January 6, 2010
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News: Illinois Campus CC Law Protects Students
Illinois State Treasurer Alexi Giannoulias was the leader of the pack that enacted new state laws to protect young college students. The Credit Card Marketing Act is aimed at cracking down on deceptive practices by card companies on university and college campuses. The new law became effective on January 1st bans credit card companies from entering college campuses and from offering free gifts to lure students into signing card contracts. In the past, lenders have offered free giveaways such as T-shirts, blankets, electronics, or pizza coupons to students just for applying for cards. In a statement released by Giannoulias, he said that many young adults become victims of credit cards because they lack the necessary knowledge to manage their finances. As a result, these individuals are buried in debt for years.
According to Giannoulias, several state universities have been proactive in implementing measures that would rein in credit card companies and reduce their deceptive marketing strategies; however, lenders found more creative ways to exploit students. Lenders found loopholes in the universities policies by continuing to offer the free food coupons but requiring them to complete the application process off-campus. The new law will ban this practice as well. The new law will also prohibit all Illinois universities and colleges from making agreements to give or sell student contact information to credit card companies. Additionally, if the school has a contract with any lender to market their card, the school is required to provide free financial management education to students.
The Illinois law goes hand in hand with the nation's new credit card reform law that becomes effective on February 22nd. The CARD Act prohibits lenders from issuing a card to any individual under the age of 21 has proof of income to repay the debt or without a parent or responsible co-signer. The state's goal was not to ban card marketing totally from university and college campuses, but rather to make it a fairer playing field for students.