Gov. Pat Quinn of Illinois state signed into law a new measure that will further restrict how credit card companies get new clients on college campuses. Consumer advocacy groups have recently expressed dismay and alarm over the aggressive marketing strategies usually implemented by card issuers. College students are often the favorite clients of most card firms because of their perceived lavish spending and high-paying jobs in the future.
The state's Treasurer, Alexi Giannoulias, supported the passage of the measure into law, effectively curtailing some marketing practices considered by many as overly aggressive and deceptive. The law will also prohibit public and private colleges in Illinois from selling the names of their students and contact information to card companies. State officials say that the measure is expected to minimize the chances that college students will be approached by card issuers using information provided by their colleges and universities.
At present, schools receive considerable amounts from credit card firms in exchange for student names and contact details. Even alumni associations are also known for giving out information about college freshmen to financial institutions.
The new measure will also bar card issuers from giving out freebies in exchange for card applications. Supporters of the law say that card companies typically resort to deceptive practices and methods to lure students into signing up for a credit card. They argue that banks often give away free t-shirts, caps, and gas to get new cardholders to sign up.
Schools will also be required to offer consumer finance education for students if they decide to allow card companies to market on campus. Backers of the measure say that this will minimize the likelihood of freshmen racking up huge credit debt. College students currently owe more than $4,700 on average to card companies by the time they graduate. Card firms often target freshmen because they are expected to have better, high-paying jobs than other cardholders.
Consumer groups have hailed the new law, saying that it is a milestone for the rights of millions of cardholders across the U.S. The new measure comes ahead of the Obama administration's Credit Card Act of 2009, set to be implemented next year. The legislation will regulate many of the credit industry's practices to prevent abuses by card companies.
Illinois' measures have also garnered approval from many concerned parents who often have to shoulder purchases charged to their children's cards.