WASHINGTON–A report released by the Bureau of Consumer Financial Protection has found Wells Fargo charged high fees to college students who opened accounts and held debit cards, with costs that were higher than the average of any other financial institution.
In addition, it found students at universities where a financial institution had paid for sponsorship rights were also charged higher than fees than schools that did not have sponsorships in place.
The BCFP report was only released publicly after consumer advocacy groups submitted freedom of information requests for the document. A copy was sent from the agency to the Department of Education in February.
Seth Frotman, the former student loan ombudsman at the Consumer Financial Protection Bureau, had accused agency heads of burying the report when he quit in protest earlier this year, according to CNN.com.
"When new evidence came to light showing the nation's largest banks were ripping off students on campuses across the country by saddling them with legally dubious account fees, Bureau leadership suppressed the publication of a report prepared by bureau staff," Frotman wrote in his resignation letter.
The report reviewed accounts at nearly 600 colleges that had partnered with banks for student promotions. It found some banks paid colleges based on the number of students who opened accounts. Although most students who signed up for these accounts did so without accruing fees, certain banks "pose a risk to student consumers," according to the report.
The Bureau report found financial institutions that did not pay colleges for promotion charged $11.93 in account fees on average over a 12-month period. But students paid an average of $36.52 in fees to banks that paid colleges for their sponsorship. Students who had accounts with Wells Fargo paid the most -- an average of almost $47, the Bureau found.
Wells Fargo spokesperson Jim Seitz told CNN.com that average costs vary by school. He further said that some students may have more fee-eligible banking needs, such as sending wires or purchasing more checks.
“There is no indication in the Consumer Financial Protection Bureau report that Wells Fargo disproportionately serviced more students with such needs. The average is based on 30 colleges that had partnerships with Wells Fargo and reported the required data,” CNN.com reported.
According to Seitz, Wells Fargo waives monthly service fees on primary checking accounts for those between the ages of 17 and 24, Seitz added.