November 27, 2009
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News: NJ Credit Card Legislation
New credit card reform legislation will soon restrict lender's activities on college campuses across the country. In light of the fact that these new rules will soon begin in February, some states believe the rules are not comprehensive enough. Several states have taken action themselves to implement tighter credit card regulation on campuses within their own state boundaries. The latest state to jump on new laws to protect their youth is New Jersey. New Jersey students will be seeing some changes on campus as new regulations will limit credit card companies' abilities to market their products on campus.
Governor Jon Corzine signed new legislation last Friday that prohibits colleges and universities from selling students' names and addresses to credit card companies. Additionally, the new law bans lenders from offering students special teaser gifts to entice them into applying for new card accounts. Furthermore, credit card companies will now be required to register with the college or university if they want to market their card products on New Jersey college and university campuses. Additionally, lenders are now required to provide credit education courses that will aim to teach students how to be prudent money managers and to learn how interest is calculated. Lastly, lenders will not be able to initiate collection activities against the student's if the student gets into trouble with debt. The exception would be if the parent agreed in writing that they would be responsible for the student's debt.
The state Division of Consumer Affairs will be in governing agency responsible for enforcing the new credit card rules on New Jersey's college and university campuses. Lenders who are in violation of the law will face up to $10,000 in penalties for the first offense and $20,000 for subsequent violations. Advocates for the protection of students and their parents support the new law. Recent statistics indicate that the average college graduate has over $4,000 in card debt on his graduation day not to mention thousands of dollars in student loans.