The Credit Card Accountability, Responsibility, and Disclosure Act ("CARD Act" or "Act") requires the Bureau of Consumer Financial Protection (the "Bureau") to submit to Congress, and to make available to the public, an annual report that lists information submitted to the Bureau concerning agreements between credit card issuers and institutions of higher education or certain organizations affiliated with such institutions in connection with the issuance of credit cards. This report refers to these agreements as "college credit card agreements" or simply "agreements." Affiliated organizations include fraternities, sororities, alumni associations, or foundations affiliated with or related to an institution of higher education.
This is the ninth annual report pursuant to the CARD Act. The Federal Reserve Board ("Board") submitted the first two reports. Pursuant to title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 ("Dodd-Frank Act"), responsibility for collecting data and submitting to Congress annual reports regarding college credit card agreements transferred from the Federal Reserve Board to the Bureau on July 21, 2011. The Bureau has since submitted six reports.
The regulations implementing section 305 of the CARD Act require credit card issuers to submit to the Bureau each year the terms and conditions of any college credit card agreement that was in effect at any time during the preceding calendar year between an issuer and an institution of higher education. The same requirement applies to agreements between an issuer and an affiliated organization of the institution, such as an alumni organization or a foundation associated with the institution.6 All such institutions and affiliated organizations are referred to as "educational or affiliated entities," or simply "entities," throughout this report.
Issuers are required to submit the following information with respect to each such agreement:
The Bureau makes public all agreements submitted to the Bureau and a dataset containing all data submitted by issuers regarding agreements, both from the current year and from past years. Appendix A provides more information on how to access and interpret that dataset. Institutions of higher education are also required to make agreements available to the public.
The CARD Act requires the Bureau each year to submit to Congress and make publicly available a report on the information and documents provided by card issuers, including the number of new accounts opened pursuant to agreements between card issuers and educational or affiliated entities and the compensation paid by issuers to these entities. 10 This report is based on the information and agreements submitted to the Bureau by credit card issuers, which provide data current as of the end of 2017. Information included in this report also is available on the Bureau's public website at www.consumerfinance.gov.
The Bureau received 264 college credit card agreements from 40 credit card issuers for 2017. This section of the report presents data about these agreements and compares that to data for earlier years.
FIGURE 1: TRENDS IN ISSUER-REPORTED METRICS (INDEXED TO 100% IN 2009)
Figure 1 presents a summary of these data. It shows that in each year from 2009 through 2016, there were consistent declines in: (a) the number of college credit card agreements; (b) the total number of associated credit card accounts open at year-end; and (c) the amount paid by issuers to institutions and affiliates. While the latter two trends persisted into 2017, the first trend reversed, with the number of agreements increasing (albeit only slightly) for the first time since these data were first collected by the Board.
Forty issuers were parties to such agreements in effect in 2017, an increase of two over 2016. This continues the trend since 2012 of the total number of issuer participants in this market increasing. There were also significantly more new accounts in 2017 than in any previous year. As noted in past reports, the number of new accounts each year has fluctuated over the period these data have been collected in a manner that appears uncorrelated with other indicators of this market's overall size.
Bank of America's subsidiary, FIA Card Services, remains the largest issuer in this market, as it has every year since these data were first collected by the Board. However, Bank of America's share of the market is declining significantly, with its share of all agreements, open accounts, and payments all falling relative to 2016. Its share of agreements fell to 29% from 32%; its share of open accounts fell to 71% from 76%, and its share of payments fell to 64% from 69%. Bank of America's position nevertheless remains dominant, especially by the latter two metrics. Four other issuers were party to more than 20 agreements each in 2017, but those issuers collectively represented only 8% of the total accounts and 17% of the total payments made by Bank of America.
Overall, 40 issuers submitted their agreements to the Bureau for 2017. Each issuer's aggregate metrics are in Table 1 below. Four issuers that submitted agreements in 2017 did not submit agreements in 2016. The new issuers in the 2017 submission are American Trust & Savings Bank, Central Bank & Trust Co., Chief Financial Credit Union, and New Mexico Bank & Trust. These four issuers accounted for four agreements, 343 accounts, and $38,186 in payments to institutions and their affiliates. Two issuers exited the market: Comenity Capital Bank and Discover Bank. These two issuers accounted for two agreements, 143 open accounts, and $157,142 in payments in 2016.
TABLE 1: REPORTED METRICS WITH COLLEGE AGREEMENTS IN EFFECT IN 2017, BY ISSUER
Agreements in effect
Year-end open accounts
American Trust & Savings Bank
Apple Federal Credit Union
Banco Popular de Puerto Rico
Banco Santander Puerto Rico
Bank of America
Boeing Employees' Credit Union
Carolina Trust Federal Credit Union
Central Bank & Trust Co.
Chief Financial Credit Union
Christian Community Credit Union
Farmers & Merchants State Bank
First Interstate Bank
First National Bank of Omaha
Georgia's Own Credit Union
Goldenwest Federal Credit Union
Harvard University Employees Credit Union
MIT Federal Credit Union
Mountain America Federal Credit Union
New Mexico Bank & Trust
Oregon Community Credit Union and OCCU Card Services, LLC
Pen Air Federal Credit Union
Pennsylvania State Employees Credit Union
ProFed Federal Credit Union
Purdue Federal Credit Union
Stanford Federal Credit Union
Texas Trust Credit Union
The Southern Credit Union
U.S. Bank National Association ND
University Credit Union
University First Federal Credit Union
University of Illinois Employees Credit Union
University of Wisconsin (UW) Credit Union
USAA Savings Bank
USC Credit Union
USF Federal Credit Union
Wright-Patt Credit Union
As reflected in Table 1, issuers submitted a total of 264 college credit card agreements for 2017.
Of these, 30 were entered into in 2017. Thirteen issuers accounted for these new agreements. Overall, there was a net increase of eight agreements in effect in 2017 relative to 2016, which was the first net increase in the number of agreements since issuers began submitting them to comply with the CARD Act. The pace of agreement termination continued to slow in 2017, with 13 total terminations representing a 5% termination rate, a very slight decline from 2016. Most of the terminated agreements were associated with three issuers. Pennsylvania State Employees Credit Union terminated five agreements; Bank of America and U.S. Bank each terminated three agreements.
Through entering into agreements, issuers partner with educational or affiliated entities to offer credit cards to students. The shares of each type of entity entering into these agreements with issuers were stable from 2016 to 2017. As reflected in Figure 2, no type of entity gained or lost more than a single percentage point of overall share in this time period.
FIGURE 2: AGREEMENT SHARE BY ENTITY TYPE
Commensurately, Figure 3 shows that the overall growth in agreement numbers was distributed evenly across types of entities. The total number of every type of entity entering into agreements increased by between one to five agreements, with the exception of "other organizations," which remained unchanged from 2016 to 2017.
FIGURE 3: TOTAL AGREEMENTS BY ENTITY TYPE
As shown in Table 2, alumni associations' dominant position eroded slightly, but in 2017 this type of entity still represented nearly half of all agreements, over two-thirds of all accounts, and over two-thirds of all payments.
TABLE 2: ISSUER-REPORTED METRICS BY ENTITY TYPE, 2017
Type of institution or organization
Agreements in effect in 2017
New agreements in 2017
Total open accounts at yearend
Payments by issuer in 2017
New accounts opened in 2017
Institutions of higher education
Multiple institutions and organizations
The total number of open college credit card accounts at year-end declined in each year from 2009 through 2017. The cumulative decline across these years was over 63%. Even so, most issuers in our survey saw a net increase in accounts from year-end 2016 to year-end 2017. These increases, however, were more than offset by decreases in Bank of America's number of accounts, which saw a decline in open accounts exceeding 43,000. Total year-end open accounts declined slightly for most types of entities in aggregate, as shown below in Figure 4; the exception was agreements with multiple entities, which nearly doubled.
FIGURE 4: YEAR-END ACCOUNTS BY ENTITY TYPE
The total amount paid by issuers to educational or affiliated entities declined from 2016 to 2017. This decrease resumes a long-standing trend interrupted by a slight increase last year. Overall, the cumulative decline from 2009 through 2017 was over 71%. New agreements accounted for over $1 million in payments by issuers, but this was insufficient to offset a substantial decline overall, driven both by terminations and reductions, sometimes quite large, in payments pursuant to existing agreements. Payment data are in Figure 5 below.
FIGURE 5: ISSUER PAYMENTS BY ENTITY TYPE
As shown in Figure 6 below, payment shares by type of entity were largely stable year-over-year.
FIGURE 6: PAYMENT SHARES BY ENTITY TYPE
Since 2009, the ten largest agreements by each of the three metrics of agreement size—year-end open accounts, new accounts, and payment volume—have tended to represent an increasing share of the market. In 2017, this metric stabilized, with the top ten agreements by each of those three metrics staying at or near 2016's high points. Concentration data are in Figure 7 below.
FIGURE 7: MARKET SHARE OF TOP TEN AGREEMENTS BY METRIC
There is significant overlap between each of the three groups of top ten agreements. Overall, 21 agreements comprise the three lists, with seven agreements appearing on two lists and two agreements appearing on all three. Of those 21 agreements, 16 are agreements with alumni associations, reflecting the dominant role that agreements with these types of entities continue to play in this market.
This report makes the following findings:
These findings are subject to a number of limitations. Some college agreements cover other financial products besides credit cards, such as deposit accounts, so payments made by issuers under these agreements may not relate solely to credit card accounts. In addition, some or all of the accounts opened in connection with these agreements, even those directly between issuers and institutions, may have been opened by individuals who are not students, such as alumni, faculty, and staff of an institution of higher education. (Conversely, it is possible that students may have opened accounts under the terms of alumni agreements.) Furthermore, card issuers' submissions do not include information regarding credit card accounts opened by students independent of a college credit card agreement, such as when a student responds to an offer in a direct mail solicitation sent to him or her by an issuer. Finally, because issuers were required to submit all college credit card agreements to which they were a party at any time during 2017, issuers' submissions may include agreements that are no longer in effect. By the same token, of course, agreements first entered into in 2018 are also not reflected in the data.
The Bureau is updating the comma separated value file ("CSV file") that contains all college credit card data collected to date with the most recent year's data. The Bureau intends to continue updating the CSV file each year as it collects new data from college credit card issuers.
The Bureau intends to ensure that the publically-available dataset is as accurate as possible. This means that the dataset (as well as some of the charts and figures in this report) may not be completely consistent with past iterations of this report because submitting entities sometimes make corrections to earlier submissions. In all cases, the Bureau intends for the public dataset to be the Bureau's definitive account of the data.
Below is a brief guide to interpreting the dataset: