Institutions of higher learning are offering fewer co-branded cards to students, continuing a trend, according to a report from the Consumer Financial Protection Bureau.
The report finds that in 2019 the number of total agreements in effect, as well as the number of accounts open under the agreements, continued a general trend of decline. Overall, between 2009 and 2019 the number of agreements in effect, year-end open accounts, and payments by issuers all declined by more than two-thirds. There were 1,045 agreements and just over 2.04 million open accounts in 2009 compared to 220 agreements and 608,117 open accounts in 2019. Total payments were $84.5 million in 2009 compared to $22.4 million in 2019. The number of issuers has increased in that time, to 35 from 18.
The downward trend in agreements seems likely to continue based on early 2020 numbers. Of the 220 agreements represented by issuers’ submissions for 2019, 49 were marked as having been terminated at some point during the course of the year, representing 22 percent of all 2019 agreements.
Terminated agreements represented only about 52,000 open accounts, or just under 9 percent of all accounts open as of year-end 2019, and only about $800,000 in payments, less than 4 percent of payments by issuers.
Agreements with alumni associations continue to represent the large majority of agreements (124), accounts (421,137) and payments by issuers ($17.5 million).
Bank of America held the most agreements (69), accounts (414,912), payments by issuers ($11.6 million) and new accounts opened (17,280) in 2019.
Although credit card issuers were allowed some leeway in submitting information due to pandemic constraints, the agency said information collected was comparable to normal years. The CFPB “does not believe that complete data would result in findings that deviate substantially from those outlined in this report.”
The Credit Card Accountability, Responsibility, and Disclosure Act requires credit card issuers to submit annual reports to the CFPB with information on their agreements with institutions of higher education, or certain affiliated organizations such as fraternities or alumni associations. The bureau then publishes the information in a report.
The 2009 CARD Act was implemented by the Federal Reserve Board, but jurisdiction moved to the CFPB in July 2011. This is the eighth annual report submitted by the CFPB.