CFPB Reports on Credit Card Agreements and Warns Colleges of Potential CARD Act Violations

CFPB CARD Act

On December 16, the CFPB issued its annual report to Congress regarding credit card marketing agreements between colleges and issuing credit card organizations. Pursuant the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act, credit card issuers must disclose the details of those agreements to the CFPB, and colleges and universities are required to publicly disclose their marketing agreements, either by posting the actual contracts to their websites or by posting the information needed to request a copy of the agreement and subsequently providing a copy to the requestor. According to the report, a review of 25 sample colleges with active credit card agreements determined that “most institutions of higher education [did] not make copies of [the] agreements available on their websites to students and other affected parties.” The CFPB further noted that “[w]ith only rare exceptions, [the] institutions also fail[ed] to provide alternative reasonable means of access to those agreements.” In light of its findings, the CFPB sent a letter to the 17 colleges that may not have adequately disclosed a credit card agreement. The letter explained that the school received the notice because its marketing agreement with a card issuer “could not be publicly obtained using reasonable procedures and in a reasonable timeframe.” While the CFPB’s letter stated that it had yet to determine if the schools’ inaction violated the CARD Act, it urged the recipient schools to “reconsider [their] approach to public disclosure.”