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Senator Cautions Education Department On Student Aid Disbursement Products Rulemaking

August 15, 2014

On August 12, Senate Banking Committee ranking member Mike Crapo (R-ID) sent a letter to Education Secretary Arne Duncan to express concern that an ongoing Education Department rulemaking regarding student loan disbursement products could force financial institutions to exit campus markets. At issue is the scope of the rulemaking, which could potentially regulate traditional banking products unrelated to the Title IV disbursement products. The Senator’s letter is the latest in a series of letters from Capitol Hill raising concerns about the scope of the rulemaking and calling for the Education Department to reevaluate the proposal. In his letter, Senator Crapo questions the Education Department for moving forward with the rulemaking without having consulted with any of the prudential banking regulators. The letter also requests an extension of the timeline for the rulemaking so that the public has sufficient time to provide comments.