In 2009, Congress passed the Credit Card Accountability,
Responsibility, and Disclosure (CARD) Act, which requires issuers to
disclose to the CFPB the terms and conditions of any college credit
card agreement, the number of new credit card accounts, and the
compensation paid by issuers to institutions of higher education in
the previous year. In order for students and the public to identify
marketing agreements currently in effect, Congress further required
that colleges and universities also publicly disclose these
agreements. The CFPB is required to submit an annual report to
Congress about these agreements, and to make the report publicly
available.
The Consumer Financial Protection Bureau (CFPB) released
its annual report on college credit card agreements, which shows a
nearly 70 percent decline in the number of agreements since
Congress passed new disclosure requirements in 2009. These findings
highlight the trend of shifting from credit cards toward other
products such as debit and prepaid cards. The report also found that
most colleges with credit card agreements do not make those
agreements readily accessible to students and families. BRIEF HISTORY
A lack of transparency in the student loan and credit card markets led Congress to enact reforms to help the public better understand the marketing partnerships between colleges and lenders. In 2008, Congress passed a law requiring schools to disclose preferred lender arrangements with student loan providers and establish a code of conduct for school officials.
REPORTThe CFPB found that:
- College credit card agreements continue to decline:
In recent years, there has been a steady decrease in both the number
of college credit card agreements and open accounts. In 2009, some
1,045 agreements were in effect. In 2013, 336 agreements were in
effect; around a 70 percent drop.
- College debit and prepaid card agreements are now
more common than credit card agreements: According to a
report from the Government Accountability Office, there were at
least 852 schools that had agreements with companies to market debit
or prepaid cards to students in 2013. Unlike credit cards, these
products do not have specific requirements in federal consumer
financial laws to disclose their marketing partnerships.
- College credit card agreements are not readily
accessible: The CFPB reviewed 35 college and university
websites to determine if they made their credit card agreements easy
for students and families to find and access. The Bureau found that
80 percent of these institutions—28 of 35—do not put their
agreements, or information about how to request them, on their
websites.
