NMU's Compliance Database - Northern Michigan University

Under a T2 arrangement, an institution must ensure that:

• Student accountholders can make balance inquiries and access funds through surcharge-free in-network ATMs sufficient in number and such that funds are reasonably available;
• Student consent to open the financial account has been obtained before the institution provides any personally identifiable information about the student to the financial institution, other than directory information;
• Financial accounts are not marketed or portrayed as, or converted into, credit cards; and
• Students incur no cost for opening the account or initially receiving or validating an access device.

An institution offering accounts under T2 arrangements must ensure that the terms of the accounts offered pursuant to a T2 arrangement are consistent with the best financial interests of the students opening them. 

The Department considers the best financial interests of the student to be met if: 

• The institution documents that it conducts reasonable and independent due diligence reviews at least every two years to ascertain whether the fees imposed under the T2 arrangement are, overall, consistent with or below prevailing market rates. The Department does not consider solely reviewing material by the provider of the account to be a reasonable due diligence review and expects institutions to identify and consider prevailing market rates in order to determine whether any fees assessed under their T2 arrangements, including any overdraft, Non-Sufficient Funds (NSF), or monthly account fees, are inconsistent with students’ best financial interests, particularly given the wide availability of accounts that do not charge such fees; and
• All contracts for the marketing or offering of accounts to students allow the institution to end the arrangement based on complaints from students or a determination in an institutional review that the fees assessed under the T2 arrangement are not consistent with or exceed prevailing market rates.

An institution entering a T2 arrangement must (similar with T1 arrangements) conspicuously disclose on its website, no later than 60 days following the most recently completed award year, any contract between the institution and a financial institution (except for portions of a contract that, if disclosed, would compromise personal privacy, proprietary information technology, or the security of information technology or of physical facilities), as well as the total amount of any remuneration, monetary or nonmonetary, paid or received by either party during the prior year. The institution must further disclose on its website (also within 60 days following the most recently completed award year) the number of students who had financial accounts under the contract and both the mean and median of the actual costs incurred by those account holders for any year in which enrolled students opened 30 or more accounts under the T2 arrangement.