Lawmakers to review B of A pitch
Posted on September 29, 2007
Filed Under Investigation, Students Credit Cards | Leave a Comment
Iowa legislators will be investigating the state universities’ promotion of Bank of America credit cards.
The Joint Legislative Oversight Committee will hold hearings Oct. 29-30 on the schools’ marketing of university-themed credit cards to students. The Des Moines Register earlier this week, reported that the cards raise millions of dollars for the schools’ privately run alumni organizations, but are promoted by the public universities themselves.
The University of Iowa has agreed to promote the Bank of America cards by giving the biggest spending cardholders exclusive access to university facilities, employees and even student athletes. The school’s contract with the alumni indicates cardholders who accumulate enough points are entitled to private, 90-minute meetings with coaches as well as meals with student athletes.
The U of I has also agreed to give Bank of America, through the alumni, access to databases that include the mailing addresses, telephone numbers and e-mail addresses of students and parents.
The Board of Regents, which oversees the state’s three public universities, is now looking into the situation.
“I find it deplorable that schools are facilitating on-campus marketing aimed directly at students who have limited income and are struggling with debt from student loans,” said Sen. Tom Courtney, D- Burlington, who is co-chair of the legislative Oversight Committee.
“I am very concerned about adding to students’ mounting debt with university participation in these exclusive contracts that provide incentives to a university,” said Rep. Vicki Lensing, D-Iowa City who is co-chair of the committee. “Our colleges’ first priority should be their students, not their alumni fundraising efforts.”
Although the lawmakers’ investigation is being billed as “in conjunction with the attorney general’s investigation,” Iowa Attorney General Tom Miller has not committed to any investigation of the university-sanctioned Bank of America arrangements.
Miller has said his office will look into the unrelated actions of a competing credit card provider, Citibank. At campuses throughout the United States, Citibank’s marketing has come under fire.
At the University of Iowa and other schools, Citibank’s marketing representatives have posted fliers on campus, offering students free food at local restaurants. When students show up to claim their food, they are told – allegedly for the first time – that they must fill out a Citibank credit card application.
The Ohio attorney general is taking Citibank to court over those tactics. Citibank officials say that the alleged solicitations were not approved or endorsed by the company.
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