Illinois state and federal regulators fined Higher One partner Cole Taylor Bank $4.1 million for deceptive business practices and marketing.

Michael Stratford of Inside Higher Ed has the story:

Federal and state regulators fine Higher One bank partner for misleading and deceptive practices

Federal and state regulators on Tuesday ordered a Chicago bank to pay a total of $4.1 million over its relationship with the campus debit card provider Higher One, which officials accused of misleading and deceiving students.

The Federal Reserve Board and Illinois’s Department of Financial and Professional Regulation took the action against Cole Taylor Bank, which partnered with Higher One until last August to provide college students with debit cards on which they can access refunds of their federal student aid.

Under the order issued Tuesday, to which Cole Taylor agreed, the bank will pay $3.51 million to the Federal Reserve and $600,000 to the Illinois regulators.

The agreement outlines a range of practices by Higher One, under Cole Taylor’s oversight, that regulators said were misleading and deceptive.

For example, the order says, Higher One failed to tell students how they could get their financial aid refund without having to open an account with Higher One. The order also alleges that the company didn’t properly inform students about the fees associated with the account.