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Dayton Business Journal...
Colleges collect less
from credit card deals
by Ginger Christ, DBJ Staff Report
Date Monday, July 18, 2011
Credit card companies paid U.S. colleges less money last year for
allowing them to market to students on campus.
In 2010, credit card issuers paid $73 million to colleges through
marketing agreements, down 14 percent from $85 million in 2009,
according to a Federal Reserve report. And only 1,004 institutions had
marketing agreements with credit card companies last year, down 4
percent from 1,045 in 2009.
Click here to search online database of all 1,004 payments to colleges
nationwide.
The drops come on the heels of the The Credit Card Accountability
Responsibility and Disclosure Act of 2009 (Credit CARD Act), which put
more stringent guidelines on the relationships credit card companies
could have with students. That resulted in fewer students whipping out
their Visa or MasterCard each time they go to the local watering hole.
The credit card companies generally pay colleges a percentage of the
amount students at that school charge on cards issued by the credit
card firms in exchange for being able to come to campus and promote
their credit cards with giveaways and such.
In the Dayton region, the three institutions or related groups that
received payments from credit card issuers last year all saw lesser
payments than in 2009.
Several Miami University fraternities and sororities received $163,000
in 2010, a 24 percent decrease from 2009; the University of Dayton
received $110,075, which was less than a 1 percent drop from the
previous year; and Wright State University ’s alumni association
received $27,000, down 4 percent from 2009.
However, despite losses, payments to UD and Miami were above the
national average of $73,000.
UD officials said their agreement is for an alumni affinity card, and
the royalties go to the University of Dayton National Alumni
Association to fund student scholarships.
Susan Smith, executuve director of Wright State alumni relations, said
the alumni association, which is funded independent of the university,
uses the money earned from its affinity cards to fund special events
and programming for alumni.
Of the 28 colleges, universities, alumni associations and foundations
in Ohio with marketing agreements, the University of Cincinnati
received the largest payment, taking in $303,000 from FIA Card Services
. Nationwide, The Penn State Alumni Association received the most with
$4.3 million in payments from FIA Card Services.
However, many universities and associations terminated credit card
agreements last year. For example, Ohio Dominican College in Columbus
cut its agreement.
FIA Card Services, which was the top lender locally, doled out the most
in payments in 2010, paying $55.6 million through 848 agreements.
Of the banks with a local presence, New York, N.Y.-based JPMorgan Chase
& Co. paid $9.2 million through 28 agreements; Minneapolis,
Minn.-based U.S. Bancorp paid $1.9 million through 54 agreements; and
Pittsburgh-based PNC Financial Services Group paid $200,000 through two
agreements.
GE Money, which is part of General Electric Co. and has 1,700 workers
in Kettering, paid $1.5 million through two agreements.
Several financial institutions added agreements last year. UMB
Financial Corp. added 17 agreements last year and Capital One added
nine agreements.
Read it at Dayton Business Journal
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