overnor Pat Quinn joined with Treasurer Alexi
Giannoulias to sign a bill seeking to halt predatory credit card
marketing practices on Illinois college campuses.
“This
legislation cracks down on greedy marketing ploys aimed at getting
students to sign up for a credit card while attending college,” Governor
Quinn said. “This law will put an end to the gimmicks and trickery used
to entice young people into taking on more consumer debt than they can
handle.”
The Credit Card Marketing Act was drafted by Treasurer
Giannoulias and promotes responsible credit card marketing at Illinois
colleges and universities. The legislation bans free gifts and makes
contracts between the credit card providers and schools open to the
public.
The legislation prohibits the transfer or sale of student
names and contact information to credit card issuers. It also requires
colleges and universities to offer consumer finance education to
freshmen if credit cards are marketed to undergraduates.
Credit
card companies use free gifts, coupons and food to entice cash-strapped
college students into applying for credit cards, which often carry low
introductory rates but also have hidden fees and high default interest
rates. At colleges and universities that voluntarily banned credit card
marketing, credit issuers would lure students off campus with free
sandwich coupons but require them to fill out a credit card application
before they could eat.
“I commend Governor Quinn for signing this
legislation which opens up credit card marketing practices and contracts
to public scrutiny,” Giannoulias said. “Too often, credit card offers
are not what they seem. A free gift or lunch today can cost a student
hundreds of dollars in interest years later. These marketing schemes can
result in even more debt before students graduate and enter the ‘real
world’.”
This new law coincides with a national effort to rein in
predatory credit card tactics under the federal Credit Card Bill of
Rights. As of February 2010, no one under age 21 can get a credit card
unless a parent, guardian or spouse is willing to co-sign or unless the
underage person has proof of sufficient income to cover credit
obligations.
The Credit Card Marketing Act was sponsored by Sen.
Donne Trotter (D-Chicago) and Rep. Kevin Joyce (D-Chicago). Several
schools and consumer advocates also supported the legislation, including
the Federation of Independent Illinois Colleges & Universities,
University of Illinois, U.S. Public Interest Research Group and Consumer
Credit Counseling Services of Greater Chicago.
