Sen. Thomas Cullerton

Filed: 3/18/2016

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 3161

2    AMENDMENT NO. ______. Amend Senate Bill 3161 by replacing
3everything after the enacting clause with the following:
 
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.

 

 

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1    "Revenue sharing" means payment from a third-party
2financial firm to a public or private post-secondary
3institution of education based on the balances or account
4activity of the accounts offered by the third-party financial
5firm to students enrolled at the public or private
6post-secondary institution of education.
7    "Third-party financial firm" means a company, business, or
8other organization that contracts with a public or private
9post-secondary institution of education to provide
10disbursement and management services of financial aid funds or
11management of financial accounts to students enrolled in the
12public or private post-secondary institution of education.
 
13    Section 10. College debit and prepaid card services
14regulation.
15    (a) If contracting with third-party financial firms for
16disbursement and management services of financial aid funds or
17for management of financial accounts, the governing board or
18governing entity of a public or private post-secondary
19institution of education that enrolls one or more students who
20receive State or federal financial aid shall review and approve
21the contract after considering guidelines and policies
22established and recommended by the United States Consumer
23Financial Protection Bureau and the United States Department of
24Education.
25    (b) A contract between a public or private post-secondary

 

 

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1institution of education and a third-party financial firm for
2services described in subsection (a) of this Section may not
3permit:
4        (1) revenue sharing;
5        (2) the third-party financial firm to charge a fee for
6    the initial disbursement of the financial aid funds in an
7    academic term to the student in paper check form or in an
8    electronic funds transfer;
9        (3) the third-party financial firm to charge a
10    transaction fee for debit or similar transactions from an
11    account; or
12        (4) the third-party financial firm to charge a fee for
13    inactivity in an account.
14    (c) A public or private post-secondary institution of
15education that contracts with a third-party financial firm
16shall:
17        (1) make the contract available for public inspection;
18    and
19        (2) publish the contract on the Internet website
20    operated by or for the public or private post-secondary
21    institution of education.
22    (d) If a public university or public community college
23negotiates a contract with one or more third-party financial
24firms to provide disbursement and management services of
25financial aid funds or management of financial accounts to
26enrolled students, the public university or public community

 

 

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1college shall undertake reasonable efforts to establish
2collaboration agreements with other public universities or
3public community colleges to negotiate the services.".