Senators Corker, Feinstein Amendment to Credit Card Legislation Helps Protect College Students

May 19, 2009 -- WASHINGTON – U.S. Senator Bob Corker (R-Tenn.), a member of the Senate Banking Committee, today voted in favor of H.R. 627, legislation that strengthens oversight of the credit card industry. The bill, which passed the Senate by a vote of 90-5, includes an amendment sponsored by Corker and U.S. Senator Diane Feinstein (D-Calif.), which places restrictions on marketing credit cards to college students.

“Far too often young adults don't read the fine print of credit card offers and rack up huge debts that follow them throughout life. As a father of two daughters in college, I’m constantly making sure my girls aren’t signed up for any of the many credit card offers targeting college students,” Corker said. “This amendment reforms credit card marketing practices aimed at college students so that the terms are fair, transparent, and more easily understood by the consumer. It would also commission a study to fully examine the problem of student credit card debt so we can help make sure these young Americans aren’t burdened and hampered by excessive debt.”

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“Colleges should not be encouraging their students to sign up for products with high interest rates and fees that can get them bogged down in debt. Young consumers often do not have the knowledge and experience to manage their credit wisely and as a result can get into deep financial trouble that can stay with them for decades,” Feinstein said. “This amendment installs common-sense restrictions to protect college students and all young consumers from deceptive practices.”

The amendment helps protect students from common credit traps by:

Prohibiting credit card companies from offering gifts to students in exchange for completing credit card applications;

Requiring universities to publicly disclose marketing agreements made with credit card issuers;

Requiring credit card companies to report how much money they are giving to schools and alumni associations through these agreements and what they receive from the universities in exchange; and

Calling upon the Government Accountability Office to study the extent of these deals and the overall impact on student credit card debt.

Source: Senator Bob Corker