Effective Today, Credit Card Act Restricts On Campus Marketing And Requires Disclosure
Significant provisions of the “Credit Card Accountability Responsibility and Disclosure Act of 2009” (“Credit CARD Act”), become effective today, February 22, 2010. Title III of the Act imposes restrictions on colleges as to the manner in which credit cards may be offered to students. Specifically, under the Credit CARD Act and related regulations:
• Colleges must disclose any agreement with credit card companies related to the marketing of credit cards. Posting may be accomplished by publishing the agreement on the college website or making the agreement available upon request.
• Colleges are prohibited from knowingly allowing the use of “tangible items to induce” students to apply for a credit card:
o on or near a college campus (within 1,000 feet of the campus border); or
o at an event sponsored by or related to the college.
• Prohibited tangible items include, for example, gift cards, t-shirts, and magazine subscriptions. Discounts, reward points, or promotional credit terms are not considered “tangible items” under the Act.
The Act also contains a strongly worded recommendation that colleges to enact their own campus policies providing that:
• Credit card issuers must notify the institution of the location at which the issuer will be marketing credit cards to students;
• Locations for such credit card marketing activities shall be limited to a number set by the institution; and
• Credit card and debt education and counseling sessions shall be offered as a part of student orientation.
Educational institutions should immediately implement procedures to bring themselves into compliance with the mandatory provisions of the Credit CARD Act and further consider implementing the additional campus policies recommended by legislature.
