Des Moines Register
09-25-07
Senator: Curb credit card marketing
By CLARK KAUFFMAN
REGISTER STAFF WRITER
Student government representatives and an Iowa lawmaker are calling for
restrictions on credit card marketing at the state's public universities.
Sen. Joe Bolkcom, an Iowa City Democrat, said he is troubled that the University
of Iowa and Iowa State University are endorsing, promoting and profiting from
credit cards that are being marketed to their students.
The Des Moines Register reported this week that Iowa's two largest public
universities are aggressively marketing credit cards to students as part of an
arrangement that generates millions of dollars for the schools' privately run
alumni organizations.
Bolkcom said he has long been concerned about the relationship between the
public universities and private lenders.
He said he plans to propose changes in policy or law that would address several
aspects of the Bank of America deals:
On-campus marketing: Bolkcom said he objects to credit card companies setting
up tables on campus and giving away food or clothing to entice students to sign
up for credit cards.
"That ought to be banned," Bolkcom said.
Information databases: While public schools typically must disclose basic student
information to anyone who requests it, the U of I has agreed to give Bank of
America and the U of I Alumni Association contact information on students,
parents and people who buy tickets to sporting events.
"If we're going to allow this, we ought to have some say in what the interest rate
on the cards is going to be," Bolkcom said.
Public disclosure: The alumni groups say they are not subject to the state's openrecords law, which would require them to disclose their contracts with Bank of
America.
"People see the University of Iowa Alumni Association as part of the university,"
Bolkcom said. "The alumni aren't just private organizations. They largely exist as
extensions of these public institutions."
Several other states have passed similar legislation this year, sometimes in the
face of stiff opposition from cash-strapped universities and their alumni.
Matthew Pfaltzgraf, the government relations liaison for University of Iowa
Student Government, said a committee of students plans to lobby for some of the
same restrictions proposed by Bolkcom, such as the elimination of giveaways.
"We also want to address the shadowy relationships universities have with
financial institutions like credit card and student loan companies," he said.
"The schools are providing a disservice to the students when they sell them out
to the highest bidder, and that is something that needs to be addressed."
Responding to those proposals, U of I spokeswoman Linda Kettner said, "We've
had conversations with members of the General Assembly and student leaders
on these issues and will continue to do so."
Michael Gartner, president of the Iowa Board of Regents, which governs Iowa's
three state universities, said the board has not been involved in approving the
credit card marketing arrangements.
So far, the confidential agreement between Bank of America and the U of I
Alumni Association has not been shared with the regents.
That could be by design: Once the document is in the hands of public officials, it's
subject to public disclosure laws.
When asked whether the regents want to see that contract, Gartner said, "If the
press and legislators are raising issues about this, I suspect the board staff
should try to determine as many facts as possible to brief the board."
State records show that the U of I is authorized by the alumni association and
Bank of America to set up tables on campus and encourage students to sign up
for the Bank of America credit card. The contract calls for the school itself to be
paid $50 for every application it secures for the bank.
Unlike U of I, ISU has made public the contract between its alumni association
and Bank of America.
At the University of Northern Iowa, all of the contracts involve only the bank and
alumni, both of whom have refused to discuss the terms of their deal.
Records obtained by the Register show that while the U of I Alumni Association
is keeping secret the details of its financial arrangement with Bank of America,
the school has agreed to give the bank for its marketing use the mailing
addresses, telephone numbers and e-mail addresses of students, parents and
others who buy tickets to football and basketball games.
The U of I has also agreed to give the biggest-spending cardholders exclusive
access to university employees and student athletes.
Cardholders who accumulate enough points are entitled to private, 90-minute
meetings with coaches, as well as lunches with football players.
Reporter Clark Kauffman can be reached at (515) 284-8233 or
ckauffman@dmreg.com