A nationwide campaign intended to counter on-campus marketing of credit
cards was launched Wednesday at the University of Iowa and dozens of
other schools across the United States.
The Public Interest
Research Group, a citizen advocacy organization based in Boston, joined
forces with three national associations of higher education officials
to call for new limits on credit card company solicitations that are
aimed at students.
The intent isn't to limit students' access to
credit, but to eliminate controversial marketing tactics while
educating students on the risks associated with buying on credit,
officials said.
At the University of Iowa, PIRG's Iowa campus
coordinator, Kathleen Cogan, stationed herself in the Iowa Memorial
Union on Wednesday and handed out consumer awareness literature and
"Don't be a Sucker" lollipops to students. She also asked students to
sign petitions in support of the U of I adopting new policies on credit
card marketing on campus.
Ed Mierzwinski of PIRG said the
organization wants colleges and universities to adopt a set of
principles that he said are intended to protect students. Those
principles would prohibit the use of gifts to encourage students to
sign up for new credit cards. The principles also would restrict credit
card companies' access to lists of students, increase financial
education for students and discourage certain lending practices that
result in interest rate increases unrelated to the students' credit
card usage.
"Those changes will put pressure on these companies
to change their practices more broadly as they apply to all consumers,"
Mierzwinski said.
If adopted, some of the proposals would have a
direct effect on the marketing now taking place in Iowa. For example,
Iowa State University has had a contract with Bank of America that
allows for free gifts - some bearing the university's name or logo - to
be used as incentives for applicants for new Bank of America credit
cards.
But John McCarroll, an ISU spokesman, said some of the
proposed principles, such as financial education for students, call for
policies that are in place at ISU. Others, such as restrictions on
access to student lists, would require a change in Iowa law, he said.
The
most immediate effect of the PIRG campaign could be on the credit card
companies that do not have long-term, revenue-sharing agreements with
schools and their alumni groups.
In Iowa City, for example, the
U of I guarantees the alumni association - and, by extension, Bank of
America - special access to U of I students, university supporters and
campus facilities. In return, the bank pays the alumni group roughly $1
million per year. Citibank has tried to solicit U of I students, but
that bank has done so by offering students free food at off-campus
restaurants in return for filling out a credit card application.
Mierzwinski
said PIRG's intent is not to limit the competition faced by credit card
companies that enjoy exclusive access to campuses because of their
revenue-sharing agreements. He said marketing by both the
school-approved companies as well as their competitors needs to be
reformed.
"Under no circumstances should an exclusive contract allow a company to market outside of the principles," he said.
The
American Council on Education, National Association of Student
Personnel Administrators and National Association of College and
University Business Officers also support the effort.
