Compliance

While it is true that the act of initiating ACH transactions is inexpensive, there is much more to consider when running a refund program, including non-ACH refunds and student communications and service. By building your own program, your institution may take on the considerable security risk of housing banking information and PII (Personally Identifiable Information) on internal servers. You may want to consult your IT department about the cost and risk to your institution of protecting this data so you can factor this into the evaluation. Also consider that it would be very difficult for an institution to achieve 100% ACH participation. That is, some students may not or cannot deposit their refund electronically and will require a paper check. In many cases, the in-house processes of printing checks, reporting, and student service along with exception handling (like managing returned mail) can be very costly and add up to much more than the full cost of our solution. Our Refund Management^® Service was built to provide:

• Full-service call centers for both students and administrators, moving most (if not all) of the operational and service burden off of the institution
• All communications to students, including but not limited to refund preference selection, direct payment notification, exception handling and reporting

If a third-party servicer offers a financial account as part of its disbursement service, a Tier 1 arrangement exists. Our disbursement service is a Tier 1 service. If a financial institution offers  branded access device (such as a card), offers a joint ID and bank card, or the institution markets a financial account directly to its student one of these conditions must exist), AND at least one Title I credit balance ends up in that account, a Tier 2 arrangement exists. This chart from NACUBO can provide a more detailed view.

We believe the main advantages of Tier 1 relationships include:

1. Protection from potentially high-interest credit products:
   • Tier 1 service providers are precluded from offering credit products to your students. In other words, with a Tier 1 service provider, there is no risk that your students will receive unsolicited offers for credit products such as credit cards.
   • Tier 2 service providers and any other non-Tier 1 relationships are not subject to this provision, so your students may not be protected against being targeted for potentially high-interest credit products.
2. Transparency and protection from fees:
   • Regulations require a clear, fact-based and neutral selection process that students must go through to select a refund preference.
   • In addition, the Department of Education has regulated the types of fees that Tier 1 providers can charge on accounts offered within the selection process.
   • All of these protections do not apply in Tier 2 or other non-Tier 1 relationships.

• The new regulations state, per § 668.164(e)(2)(i) – students must consent to opening a financial account before an access device (or card) is sent to them, with an exception if the card serves an institutional purpose (such as an ID, library or meal card).
• Per §668.164(e)(2)(ii)(A)(1)-(4) & § 668.164(e)(2)(ii)(B)– institutions may transmit information necessary to process refunds to third-party servicers, including directory information (as defined here,) as well as student identifier, the disbursement amount, and a shared secret. No consent is required, and the only change from our existing demographic file process is that SSN may no longer be transmitted.
• Higher One always has required student consent before opening an account. We have never opened an account on behalf of a student without their consent and we will never do so.
• In addition, we have never required students to open a checking account in order to receive their refunds. Students have had and will continue to have choices in how they want to receive their refunds and are never charged a fee to receive their refunds.
• With the exception of those with ID programs, we will discontinue the mailing of non-active cards in the Refund Selection Kit to students by July 1. We will continue to send a Personal Code in the mailed Refund Selection Kit, as we do today, for students to validate their identity. No consent is required to send demographic information to third-party servicers or to send the Personal Code.

We are pleased to say that our entire Relationship Management, Admin Support and Call Center teams will continue to serve you and your needs after the acquisition, with a goal of minimal disruption to day-to-day operations.

No, specifically there will be no change to:

• The process of sending demographic files (with the exception of no longer being able to send SSNs in whole or in part)
• The refund file and wire process
• Disbursement timelines (the 14 day rule)
• Our model of personal service

Likely the biggest change you’ll see in the short term is the requirement to make available our contracts as well as account fee information specific to your institution on your website by a 9/1/16 deadline date. We are making that easy by providing you with a link you can simply post. We will take care of ensuring that all of the necessary documentation and disclosures are posted and updated. Please look for the link to be available shortly on bankmobileadminsupport.com. This requirement applies to all Tier 1 and Tier 2 relationships. If your institution has a Tier 2 relationship and/or both a Tier 1 and Tier 2 relationship, all agreements and subsequent fee information for all relationships must be posted on your website.

The majority of changes that are taking place are great for students, starting with the new online refund selection process, which will be simpler, quicker and easier to navigate. Working with a Tier 1 provider means that the financial account offered abides by strong regulations put in place by the Department of Education. Some of these regulations that are meant to protect students do not apply to accounts provided by Tier 2 providers or accounts provided in the open marketplace, including the prohibition of a point-of-sale or PIN fee, fees for in-network balance inquiries, and the offering of credit cards and debt products to students. Our disbursement service guarantees that an FDIC-insured checking account with all the consumer protections afforded by a Tier 1 arrangement is available as a choice for your students – regardless of their credit history. In addition, you can rely upon us as a chartered bank to be a single partner that provides both the disbursement service and the financial account for your students. We look forward to discussing our account offering in more detail on the webinars scheduled for early April.

The new account offering is one of the most student-friendly accounts on the market. The new account will have no monthly fee for students, no inactivity fee, no overdraft fees, no point-of-sale/PIN fees, no teller withdrawal fees, no check ordering fees, and no fee to talk to a customer service agent. In fact the account will only carry three fees for students:

• $2.50 for using an out-of-network ATM (outside of the new network of 55,000 ATMs)
• $25 for a wire transfer
• $10 to replace a bank card ($0 for ID programs)

We are pleased to be able to expand access for accountholders to a nationwide network of 43,000 Allpoint^® (55,000 ATMs internationally). Accountholders will have fee-free access to cash in this network. With this move to offer anywhere access, we will no longer be maintaining a specialized fleet of college campus ATMs. However, there may be opportunity for some campuses to manage their own ATMs on campus outside of this program. Your Relationship Manager can provide you with contact information and details.

The OneAccount will continue to be serviced by BankMobile Disbursements at this time.

We have already begun communicating these exciting changes to our accountholders and will regularly communicate changes and enhancements going forward. Scheduled communications to accountholders will include advance email notification discussing when Allpoint ATMs will be available for use and when multiple fees will be dropped from the account. We will work closely with you as well, to provide all the education necessary for your student population by way of campus posters, signage and online materials. New material is already available today on our Storefront. Just customize and download based on your campus needs.

Yes. Customers Bank has worked very closely with Higher One for more than two years as a bank partner, and is highly knowledgeable about our current business processes and campus needs. This move can ensure our leadership and team will continue to contribute their expertise and deliver a full-service product and personal service to you and your students under a new name. Customers Bank shares Higher One’s passion to serve college students and the millennial generation through technology. Higher One first leveraged technology to change antiquated processes to meet the needs of campus communities nationwide. Customers Bank’s BankMobile division has a vision for the future of banking that includes making banking more accessible and affordable to all. We believe combining visions, expertise and financial strength can help deliver next-generation services to you and your students today and tomorrow.