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Choosing your first bank account is an important decision. Unlike that first school ID photo, your first banking relationship could last long after you graduate. Making a smart decision now will mean fewer surprise fees that can add up later.

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1. Choose an account as soon as possible. You should try to find an account before you start school. Don’t feel limited to only the banks or credit unions that have ATMs on or near campus; some will automatically reimburse fees for using any ATM. Consider accounts that offer services like remote check deposits, mobile apps, and online bill-pay. Signing up for a bank account now can save you headaches later, and researching accounts with the lowest fees can save you money.

2. Avoid paying unexpected fees. Dig deeper when accounts are marketed as “free” or “easy” – very few accounts charge no fees at all. Does your bank charge monthly fees? Many require minimum balances or regular direct deposit to avoid monthly fees. What about out-of-network ATM fees, overdraft fees, fees to use your debit card, and fees for services like online bill-pay? Knowing if and when fees will be charged could save you hundreds of dollars in fees each year. While half of young Americans never overdraft, the other half average approximately seven overdrafts a year. Overdrafts can cost more than $30 each, so that’s potentially a lot of money taken out of your pocket.

3. Sign up for direct deposit as soon as possible. Once you have a bank account, sign up for direct deposit with your school before classes start. If you are expecting money from your financial aid office, you’ll often get it faster this way – it can be weeks before the school gets to writing you a paper check.

Choosing a bank account

You have many bank accounts options. Here are are three possibilities and key factors to compare when making your decision.

	Virtual checking accounts	Student checking account	School-affiliated banking services
How it works	Some financial institutions provide exclusively online banking services that are comparable to a traditional checking account	Some banks and credit unions offer student checking accounts with discounted fees to establish long term relationships with new customers	Many colleges have a bank they partner with to offer students campus affiliated checking accounts or prepaid debit cards
Benefits	May waive or reimburse ATM fees, even those for out-of-network ATMS Often include online banking and bill-pay Often have mobile apps for things like remote check deposit Often won’t let you overdraft your account	Free access to in-network ATMs May include online banking and bill-pay Access to traditional in-person bank branches	On-campus branch locations and ATMs May include online banking and bill-pay May offer discounts at local or campus businesses Sometimes your student ID card can be used to access your money
Risks	Generally do not have in-person customer service options	Possibly charge monthly maintenance fees – up to $12 a month in some cases – if you don’t meet the minimum balance or the bank’s other enrollment criteria, like maintaining a full-time enrollment status at school May charge more than $30 per overdraft, which can add up quickly, especially if you opt in to coverage for ATM and debit card overdrafts	Could charge fees every time you use your debit card Don’t always provide the ability to write checks May charge inactivity fees each month for not using your account frequently Possibly charge monthly maintenance fees – up to $12 a month in some cases – if you don’t meet the minimum balance or the bank’s other enrollment criteria, like maintaining a full-time enrollment status at school May charge more than $30 per overdraft, which can add up quickly especially if you opt in to coverage for ATM and debit card overdrafts

Accessing your financial aid

After your school takes out the cost of tuition, fees, and any on-campus living expenses from your total financial aid award, there is often money left for you to use for other expenses, like books. You normally have several options for how you get that money, including direct deposit to a bank account, to a card that might also double as your student ID, by check, or cash.

We recently published an advisory to consumers about financial aid disbursements, and we encourage you to choose your disbursement option wisely. They all have benefits and risks, so the most important thing is that you understand your needs and what potential fees you will be charged to use each option.

	Direct deposit to personal account	Paper check	Financial aid disbursement account
How it works	Once you choose the best bank account for you, share that information with your school, and they will deposit additional aid funds directly to that account	Schools generally must offer a paper check or cash option no later than 14 days after the funds are available	A school may partner with a bank or another third party to handle financial aid disbursements The most common option is a debit card attached to bank account that has your financial aid deposited in it You are not required to use the bank chosen by your school
Benefits	You can pick an account that offers what you need and charges few or no fees You can access the disbursement quickly with direct deposit	You can deposit your money into the account of your choice and do not need to provide additional personal financial information	Often the quickest way to access to your disbursement if you haven’t already provided your school with direct deposit info
Risks	No significant risks	If you use a check casher, they may charge as much as 4% of the check amount You may not be able to access your funds immediately after making a deposit	The school makes the agreement with the bank, not you You won’t be able to shop for a low-cost product, and these cards and accounts may come with fees you could avoid by shopping

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If you’re having trouble paying your mortgage, we can help you get connected to a HUD-approved housing counselor at no cost to you. The counselor can help you work with your servicer or lender to try to avoid foreclosure, organize your finances, understand your mortgage options, and find a solution that works for you.

Get foreclosure help.

How to spot a scam

Mortgage loan modification scams are designed to take your money by making a false promise of saving you from foreclosure. Scammers may:

• Ask you to pay high fees upfront to receive services,
• Promise to get you a loan modification,
• Ask you to sign over title to your property,
• Ask you to sign papers that you do not understand,
• Say you should start making payments to someone other than your servicer or lender,
• Claim to be conducting a “forensic audit,” or
• Tell you to stop making mortgage loan payments altogether.

Companies that offer mortgage relief services aren’t allowed to collect any fees until they give you a written offer from your servicer or lender that you decide is acceptable. A mortgage relief company must also tell you that:

• The company is not associated with the government;
• Your lender may not agree to modify your loan; and
• If the company tells you to stop paying your mortgage, that you can lose your home and damage your credit.

If you think you have been scammed

File a complaint online or call us at (855) 411-CFPB (2372) from 8 a.m. – 8 p.m. ET, Monday-Friday.

Share this with #ForeclosureHelpIsFree

It can be hard for people to talk about finances, especially if they’re in trouble. Even if you’re not facing foreclosure yourself, please share a link to this advice with your networks using the hashtag #ForeclosureHelpisFree. You’ll never know who you might be able to help.

The Consumer Financial Protection Bureau (CFPB) has determined that Capital One marketed certain “add-ons” – fee-based services added to credit card accounts – in a way that violated federal law. As a result of enforcement action by the CFPB, Capital One agreed to automatically refund $140 million to 2 million Capital One customers.

Capital One customers: If you’re eligible for a refund and you have an open account, the refund will be automatically credited to your account. If you’re eligible but no longer have an account with Capital One, a check will be mailed to you. You should expect to receive your refund later this year. You don’t need to take any action to get your refund.

If you have questions about whether you are entitled to a refund, please contact Capital One.

Watch out for scammers claiming that they will get you a refund: When large numbers of consumers get refunds, scammers sometimes pop up. The scammer may charge you a fee or try to steal your personal information. If someone tries to charge you, tries to get you to disclose your personal information, or asks you to cash a check and send a portion to a third party in order to “claim your refund,” it’s a scam. Call us at (855) 411-CFPB.

For the first time, consumer reporting agencies will be subject to a federal supervision program. Earlier today, we held a field hearing today in Detroit for the announcement with remarks from Richard Cordray, CFPB Director, as well as testimony from consumer groups, academics, industry representatives, and members of the public. Director Cordray said:

[The credit reporting] system must merit our trust and confidence for the credit markets to be perceived as fair. We all share in this responsibility. But the credit reporting market is not one where consumers can shop around among different providers, for people have no choice about whether to have any of the credit reporting companies keep track of their credit history. That is why the Consumer Bureau’s new authority is so important, and why it must be exercised carefully and effectively.

Archived footage is available below. You can also read Director Cordray’s full remarks right now.

More on credit reporting

See the rule that establishes our consumer reporting supervision authority.
Read a consumer advisory on checking your credit score.
Find a credit reporting company that specializes in a particular area like medical history, employment history, etc.
Tell us your story about credit reporting.
Tweeting about the event our our announcement? Use #CreditReporting.

Video coverage of today’s event

We invite you to participate in a field hearing in Detroit, Michigan on credit reporting.

The field hearing will take place on Monday, July 16, 2012, at 11:00 am in the Detroit Institute of Arts, 5200 Woodward Avenue, Detroit, Michigan.

The field hearing will feature remarks from Richard Cordray, CFPB Director as well as testimony from consumer groups, academics, industry representatives, and members of the public.

This event is open to the public and requires an RSVP. To RSVP, email your full name and your organizational affiliation (if any) to cfpb.events@cfpb.gov.

This is the third post in a series on the Know Before You Owe project for simplifying mortgage disclosures. Last week, we explored the origins of the project and the process that brought us to this point. Today, we’re explaining the proposed rule we’re issuing to make mortgage disclosures more effective and easier to use.

For the majority of Americans, buying a home means taking out a loan. A mortgage loan is the biggest financial commitment most of them will make in their lifetimes. With something so important, you ought to be able to get up-front, easy-to-understand information that lets you compare different loan offers and find the one that’s best for you.

That idea was the starting point for the Know Before You Owe mortgage disclosure project. The Dodd-Frank Act requires us to combine the Truth in Lending and Real Estate Settlement Procedures Act disclosures, and we began Know Before You Owe to make sure the people who would use the new forms were part of the process of creating them.

Today, we’re presenting the results. After more than a year of research, testing, writing, and review, we’re submitting a proposed rule to the Federal Register to create new, easier-to-use mortgage disclosures.

Take a closer look and learn more about it.

There is more to the proposal than just the forms. Today, rules known as “Regulation X” and “Regulation Z” tell industry how to fill out the forms. We are proposing new rules in Regulation Z to tell industry how to fill out the new forms. We are also proposing commentary that interprets the rules to help industry understand how to comply. To help you see how the rules and the commentary interact with each other and the forms, we are showing you the applicable rules and commentary for each section of the first page of the Loan Estimate.

We’re doing this to save you the trouble of flipping pages to find the right rule for filling out the form, and then flipping more pages to find the right comment to help you understand that rule. Instead of you hunting for the rules and commentary, they will come to you.

We think this is a helpful way to present the proposed rules and commentary to busy industry stakeholders. If this is useful, we will explore doing it for the rest of the rule. See for yourself.

The proposed rule and forms would have benefits for both consumers and industry:

• Simpler than the old forms. Lenders can explain the terms more easily using fewer forms. Consumers, meanwhile, can understand and compare different mortgages more effectively, and compare their estimated and final terms and costs more easily, helping them make the right decisions for themselves and their families.
• Highlight information consumers need. Interest rates, monthly payments, the loan amount, and closing costs are all right there on the first page. Also, the first page explains how the interest rates, payments, and loan amount might change over the life of the loan, including the highest they can go. The forms also offer more information about taxes, insurance, and other property costs so consumers can better understand the total cost.
• Easier to look out for risks. The forms provide clear warnings about features some consumers may want to avoid, such as adjustable interest rates and payments, prepayment penalties, and loan balances that increase (negative amortization). The proposed rule also contains provisions to make estimates more reliable. And because the proposed rule requires lenders to keep electronic copies of the forms they give to consumers, industry and regulators will be able to address compliance questions more easily.
• More time to consider choices. The lender or broker must give the estimate within three business days of applying, and they must receive the closing disclosure at least three business days before closing.

The rule will be published in the Federal Register soon, and when it is, we’ll update this blog post to let you know how to comment.

In the meantime, please, check out the new forms and the process that brought us here. We’ve got a lot more for you to explore: a side-by-side comparison of the new forms and the old ones, a visual timeline of how we got here, summaries for consumers and for industry, and reports on what we learned.

Thank you for all your hard work. We couldn’t have done this without you.