College credit card agreements have dropped almost 70% since Congress passed new disclosure rules in 2009, according a Consumer Financial Protection Bureau annual report released Monday.
In 2009 there were 1,045 agreements in effect compared to 336 agreements at the end of 2013, the CFPB said.
Credit card issuers paid more than $84 million to colleges and universities in royalties and bonuses for agreements in 2009, which has declined to approximately $43 million in 2013, the report revealed.
“Today, financial institutions are cutting more deals with colleges and universities to market student banking products that require less disclosure,” CFPB Director Richard Cordray said. “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.”
The CFPB said colleges and financial institutions are moving away from credit cards toward alternatives such as debit cards and prepaid cards.
According to the CFPB report, many colleges with credit card agreements have not made them publicly accessible to students and families.
In the past, the CFPB has falsely accused some credit unions on failing to disclose the terms of agreements.
After reviewing 35 college and university websites, the CFPB claimed to have found 80% do not post their agreements or information about how to request them on their websites.
Under the Credit Card Accountability, Responsibility, and Disclosure Act, issuers are required to disclose the terms and conditions of any college credit card agreement to the CFPB as well as the number of new credit card accounts, and the amount issuers paid colleges in the prior year.
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