It's getting harder for credit-card companies to get accepted at the nation's colleges.
The number of agreements giving credit-card issuers the right to market their cards to students and graduates of U.S. universities fell 21 percent to 798 in 2011. Also falling from the previous year were the payments by credit-card issuers to higher-education institutions, alumni groups and foundations, as well as the number of new accounts opened through the relationships.
The U.S. Consumer Financial Protection Bureau, in a new report, said the number of new accounts opened through colleges, alumni groups and foundations dropped 7 percent to 43,010 in 2011.
One notable exception was the University of Illinois Alumni Association's credit-card agreement, struck in 2010, with the University of Illinois Employees Credit Union. Under that deal, 3,452 new accounts were opened in 2011, more than any other between a credit-card issuer and college group. The credit union paid $750,000 to the alumni group for the rights to the marketing deal.
Nationwide, payments by issuers to colleges dropped 15 percent year over year to $62 million. The top issuers were FIA Card Services, part of Bank of America; U.S. Bank; and Capital One.
The overall declines, which have occurred for two straight years, are attributed at least in part to the 2009 Credit Card Accountability Responsibility & Disclosure Act. The CARD act restricts such practices as doling out gifts to encourage students to apply for cards on campus. It also requires credit-card issuers to annually disclose the agreements.
The most lucrative agreement went to the Penn State Alumni Association, which got $2.7 million from the Bank of America unit. Rounding out the top 10 were the Alumni Association of the University of Michigan; the University of Southern California; the University of Tennessee; the California Alumni Association; the University of Arizona Alumni Association; the General Alumni Association of the University of North Carolina at Chapel Hill; the University of Georgia Foundation; the Association of Former Students of Texas A&M University; and Yale University, which got $1.1 million.
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