(TRENTON) – Bipartisan legislation sponsored by Assemblywomen Celeste Riley and Connie Wagner to prevent credit card companies from preying on college students is now law.
“This law will 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 law will help curb that likelihood.”
The law (A-1688) prohibits 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.
“Many students are struggling to get by financially while putting themselves through college so the allure of credit cards can be very tempting,” said Wagner (D-Bergen/Passaic). “The last thing they need are credit companies preying on their vulnerability, especially with the excessively high interest rates they often offer.”
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.
The sponsors 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 law goes into effect 30 days after enactment.