Sept. 7 (Bloomberg) -- The State University of New York, which has 64 campuses, has agreed to a code of conduct developed by New York Attorney General Andrew Cuomo to safeguard students from what he calls “deceptive and unfair credit card marketing.”
Cuomo’s code outlines steps schools should take to monitor and limit credit card marketing to students, according to an e-mailed statement from the state attorney general’s office.
The code requires the schools to offer financial literacy programs and not share personal information with credit card companies without permission.
It also bans agreements in which the school earns a percentage of finance charges imposed on students. If a school enters into an exclusive agreement with a credit card company, it must select the card based on their students’ best interests, Cuomo said. It also must monitor all credit card offers promoted on campus.
“I commend SUNY for being at the vanguard of reform and I urge other colleges and universities to follow their lead,” Cuomo said in the statement.
Last week, Cuomo announced a statewide investigation into credit-card marketing practices that target college students through their institutions. He said he sent letters to about 300 colleges and universities in New York requesting contracts that offer exclusive rights to market cards.
SUNY chancellor Nancy L. Zimpher said in today’s statement from Cuomo’s office that the university wants to “make sure that all of our students are prepared with the financial education they need and have the strongest safeguards against financial danger.”
David Belsky, a SUNY spokesman, did not immediately return a call for comment on how the reforms will change current practices.
Cuomo said his continuing statewide investigation into credit card marketing has revealed troubling practices that have contributed to students’ credit card debt. Citing a 2009 survey by Sallie Mae, he said the average college student graduates with nearly $4,100 in credit card debt.
Cuomo’s current probe follows a nationwide investigation beginning in 2007 into conflicts of interests, including payments and perks to colleges and financial aid offices, in the $85 billion student loan industry. About a dozen lenders and 28 colleges agreed to cut financial ties as a result.
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