WASHINGTON – Senator Chuck Grassley today said that an amendment he’s been working on to curb some of the practices of credit card companies on college campuses has been accepted to the Consumer Credit Act that cleared the Senate today.
The amendment, sponsored by Senators Dianne Feinstein, Bob Corker, Bob Casey and Grassley, requires the credit card companies and educational institutions to be transparent on any agreements made between the two.
“Students have enough to worry about between their classes, work, activities and tuition, they don’t need credit card companies hovering around every corner trying to sign them up for ‘cheap’ credit with free gimmicks,” Grassley said. “We’re not saying these agreements can’t be entered in to. What we’re saying is that any agreement must be transparent so students and alumni can see what their school has signed up for.”
Studies have shown that college students have an average of 4.6 cards, and half of college students had four or more cards. The average balance on credit cards owned by students is more than $3,000, and nearly 20 percent of college seniors have balances more than $7,000.
Specifically, the amendment:
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Requires credit card companies to report how much money they are giving to schools and alumni associations through these agreements and what they receive from the universities in exchange.
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Requires universities to publicly disclose any credit card marketing deals that they make with issuers;
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Calls for a GAO study to examine the extent of these deals and their overall impact on student credit card debt.
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Prohibits credit card companies from offering gifts to students in exchange for applying for credit cards.
Nearly two years ago, the Des Moines Register uncovered information showing that both the University of Iowa and Iowa State University participate in lucrative arrangements with credit card companies. Records obtained by the Register showed that the University of Iowa agreed to give the credit card company access to information that included the mailing addresses, telephone numbers and e-mail addresses of students, parents and people who buy tickets to Hawkeye football and basketball games.
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