Substantial Decline in College Credit Card Agreements
A report recently released by the Consumer Financial Protection Bureau showed the number of college credit card agreements between issuers and institutions of higher learning or alumni organizations dropped dramatically in 2011 versus 2010.
The data revealed a 20.6 percent decline in the number of agreements from 1,005 in 2010 to 798 in 2011.
In addition, the amount of revenue paid by issuers to institutions or alumni groups fell 15 percent from $73.5 million in 2010 to $62.4 million in 2011.
A subsidiary of Bank of America, FIA Card Services, was again the leading issuer of college card agreements with 633. This represented nearly 80 percent of all agreements. US Bank and Capital One were the other top issuers with 51 and 31 agreements respectively.
FIA Card Services terminated 216 college card agreements in 2011 which accounted for nearly 93 percent all terminated agreements.
Over 42 percent of these college card agreements were between the issuer and an alumni association of a school. Issuers had another 33 percent of agreements with the institution itself, and 18 percent with organizations affiliated with the institution such as a fraternity or sorority.
The five alumni organizations with the most number of open card accounts under these agreements were Penn State University, University of Michigan, Texas A&M University, University of Texas and Indiana University.
The CARD Act, passed in 2009, requires a detailed reporting of every college card agreement. The Federal Reserve Board submitted the reports for both 2009 and 2010, but the Dodd-Frank Act turned over responsibility of this report to the CFPB for 2011.