In light of ABC News' Sept. 5 article highlighting TCF Bank's overdraft fees and potentially detrimental presence on UMN campuses, the Statesman conducted its own investigation into the matter. According to university documents, the University of Minnesota signed an agreement with TCF Bank in 2003 that granted TCF exclusive marketing rights on campus and access to students.
Other institutions, like US Bank, Wells Fargo and U of M Credit Union, participated in the bidding process, as well. TCF’s offer of $19 million over 10 years was $10 million more than the next highest bidder, and dwarfed U of M Credit Union’s offer of $144,000. As a result, UMN chose to partner with TCF Bank.
The agreement gives TCF rights to market on campus, and even explicitly allows TCF to offer free sweatshirts upon students' first $50 deposit into their new accounts.
The sweatshirts may be free, but TCF’s exclusive presence costs them. The agreement stipulates that TCF must pay royalties of $34 for every active U Card account. It should be noted, however, that TCF pays UMN minimum royalties of $1 million per year, no matter how many U Card accounts are active. Only when royalties from active U Cards exceed $1 million does TCF pay more. This has happened once; in 2012, TCF Bank paid UMN an extra $415 for a total royalty payment of $1,000,415.
Tight student budgets mean stretching account balances thin, and making purchases with insufficient funds can result in hefty overdraft fees.
This is standard practice among all financial institutions, and the median per-item overdraft fee for the nation's 14 largest banks is $35, according to a May 2012 Consumer Federation of America report. TCF Bank charges $37, topping those figures. TCF Bank's practice of charging a per-item fee is standard across the industry.
Since 2004, UMD has leased space in Kirby Plaza to TCF Bank, where it operates a full-service branch. It’s located right next to where student ID cards are issued to incoming students, and everyone receiving an ID card is asked whether they would like to open an account with TCF Bank. Many do.
"I have an account with (TCF)," said UMD senior Colin Lesnar. "I opened an account with them when I was a freshman . . . the convenience factor had a great influence. I compared it to US Bank, and TCF was a better option in terms of fees for me, since TCF doesn't have any fees for inactivity," Lesnar said. "I've never had any problems with TCF, and will continue to bank there."
Senior Dave Gianoli agrees with Lesnar’s assessment of TCF’s convenience.
"It's nice to have a (TCF) account on campus," Gianoli said. "I opened it because it was on campus, and I needed a place to cash checks . . . I haven't had any problems with my account or service," Gianoli added.
Students without cars enjoy the proximity of a full-service bank branch within walking distance.
"It helps a lot of the students on campus who can't drive," said freshman Payton Salquist.
Her classmate Tiffany Chesser agreed, noting that "(the branch) is convenient for freshman."
Some students even want more banks to open on-campus branches.
"At least one more bank," said senior James Olatunbosun. "Having just one makes you want to switch to TCF, and that could be tough."
Duluth native and UMD sophomore Lex Houle banks with Wells Fargo and wishes there was a Wells Fargo branch on campus.
"It would be so cool if Wells Fargo had a branch on campus, since then I wouldn't have to travel as far," Houle said.
BY JOHN FAHNENSTIEL fahne006@d.umn.edu -- PHOTO BY SARAH STARK stark473@d.umn.edu