Credit card firms paid 1.18 million dollars in 2009 to colleges in virginia

Credit card issuers have reportedly paid an amount 1.18 million dollars last year to 44 colleges in Virginia, associated groups and alumni associations in order to win the right to market their credit cards to the students of those colleges. In exchange for this amount, the organizations entered into an agreement to provide the banks with listings of mail and telephone solicitations along with the right to set up tables for promotion on the college campus.

Although, the settlement differed from one card company to another, the organizations on an average received massive amounts as advances on the royalties for each new credit card account opened. There were also bonuses for some of the groups for loan balances outstanding on the credit card accounts. As per a report of the Federal Reserve that was released last week, as a result of inspecting as many as 1044 agreements across the nation, the total settlement amount turned out to be 83.46 million dollars, between the institutions and organizations with the credit card issuers. This report was the first of its kind as per the requirements of the Credit CARD Act of 2009, which mandates greater transparency of settlements between the credit card companies and the college groups to market the credit card accounts to students on the campus. The contracts in Virginia were made with foundations of public colleges as well as alumni associations and also directly with the private institutions. The University of Richmond also received about 89,773 dollars from Bank of America Corp.’s subsidiary called FIA card services. The contract expired this June and it was agreed that the university will provide the card issuer with marketing information on the staff, alumni, faculty and also the students.

The College of William and Mary Alumni Association received a decent amount of 340,000 dollars that was highest in the state last year. This money received by college is considered to be a good revenue stream. These amounts are sometimes used for organizing events for the students and the alumni. The FIA Card Services also entered into an agreement with the James Madison University alumni association by paying an amount 125,000 dollars. However, only the alumni mailing lists are there and there haven’t been any students’ solicitations. The company also paid amounts of 30,000 dollars and 70,439 dollars to the Washington and Lee University and to the alumni association of George Mason University respectively.