Credit card issuers paid Colorado colleges $1 million during 2010

Credit card companies had paid the Colorado colleges and alumni groups a total sum of $1,042,643 during 2010, for having allowed them to market their products to college students in their campuses, as per the reports from the Federal Reserve.

The largest payment was received by the University of Colorado Foundation, where it received $550,000. The payment was made by the FIA Card Services, which was also formerly known as the MBNA America Bank.

However, credit card companies had paid the colleges and affiliated groups in the US much less money, when compared to 2009.

During 2010, $73 million was paid by the credit card issuers to colleges via marketing agreements. This is down by 14% from 2009, where they paid colleges $85 million, according to reports from the Federal Reserve. Last year, the marketing agreements with card companies had come down by 4% and only 1,004 institutions had drawn up the agreements when compared to 1,045 during 2009.

This drop in payments by credit card issuers to the college groups is largely due to the CARD Act of 2009, which put forth strict guidelines on the relationships that card issuers could have with the students. There have been a lot of changes after the Credit Card Accountability Responsibility and Disclosure Act of 2009 came into being. Now, card companies face a lot of restrictions and cannot market their products on college campuses or offer free gifts to entice students. As per the reforms brought about by the CARD Act, the card issuers cannot issue cards for those below the age of 21. If students below the age of 21 have to be issued credit cards, they will have to get someone to co-sign or show proof of income.

College groups are generally paid out a percentage of the amount that students charge on their cards issued by the card companies. This is done in exchange for allowing card issuers to promote their credit cards to the students.

Amongst the larger payments to college groups in Colorado by credit card issuers as per Fed Reserve data included:

• Association of Graduates of the US Air Force Academy alumni association (From USAA Savings bank - $110,000)
• University of Northern Colorado Alumni Association (From FIA Card Services - $100,000)
• Regents of the University of Colorado (From FIA Card Services - $89,439)
• University of Denver Alumni Association (From FIA Card Services - $60,000)

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