SB3161sam001 99TH GENERAL ASSEMBLY

Sen. Thomas Cullerton

Filed: 3/18/2016

09900SB3161sam001 LRB099 17885 NHT 46252 a

AMENDMENT TO SENATE BILL 3161

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

"Section 1. Short title. This Act may be cited as the College Debit and Prepaid Card Services Regulation Act.

Section 5. Definitions. In this Act:

"Account" means an account that is managed or operated by a third-party financial firm and that is opened to facilitate the financial aid refund disbursement process.

"Financial aid funds" means financial aid funds under Part B of Title IV of the federal Higher Education Amendments of 1998 (Public Law 105-244), including credit balances.

"Financial aid refund disbursement process" means the process of returning to a student the student's financial aid funds that are in excess of eligible education costs, including, but not limited to, fees and tuition.

"Revenue sharing" means payment from a third-party financial firm to a public or private post-secondary institution of education based on the balances or account activity of the accounts offered by the third-party financial firm to students enrolled at the public or private post-secondary institution of education.

"Third-party financial firm" means a company, business, or other organization that contracts with a public or private post-secondary institution of education to provide disbursement and management services of financial aid funds or management of financial accounts to students enrolled in the public or private post-secondary institution of education.

Section 10. College debit and prepaid card services regulation.

(a) If contracting with third-party financial firms for disbursement and management services of financial aid funds or for management of financial accounts, 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.

(b) A contract between a public or private post-secondary institution of education and a third-party financial firm for services described in subsection (a) of this Section may not permit:

(1) revenue sharing;

(2) the third-party financial firm to charge a fee for the initial disbursement of the financial aid funds in an academic term to the student in paper check form or in an electronic funds transfer;

(3) the third-party financial firm to charge a transaction fee for debit or similar transactions from an account; or

(4) the third-party financial firm to charge a fee for inactivity in an account.

(c) A public or private post-secondary institution of education that contracts with a third-party financial firm shall:

(1) make the contract available for public inspection; and

(2) publish the contract on the Internet website operated by or for the public or private post-secondary institution of education.

(d) If a public university or public community college negotiates a contract with one or more third-party financial firms to provide disbursement and management services of financial aid funds or management of financial accounts to enrolled students, 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.".