NEW YORK (AP) — Colleges, alumni associations and related groups were paid $83.5 million last year under agreements with credit card companies.
There were 1,004 such agreements in 2009, according to a Federal Reserve report released Monday.
The agreements vary, but may have been to issue cards bearing a school's name or to allow issuers to market to the school's students. Schools and affiliated groups were generally paid for each account opened under the agreements.
Of the agreements reported, about 40% were with colleges and 33% were with alumni associations. The rest were with foundations and other organizations affiliated with universities.
The agreements resulted in the opening of about 53,200 accounts last year. In total, the issuers reported having about 2 million accounts open under such agreements.
The report does not specify how many accounts were opened by students; some or all may have been opened by alumni or faculty, the Fed notes. The report also does not include credit card accounts opened by students independent of the agreements.
The three agreements that resulted in the largest number of credit card account openings were with:
- The Penn State Alumni Association at 1,600 account openings. The association was paid $2.8 million by the card issuer FIA Card Services, a unit of Bank of America Corp.
- The Harvard Alumni Association at about 1,300 account openings; the group was paid $1 million by Barclays Bank.
- The Alumni Association of the University of Michigan at about 900 account openings; the group was paid $1.5 million by FIA Card Services.
The disclosures were required under the sweeping credit card legislation that went into effect this year. Credit card issuers will be required to submit the details of such agreements annually to the newly created Bureau of Consumer Financial Protection.
Three issuers accounted for the vast majority of the agreements, according to the Fed report. FIA Card Services accounted for 87% and U.S. Bank National Association ND and Chase Bank together accounted for about 10% of the agreements.
The Fed also created a website to find out about any school's agreement with credit card issuers. For example, a search for "Rutgers" shows that the Rutgers University Alumni Federation received $500,000 from U.S. Bank National Association last year for the 851 accounts opened under its agreement.
Some agreements include payments to schools for the opening of other products, such as deposit accounts.
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