CHICAGO – August 11, 2009. Governor Pat Quinn joined with Treasurer Alexi Giannoulias to sign a bill seeking to halt predatory credit card marketing practices on Illinois college campuses.
“This legislation cracks down on greedy marketing ploys aimed at getting students to sign up for a credit card while attending college,” Governor Quinn said. “This law will put an end to the gimmicks and trickery used to entice young people into taking on more consumer debt than they can handle.”
The Credit Card Marketing Act was drafted by Treasurer Giannoulias and promotes responsible credit card marketing at Illinois colleges and universities. The legislation bans free gifts and makes contracts between the credit card providers and schools open to the public.
The legislation prohibits the transfer or sale of student names and contact information to credit card issuers. It also requires colleges and universities to offer consumer finance education to freshmen if credit cards are marketed to undergraduates.
Credit card companies use free gifts, coupons and food to entice cash-strapped college students into applying for credit cards, which often carry low introductory rates but also have hidden fees and high default interest rates. At colleges and universities that voluntarily banned credit card marketing, credit issuers would lure students off campus with free sandwich coupons but require them to fill out a credit card application before they could eat.
“I commend Governor Quinn for signing this legislation which opens up credit card marketing practices and contracts to public scrutiny,” Giannoulias said. “Too often, credit card offers are not what they seem. A free gift or lunch today can cost a student hundreds of dollars in interest years later. These marketing schemes can result in even more debt before students graduate and enter the ‘real world’.”
This new law coincides with a national effort to rein in predatory credit card tactics under the federal Credit Card Bill of Rights. As of February 2010, no one under age 21 can get a credit card unless a parent, guardian or spouse is willing to co-sign or unless the underage person has proof of sufficient income to cover credit obligations.
The Credit Card Marketing Act was sponsored by Sen. Donne Trotter (D-Chicago) and Rep. Kevin Joyce (D-Chicago). Several schools and consumer advocates also supported the legislation, including the Federation of Independent Illinois Colleges & Universities, University of Illinois, U.S. Public Interest Research Group and Consumer Credit Counseling Services of Greater Chicago.