100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB0929

 

Introduced 2/7/2017, by Sen. Thomas Cullerton

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the College Debit and Prepaid Card Services Regulation Act. Provides that if contracting with third-party financial firms to provide disbursement and management services of financial aid funds or management of financial accounts to students, the governing board or governing entity of a public or private post-secondary institution of education that enrolls one or more students who receive State or federal financial aid shall review and approve the contract after considering guidelines and policies established and recommended by the United States Consumer Financial Protection Bureau and the United States Department of Education. Sets forth what the contract may not permit. Requires the public or private post-secondary institution of education to make the contract available for public inspection and publish the contract on the Internet website operated by or for the public or private post-secondary institution of education. Provides that if a public university or public community college negotiates a contract with one or more third-party financial firms, the public university or public community college shall undertake reasonable efforts to establish collaboration agreements with other public universities or public community colleges to negotiate the services.


LRB100 09586 MLM 19754 b

 

 

A BILL FOR

 

SB0929LRB100 09586 MLM 19754 b

1    AN ACT concerning education.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5College Debit and Prepaid Card Services Regulation Act.
 
6    Section 5. Definitions. In this Act:
7    "Account" means an account that is managed or operated by a
8third-party financial firm and that is opened to facilitate the
9financial aid refund disbursement process.
10    "Financial aid funds" means financial aid funds under Part
11B of Title IV of the federal Higher Education Amendments of
121998 (Public Law 105-244), including credit balances.
13    "Financial aid refund disbursement process" means the
14process of returning to a student the student's financial aid
15funds that are in excess of eligible education costs,
16including, but not limited to, fees and tuition.
17    "Revenue sharing" means payment from a third-party
18financial firm to a public or private post-secondary
19institution of education based on the balances or account
20activity of the accounts offered by the third-party financial
21firm to students enrolled at the public or private
22post-secondary institution of education.
23    "Third-party financial firm" means a company, business, or

 

 

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1other organization that contracts with a public or private
2post-secondary institution of education to provide
3disbursement and management services of financial aid funds or
4management of financial accounts to students enrolled in the
5public or private post-secondary institution of education.
 
6    Section 10. College debit and prepaid card services
7regulation.
8    (a) If contracting with third-party financial firms for
9disbursement and management services of financial aid funds or
10for management of financial accounts, the governing board or
11governing entity of a public or private post-secondary
12institution of education that enrolls one or more students who
13receive State or federal financial aid shall review and approve
14the contract after considering guidelines and policies
15established and recommended by the United States Consumer
16Financial Protection Bureau and the United States Department of
17Education.
18    (b) A contract between a public or private post-secondary
19institution of education and a third-party financial firm for
20services described in subsection (a) of this Section may not
21permit:
22        (1) revenue sharing;
23        (2) the third-party financial firm to charge a fee for
24    the initial disbursement of the financial aid funds in an
25    academic term to the student in paper check form or in an

 

 

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1    electronic funds transfer;
2        (3) the third-party financial firm to charge a
3    transaction fee for debit or similar transactions from an
4    account; or
5        (4) the third-party financial firm to charge a fee for
6    inactivity in an account.
7    (c) A public or private post-secondary institution of
8education that contracts with a third-party financial firm
9shall:
10        (1) make the contract available for public inspection;
11    and
12        (2) publish the contract on the Internet website
13    operated by or for the public or private post-secondary
14    institution of education.
15    (d) If a public university or public community college
16negotiates a contract with one or more third-party financial
17firms to provide disbursement and management services of
18financial aid funds or management of financial accounts to
19enrolled students, the public university or public community
20college shall undertake reasonable efforts to establish
21collaboration agreements with other public universities or
22public community colleges to negotiate the services.