[Congressional Record Volume 155, Number 65 (Thursday, April 30, 2009)]
[Extensions of Remarks]
[Pages E1035-E1036]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             CREDIT CARDHOLDERS' BILL OF RIGHTS ACT OF 2009

                                 ______
                                 

                               speech of

                          HON. THOMAS E. PETRI

                              of wisconsin

                    in the house of representatives

                       Wednesday, April 29, 2009

       The House in Committee of the Whole House on the State of 
     the Union had under consideration of the bill (H.R. 627) to 
     amend the Truth in Lending Act to establish fair and 
     transparent practices relating to the extension of credit 
     under an open end consumer credit plan, and for other 
     purposes:

  Mr. PETRI. Mr. Chair, I am disappointed that Congressman Murphy and I 
will not have the opportunity to offer our amendment to the Credit 
Cardholders' Bill of Rights Act which would require credit card 
companies to report on marketing agreements with institutions of higher 
education and alumni associations. The amendment also would direct the 
Government Accountability Office to analyze and report to Congress the 
impact of these arrangements on student credit card debt. To that end, 
today we will be introducing this amendment as a stand-alone bill, the 
Student Credit Card Transparency Act of 2009.
  According to a recent study, students are now graduating with an 
average credit card debt of more than $4,100, up from $2,900 just four 
years ago. The average number of cards per student has grown to 4.6, 
with over half of college students reporting they have four or more 
cards. The combined impact of credit card debt and growing student loan 
debt can greatly limit a student's future career choice. Furthermore, 
compounding debt from late payments and high penalties can further 
jeopardize a young person's financial future by making it difficult to 
take out their first mortgage, buy a car or even rent an apartment.
  As I'm sure we all know through our own experiences or through our 
children's, college students have become prime targets for credit card 
marketing campaigns. Most students enter college without a credit card 
and are quickly saturated with e-mails, direct mailings and on-campus 
solicitations to sign up for their first credit card. A recent report 
by the U.S. Public Interest Research Group revealed that, of the 
students they surveyed, 80 percent said they had received mail from 
credit card companies. Students reported receiving an average of nearly 
five mailed solicitations per month. In addition, 22 percent of 
students reported receiving an average of nearly four phone calls per 
month from credit card companies.
  While the practice of targeting college students may not be much of a 
surprise, students and parents may be alarmed to learn that many 
colleges, universities and alumni associations have entered into 
lucrative agreements with these companies to allow exclusive marketing 
of their cards. In these arrangements, schools receive large cash 
payments in exchange for handing over their students' contact 
information--such as address, e-mail address, and telephone numbers. 
These confidential agreements may also go further and give companies 
exclusive face-to-face access to students on campus, such as during 
sporting events or at the student union. Some provide the university or 
alumni with additional money based on a percentage of purchases using 
the card.
  Despite the fact that hundreds of schools throughout the country have 
such arrangements, very little is known about them. Last year's ``pay 
to play'' scandal in the guaranteed student loan program exposed the 
practice of lenders and financial aid administrators putting their own 
interests ahead of their students' when it came to compiling their 
``preferred lender list.'' While arrangements between credit card 
companies and schools don't necessarily mean the student's financial 
interests are being harmed, I believe it is imperative to have at a 
minimum a better understanding of these arrangements. For instance, are 
schools and associated foundations making arrangements with companies 
that offer the best rates for their students?
  This bill simply seeks greater transparency by requiring credit card 
companies to report these arrangements. Then Congress, students and 
parents will be able to judge whether these agreements reflect the best 
interests of students or that of the school or related institution.
  I am happy to have the support of the United States Students 
Association, USPIRG, Consumer Federation of America, National 
Association of College Admissions Counselors, and the American 
Association of Collegiate

[[Page E1036]]

Registrars and Admissions Officers and want to thank Congressman Murphy 
for his work on this important bill.

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