Presented to:PNC Bank Department of Education T2 RequirementsDisclosure Requirement Support

June 20, 2017

DePauw University

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Disclaimer

PNC Bank, N.A. does not provide legal advice, and nothing contained herein may be construed as such.

This document is intended to provide information to client schools regarding PNC Bank plans to provide support under our various University Banking Service Agreements.

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Department of Education Reporting RequirementsO

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Institutional ReportingNot later than Sept. 1, 2017, institutions with T2 arrangements must post financial information prominently on their website.* Schools must post the amount of consideration received, the number of students who had accounts at any time during the most recent “Award Year” and the meanand median total costs incurred by student account holders.

• Award year is July 1 – June 30 regardless of contracts terms

• Dear Colleague letter sent by DOE (see Exhibit 1) clarifies the regulation and allows flexibility with regard to the reporting of the number of accountholders and the method of calculation of mean and median. https://ifap.ed.gov/dpcletters/GEN1616.html

PNC will provide support for the filing requirements as described herein

*logically at the location where the institution posts its contract with a financial account provider.

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Regulation Applicable to T1 and T2 Instutions

Department of Education Program Integrity and Improvement; Final Rule Subpart K – Cash Management34 CFR 668.164 (f)(4)(iii)(C)

No later than September 1, 2017, and then 60 days following the most recently completed award year thereafter, disclose conspicuously on its Web site in a format to be published by the Department: The total consideration, monetary and non-monetary, paid or received by the parties under the terms of the contract; the number of students who had active financial accounts under the contract at any time during the most recently completed award year; and the mean and median of the actual costs incurred by those active account holders.

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Consideration

Total consideration to be reported to T2 institutions includes amounts paid by PNC under contracts, leases and/or license agreements which are part of the arrangement classified as T2. Payments made in the Award Year include:• Royalties • Contract Execution Payments • Rents and Licensing Fees• ID Program Reimbursement

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Means of Calculation

As described in the DOE Dear Colleague letter (Exhibit 1), institutions may use one or more of the following approaches to comply with the account and cost disclosure requirements:

• Matching Directory Information – The institution may provide directory information to its financial account provider which could be used to find matches in accountholder records.

• Accounts Linked to a Campus ID – Report on the accounts linked to student IDs.

• Revenue Sharing – This arrangement is based on the number of enrolled students who opened an account under the arrangement in the previous award year if the account provider can readily identify the accounts opened by students.

PNC Bank will support the Revenue Sharing option• Matching Directory Information will be inaccurate, will require significant resources on

behalf of schools and PNC to accomplish and may require additional disclosures to or possibly permission from students to pursue.

• ID linking will be incomplete and is not available at all schools.

• Revenue Sharing is PNC’s choice because:• PNC identifies institutions’ students when accounts are opened. • The data is readily available for all client schools.• Focus on previous year accounts opened provides a statistically reliable

representation of the costs to all students.

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Number of Student Accountholders

• PNC applies a unique school code to a new student account when it is opened based upon customer representation as to the school they attend at the time that we accept their application. The code remains as long as the account is active.

• With the passage of time students may exit schools while other students, who may have opened their accounts while attending other schools, may transfer in. Therefore, accounts at PNC Bank with a school code will include many held by individuals who no longer attend that school. Additionally, among the students attending any institution there will be PNC accountholders whose accounts have the code of a different school. Without full sharing of customer/student confidential information with universities, prohibited by law, PNC Bank cannot identify a complete list of every student accountholder currently attending a T2 institution.

• Each T2 school to be given the # of checking accounts encoded with that institution’s school code(s) open for all or a part of the Award Year beginning with the year ending June 30, 2017.

• The number will be footnoted as follows. “The number is the total accounts which were open for all or a part of the Award Year and held by individuals who stated they attended the school when the account was opened. With the passage of time customers’ status as students and the school they attend may have changed.”

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Mean and Median

Fees Included/ExcludedIf the fee is for an account service provided by PNC Bank then include it,

• Examples: maintenance charges, foreign ATM fees, overdraft fees, paper statement fee, card replacement fee, counter check charges, etc. See the list on this page.

Fees which pass through a checking account for a purchase or service not directly associated with the account and which could have been paid for via other means are excluded,

• Examples are Wires Out fees, Affinity Card purchases

Fees paid to another institution which pass through accounts are excluded,

• Example foreign bank ATM surcharges

A. Identify accounts which opened from 7/1/2015 – 6/30/2016, the previous Award Year, which were active for all or a part of the most recent Award Year.

B. Report fees paid during the most recent Award Year, 7/1/2016 – 6/30/2017.

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Reporting Timeline

By August 18, 2017 the following reporting will be provided

1. Consideration paid2. Total number of student financial accounts3. Mean student costs4. Median student costs

Universities are required to post on website by Sept.1st

In order to facilitate secure, timely and accurate delivery please provide a contact name with email and US Mail addresses.

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Account Features, Fees, and URL

Additionally, beginning July 1, 2017, covered schools must list “the majorfeatures, commonly assessed fees, and the URL where the terms andconditions of each account may be obtained” offered by banks under T1 and T2 arrangements. See 34 CFR § 668.164(d)(4)(i)(B)(2)

Currently, T2 client schools are all provided PNC Bank’s short form disclosure for the Virtual Wallet Student account. The Virtual Wallet Student short form disclosure contains the information required by § 668.164(d)(4)(i)(B)(2), the major features, commonly assessed fees.

The Virtual Wallet fine print disclosure includes the full detailed terms and conditions of the Virtual Wallet.

See Exhibit 4 for URL’s to both forms and a copy of the Virtual Wallet Short Form disclosure document.

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RFI – Draft Template

As you may be aware, the Department of Education also recently issued a Request for Information to solicit input about a draft account disclosure template. Available athttps://www.federalregister.gov/documents/2017/05/09/2017-09349/request-for-information-regarding-disclosures-for-student-financial-accounts.

The draft template in the RFI has not yet been finalized by Dept. of Education, as they continue to review the feedback submitted.

PNC Bank has reservations about the proposed disclosure template. Additionally, the Consumer Bankers Association and the American Bankers Association raised concerns and submitted comments to the Dept. of Education on the RFI. See Exhibit 2 for the CBA/ABA letter.

The National Association of College and University Business Officers (“NACUBO”) also commented to DoE on the RFI, raising similar questions and concerns about the proposed template format. See Exhibit 3 for the NACUBO letter.

PNC will continue to provide schools with our short form disclosure for the Virtual Wallet Student account. This disclosure lists the major features and types of commonly assessed fees for the Virtual Wallet Student account which is promoted through our arrangements and offered to students. In addition PNC provides URLs detailed disclosures wherein students can find the full terms and conditions of the Virtual Wallet Student account. See Exhibit 4.

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Exhibit 4: Account Disclosures

Short Virtual Wallet Student Disclosure

pnc.com/virtualwalletfineprintThis defines the relationship between the account holder and PNC Bank. It helps them understand their account and provides insight into procedures at PNC that impact their account.

http://intranet.pnc.com/ric/rcb/prprcb.nsf/ViewByKey/PNC-Virtual-Wallet-Features-and-Fees---Thick060117/$File/RDAOPC12AFeeSchVirtualWalletThick060117.pdf?OpenElement

Full detail of fees applicable in: Delaware, Florida, Illinois (excluding Boone, Cook, DeKalb, DuPage, Kane, Kankakee, Lake, McHenry, Will and Winnebago Counties),Indiana (excluding Jasper, Lake and LaPorteCounties), Kentucky, Maryland, Michigan, Missouri, New Jersey, New York, Ohio, Pennsylvania, Virginia, West Virginia, and Washington D.C. markets.

http://intranet.pnc.com/ric/rcb/prprcb.nsf/ViewByKey/PNC-Virtual-Wallet-Features-and-Fees---Thin060117/$File/RDAOPC12BFeeSchVirtualWalletThin060117.pdf?OpenElement

Full detail of fees applicable in: Alabama, Georgia, Illinois (Boone, Cook, DeKalb, DuPage, Kane, Kankakee, Lake, McHenry, Will and Winnebago Counties only), Indiana (Jasper, Lake and LaPorte Counties only), North Carolina, South Carolina and Wisconsin markets.

Detailed Virtual Wallet DisclosuresThe detailed Virtual Wallet Disclosures provide “the URL where the terms and conditions of each account may be obtained”.

pnc.com/vwstudentsummaryThe Short Virtual Wallet Student Summary (see next page for an example) provides “the major features, commonly assessed fees”.

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