CFPB orders colleges to disclose secret campus credit card contracts
Wednesday, December 16, 2015
Consumers Union Applauds Action To Ensure Students Are Getting a Good Deal
WASHINGTON, D.C. – Consumers Union, the policy and advocacy division of Consumer Reports, praised the Consumer Financial Protection Bureau today for issuing warning letters to 17 colleges directing them to improve the disclosure of school-sponsored credit card agreements.
Earlier this year, Consumers Union contacted the CFPB and shared the results of its investigation finding that it was very difficult to find out information about contracts between schools and banks to market credit cards to students on campus. Today’s announcement by the CFPB confirmed similar findings based on the agency’s own investigation.
“Today’s action by the CFPB makes clear that the days are numbered for colleges and universities cutting secret deals with banks that offer financial products on campus,” said Suzanne Martindale, staff attorney for Consumers Union. “Students have a right to know the details of any deal their school makes with financial firms marketing campus credit cards.”
The Credit Card Accountability and Disclosure Act, or CARD ACT, was passed after the 2008 financial crisis to provide credit card reforms and protections to help consumers. The law requires colleges that have credit card marketing agreements with financial institutions to make the agreements available to the public, online or upon request.
“Students deserve to know whether their school has negotiated a good credit card deal or is just trying to pad their own finances,” said Pamela Banks, senior policy counsel for Consumers Union. “The CFPB should be applauded for ensuring that all schools follow the law by disclosing these contracts.”