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CFPB Releases Seventh Annual Report to Congress on College Credit Card Agreements

The CFPB has released its seventh annual report to Congress on college credit card agreements.  The annual report is mandated by the CARD Act.

The CARD Act requires mandatory reporting to the CFPB by card issuers on agreements with institutions of higher learning or certain affiliated organizations (such as alumni associations).  The information in the report is current as of the end of 2017.

In its report on 2016 data, the Bureau abandoned its prior practice of including in the annual report not only the information on college credit card agreements mandated by the CARD Act but also information on other financial products marketed to students such as debit cards.  Like the Bureau’s report on 2016 data, the new report discusses only college credit card agreements.

The CFPB’s findings based on the agreements and related information that issuers are required to submit annually to the CFPB include:

  • Reversing a trend that began in 2009, the number of college credit card agreements between issuers and schools or affiliated organizations increased in 2017.  The number of issuers maintaining at least one such agreement also increased.  However, the total number of associated credit card accounts and the amount paid by issuers to schools and affiliated organizations continued to decline.
  • Agreements between issuers and alumni associations remained the dominant college credit card agreements.
  • The share of the overall market held by the ten largest agreements as measured by each of the three metrics of agreement size—year-end open accounts, new accounts, and payment volume—stayed at or near 2016 levels, with the ten most lucrative agreements representing 41% of all payments made by issuers in 2017.

Under former Director Cordray’s leadership, the CFPB used the annual report as an opportunity to take schools to task for allegedly not meeting their obligation under the CARD Act to publicly disclose their college credit card marketing agreements (which, pursuant to the Official Commentary to Regulation Z, can be fulfilled by either posting the agreements on a school’s website or by making the agreements available on request, as long as the procedure for requesting the documents is reasonable and free of cost.)   The new report, like the Bureau’s report on 2016 data, makes no mention of this issue.

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Culhane, Ballard, Partner
Partner

John L. Culhane, Jr., is known for his work advising on interstate direct and indirect consumer and residential mortgage loan and leasing programs, through both traditional brick-and-mortar facilities and e-commerce. Before joining Ballard Spahr, Mr. Culhane was associate counsel with Mellon Bank, N.A.; associate counsel with Bank of America NT&SA; and senior attorney (section chief) with the National Credit Union Administration, the federal agency regulating federal credit unions.

Mr. Culhane addresses issues involving licensing,...

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