By Moore, Michael O'd.
American Banker , Vol. 162
Legislation has been introduced in two states to limit how credit card companies market on public college campuses.
Card issuers have homed in on college-age consumers in recent years. The market research firm Claritas Inc. estimates that 67% of college students now carry cards, up 24% since 1990. The firm also found that the average balance of those cardholders grew 134%, from $900 in 1990 to $2,100 in 1995.
The bills pending in Massachusetts and New York are the only ones in the country dealing with this issue, observers said.
In Massachusetts, the Education, Arts, and Humanities Committee unanimously recommended passage of a bill to mandate the development of formal rules for the marketing of credit cards at all public colleges and universities.
State Rep. Harold M. Lane Jr., a Democrat, chairman of the committee, wants the distribution of approved consumer-education materials together with any marketing promotions on campus to be a matter of law.
Rep. Lane said he introduced the bill because students don't know how to manage debt and card marketers often fail to distribute meaningful educational information.
"If they would police themselves," he said, it would be all right, "but there's such a proliferation of credit cards out there."
Rep. Lane said he's seen excellent educational materials, such as some MasterCard information he reviewed, but it doesn't always reach students. "We really need legislation to ensure it happens."
There is no lack of stories of students getting caught under crushing debt, he said. Since he introduced the bill, Rep. Lane said, that notion has been bolstered by "tremendous positive reaction from parents whose kids had gone into debt." He said the office of U.S. Rep. Joseph P. Kennedy 2d contacted him about the bill and about setting up a meeting with Rep. Kennedy concerning details. "Apparently it is an important enough issue that it's getting attention nationally," Rep. Lane said. "The amount of credit card debt is huge."
A spokeswoman for Rep. Kennedy confirmed that he is interested in the issue but said a credit card bill he plans to introduce soon will not contain any provisions aimed specifically at colleges. …