If you’ve been wondering why it’s so difficult to locate your college or university’s credit card agreement with various issuers, wonder no more. Results from the Consumer Financial Protection Bureau’s recent annual report on college credit card agreements sheds some light on this.
The report, entitled College Credit Card Agreements: Annual Report to Congress, found a nearly 70% reduction in the number of credit card agreements since Congress enacted new requirements for disclosure in 2009. The CFPB says the report findings point to the trend of marketing partnerships between colleges and financial institutions that are moving away from credit cards and more toward products such as debit and prepaid cards. These products do not usually have as many protections.
Furthermore, the bureau discovered that many colleges with credit card agreements do not make an effort to make them easily accessible to students and families. The CFPB analyzed 35 college and university websites to see whether they made their credit card agreements easily accessible. It was found that 80% of the colleges and universities (28 out of the 35 analyzed) fail to place their agreements (or instructions on how to obtain them) on their websites.
“Today, financial institutions are cutting more deals with colleges and universities to market student banking products that require less disclosure,â€ said CFPB Director Richard Cordray. “Schools and financial institutions should be up front on their website with students and their families about whether or not the school is being compensated to encourage students to use a specific account or card product.â€
Read the full report here.