options available to students and is in line with U.S. Public Interest Research Group (PIRG) principles. Features include: totally free checking; no minimum balance; free checks; and 21 ATMs on campus. TCF Bank was one of the first banks to adopt the Pew Foundation model disclosure to ensure transparency about account terms.
  • Aggressive marketing is prohibited. The U Card Office pre-approves all TCF Bank marketing. TCF Bank occasionally offers modest incentives, such as a free U of M sweatshirt. U Card holders are offered information about TCF Bank account options at the U Card office and the U Card contains a TCF Bank logo. However, U Card holders must actively pursue opening a TCF Bank account or linking their U Card to a TCF Bank checking account. It is not required.
  • The program reinvests in students. The U Card/TCF Bank agreement provides a payment to the University based on the number of active TCF Bank checking accounts from students, faculty and staff. To date, the University has received approximately $1 million per year in payments (the minimum payment allowed), which directly benefits students through scholarships and programs such as the Office for Equity and Diversity Annual Program, Homecoming and Spring Jam, the annual Transportation Fair and other events organized by student groups. The Center for Academic Planning and Exploration also receives funding to help students determine their major and make career decisions.

Background
The U Card is the official University of Minnesota photo ID card and conveniently links to multiple accounts, including Gopher GoldTM Value, FlexDine, Meal Plans and the Student Account. Students may also take the active choice of linking the U Card with a TCF Bank checking account – but only if cardholders opt into that account. The U Card, which contains a TCF Bank logo, also provides access to recreational facilities and computer labs, and serves as a building access card. The University has had a relationship with TCF Bank for nearly 20 years."

FAQ: U of M Banking Agreement with TCF Bank

When did the relationship between the U and TCF Bank start and why?
The University of Minnesota established a relationship with TCF Bank in the mid-1990s to provide greater convenience and banking options to students, faculty and staff members and to secure a long-term funding source that would reinvest in students through scholarships and programming. The agreement was extended in 2005 in conjunction with a new naming agreement for TCF Bank Stadium – the University’s football stadium.

What is the current contractual agreement between the U and TCF Bank?
The TCF Bank banking agreement was lengthened to 2023 with an optional six-year extension that coincides with the naming agreement timeline. Under the agreement, U Card holders have the option to open a separate TCF Bank checking account. The checking account is distinct from the issuance of a U Card. In other words, no student, staff or faculty member is required to open a bank account as a condition of receiving a U Card nor is the process to link the U Card and the optional TCF Bank checking account automatic. The checking account, if opened by an individual, is not utilized for financial aid distribution or other University business unless the U Card holder chooses to register the account for direct deposit.

The optional checking account presents one of the best banking options available to students and is in line with principles issued by the U.S. Public Interest Research Group (PIRG). Features include: totally free checking; no minimum balance; free checks; and TCF Bank ATMs on campus. U Card holders have the option of linking their U Card to the TCF Bank checking account for the purpose of accessing TCF Bank ATMs. While the U Card Office is responsible for issuing the U Card and the U Card contains TCF Bank’s logo, individuals wishing to open a TCF Bank checking account must do so with TCF Bank directly and not the U of M. 

The U Card/TCF Bank agreement provides a payment to the University based on the number of active TCF Bank checking accounts from students, faculty and staff. Until this year, the University has received $1 million per year in payments (the minimum payment provided for in the agreement). The money has been used to directly benefit students through undergraduate, graduate and professional scholarships and to support student programming initiatives such as the Office for Equity and Diversity Annual Program, Homecoming and Spring Jam, the annual Transportation Fair and other events organized by student groups. The Center for Academic Planning and Exploration also receives funding to help students determine their major and make career decisions.

How does the agreement ensure students maintain the choice of where to bank, are protected from predatory banking practices, practice financial literacy and generally benefit?

1. Students have the choice of where to bank. No student, staff or faculty member is required to open a bank account. The U of M campus also provides access to ATMs from competing banks, as well as a non-bank ATM. There is a TCF Bank branch office in Coffman Union and a U.S. Bank branch office on the West Bank of the Twin Cities campus. Branch offices of multiple banks are also within walking distance of the Twin Cities campus.

2. Students’ best interests are protected. The optional checking account is one of the best banking options available to students and is in line with U.S. Public Interest Research Group (PIRG) principles

3. Aggressive marketing is prohibited. While some marketing occurs, it is modest, such as the offer of a free U of M sweatshirt. U Card holders are offered information about TCF Bank account options at the U Card office and the U Card contains a TCF Bank logo. All marketing is pre-approved by the U Card Office.

4. The program reinvests in students. The U Card/TCF Bank agreement provides a payment to the University based on the number of active TCF Bank checking accounts by students, faculty and staff. Until this year, the University has received $1 million per year in payments (the minimum payment provided for in the agreement), which directly benefits students through scholarships and student programming.

How does the University of Minnesota live out its value of equipping students to make good financial decisions outside of the TCF Bank agreement?
From the moment University of Minnesota students step onto campus there are many initiatives and programs that help them manage their financial resources, minimize debt and increase financial literacy.

For example, more than 5,000 freshmen at the Twin Cities campus learned how to “Live Like A Student Now So You Don’t Have To Later” this fall. Student participation in the campaign is mandatory and aims to help students make smart financial decisions now, so they don’t graduate with excessive debt. Through face-to-face classes, social media and other resources, students learn how to manage money and navigate financial challenges, such has how to save on textbooks, buying a computer, spending habits and grocery shopping. The University also offers a class in fiscal literacy (including an online version) for students, as well as parent programs.

In 2011, free in-person financial literacy presentations reached 9,360 students and in 2012, the Live Like A Student web site received more than 110,000 visits. Students report that these efforts equip them for a healthier financial future: 70 percent of nearly 1,600 respondents who participated in our campaign said it made them think critically about spending decisions and saving money as a college student. 71 percent said the campaign made them more aware of the long-term impact of spending decisions.

How is the U-TCF Bank arrangement different from other agreements between higher education institutions and banks?
While other higher education institutions have agreements with financial institutions, the University of Minnesota’s agreement is significantly different. The U of M’s agreement is characterized by two key features: activating a TCF Bank checking account is entirely optional, and payments to the U are used for scholarships and student programming initiatives such as the Gophers After Dark program (late-night student activities) and Welcome Week. Meanwhile, some higher education institutions require students to open an account with a specific bank to allow for transfer of financial aid balances to the student. At the U, students may designate any banking institution and account for direct deposit of financial aid balances, payroll and other purposes.

For what purposes do students use a U Card?
The U Card is the official U of M photo ID card for students, faculty and staff and provides access to recreational facilities, computer labs, libraries and serves as a building access card. U Cards provide significant convenience to cardholders by allowing them to link to multiple accounts. Value may be stored on the card through the Gopher GOLD Value program for use at the campus post office, computer print labs, library photocopiers, the bookstore and vending machines, as well as for meal plans and the FlexDine program. Other uses include tracking of participants in Welcome Week programs, open houses and the TCF Bank checking account if a cardholder chooses to open one.

Are students required to open a TCF account upon receipt of a U card?
No. Students have the option to open a separate checking account through TCF Bank, but are not required to do so to receive their U Cards. In fact, the process to link the U Card and the optional TCF Bank checking account is not automatic. Cardholders must create this link by visiting a TCF Bank branch.

Why is this U-TCF Bank agreement in the best interests of the U as a public institution?
The U Card/TCF Bank agreement offers students, faculty and staff the convenience of linking multiple on- and off-campus uses – including an optional checking account – to a single card. It also provides access to a checking account option that is among the best in the marketplace. Finally, the agreement provides a stream of reliable funding for scholarships and programs that directly benefit University of Minnesota students, including diversity, Homecoming, academic planning and career exploration programs.

What effect does the relationship between the U and TCF Bank have on other financial institutions, and what implications exist for students, staff and faculty?
The U Card/TCF Bank agreement does not preclude other financial institutions to conduct business on campus and with students, faculty and staff. There are alternative bank ATMs on campus and an alternative bank branch office (U.S. Bank) on the West Bank of the Twin Cities campus. Branches of multiple other banks are within walking distance of the Twin Cities campus. The U Card/TCF Bank agreement offers a market-leading checking account to students, faculty and staff but it is entirely optional. U Card holders need to take action to open an account directly with TCF Bank, and must also act to link the checking account with their U Card.

Regardless of a cardholder’s relationship with TCF Bank, all students, faculty and staff have access to a variety of banking options on campus. The U provides for ATM locations for competing financial institutions, typically through a Request for Proposal (RFP) process. U.S. Bank and Wells Fargo have multiple ATM locations, and the McNamara Alumni Center provides ATM access with a non-bank ATM machine similar to those found at gas stations and convenience stores.

Have there been any cardholder problems with the current arrangement between the U and TCF Bank?
There have been minimal problems. If a parent or student changes their minds about opening an account, they are allowed to close it immediately. If a student has questions or concerns, the U Card Office facilitates those discussions to ensure resolution.

What would be the opportunity cost if the U did not have an agreement with TCF Bank and what would it mean for the parties?
The University and its students would no longer receive the benefit of at least $1 million a year in payments from TCF Bank, which is used for scholarships and a variety of programs that directly benefit students.

What protections are there for students in the agreement with TCF Bank?
There is no obligation whatsoever for students to sign up for a TCF Bank checking account. If they choose to do so, a number of features offer them financial protection.

  • A TCF Bank checking account has no monthly account fee, no minimum balance requirement, no fee for issuing or using a debit card, no fees for withdrawals at TCF Bank ATMs and unlimited free "foreign" ATM withdrawals in all U.S. states except in Minnesota and South Dakota, which is limited to four free transactions per month.
  • The features of the TCF Bank checking account are better than the recommended FDIC Model Safe Accounts Template and meet or exceed principles offered by U.S. PIRG.
  • TCF Bank was one of the first banks to adopt the Pew Foundation model disclosure to ensure transparency about its terms and practices.
  • When linked to a TCF Bank checking account, the U Card offers the convenience of both an ATM card and a debit card with merchants off campus that offer PIN-protected transactions.
  • If a parent or student changes their minds about opening an account, they are allowed to close it immediately. If a student has questions or concerns, the U Card Office facilitates those discussions to ensure resolution.

 

 

 

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