Fewer Colleges Making Deals With Credit Card Companies, CFPB Finds

December 18, 2013
Columbus Business First 
credit card news

A new report from the Consumer Financial Protection Bureau (CFPB) counts 617 agreements in place between credit card issuers and U.S. colleges at the end of 2012, down from 796 in 2011 and 1,045 in 2009. The analysis, required by the 2009 CARD Act, provides information on the relationships between financial institutions and colleges -- as well as alumni groups and fraternities -- that include royalty payments.

Despite the shrinking numbers, CFPB director Richard Cordray said there is still a need for better public disclosure. “Students and their families should know if their school, whether well-intentioned or not, is being compensated to encourage students to use a specific account or card product,” he said in a press release. “When financial institutions secretly give kickbacks to schools, they are engaging in risky practices.” Colleges and related groups were paid a total of $50 million in 2012 by card issuers, down from $84 million in 2009.

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