Bipartisan legislation sponsored by Assemblywoman Celeste Riley to prevent credit card companies from preying on college students was approved by an Assembly panel on Monday.
“This bill would protect many unsuspecting college students from the predatory practices often employed by credit card companies,” said Riley (D-Cumberland/Gloucester/Salem. “College students are often unaware of the consequences of bad credit and many more don’t realize the exorbitant interest rates they’re charged. In many cases, students end up graduating more in debt to credit cards than student loans. This bill would help curb that likelihood.”
The bill (A-1688) would prohibit a public institution of higher education in New Jersey from entering into an agreement, or permitting its agents or a student organization from entering into any agreement, for the purposes of the direct merchandising of credit cards in person or by displays to students.
Recent news stories have highlighted how colleges have received hefty sums in marketing dollars from credit card companies, like the country’s biggest earner, Penn State, which took in $4.2 million in 2010.
Riley noted that regulators and consumers are paying increased attention to credit card companies’ attempts to solicit business from college students. While the 2009 Federal Credit Card Accountability, Responsibility and Disclosure Act of created a number of restrictions on credit card activity on college campuses, it left several loopholes, one of which, this bill would address.
The bill was unanimously approved by the Assembly Higher Education Committee, which Riley chairs, and now awaits consideration by the full Assembly. The law would go into effect 30 days after enactment.