Washington, DC – The U.S. Senate today approved legislation that strengthens oversight of the credit card industry. The legislation includes measures sponsored by U.S. Senator Dianne Feinstein (D-Calif.) that place restrictions on marketing credit cards to college students and direct the Federal Trade Commission to study new technology to combat crime at automated teller machines.

However, Senator Feinstein expressed dismay that the legislation includes an amendment, authored by Sen. Tom Coburn (R-Okla.), that allows openly-carried rifles, shotguns and semi-automatic weapons in national parks if the firearms are in compliance with state law.

“I’m disappointed that this legislation includes a completely unrelated amendment to allow openly-carried, loaded firearms in national parks if it complies with state law,” Senator Feinstein said. “Millions of families and young children enjoy the majesty of these incomparable destinations every year. I believe allowing loaded weapons will bring unnecessary danger to visitors to our national parks.”

The Feinstein-Corker-Casey-Grassley-Kerry-Levin-Menendez-Kohl amendment protects students from common credit traps. The measure:

• Prohibits credit card companies from offering gifts to students in exchange for completing credit card applications;
  
• Requires universities to publicly disclose marketing agreements made with credit card issuers;
  
• Requires credit card companies to report how much money they are giving to schools and alumni associations through these agreements and what they receive from the universities in exchange; and 
  
• Calls upon the Government Accountability Office to study the extent of these deals and the overall impact on student credit card debt.

“Colleges should not be encouraging their students to sign up for products with high interest rates and fees that can get them bogged down in debt. Young consumers often do not have the knowledge and experience to manage their credit wisely and as a result can get into deep financial trouble that can stay with them for decades,” Senator Feinstein said. “This amendment installs common-sense restrictions to protect college students and all young consumers from deceptive practices.”

“A free T-shirt is never worth starting off adulthood with ruined credit. College students are bombarded with offers on campus that seem like they’re getting something for nothing, but applying for a credit card requires forethought and responsibility,” said Senator Robert Menendez (D-N.J.). “We want to end these giveaways that end up trapping students. We also want to know when colleges and universities have deals with credit card companies that allow them to push their plastic on consumers without the wherewithal to responsibly manage their credit. This is an important part of credit card reform, and it has a rightful place in this legislation.”

“Students today who work hard to obtain a college degree will enter the workforce saddled with thousands of dollars in loans, and thousands in credit card debt on top of it,” said Senator Robert Casey (D-Pa.).  “I am pleased that Congress has acted to require disclosure of marketing tactics that target struggling college students and add to the burden of debt that follows them out of school.”

“Far too often young adults don’t read the fine print of credit card offers and rack up huge debts that follow them throughout life. As a father of two daughters in college, I’m constantly making sure my girls aren’t signed up for any of the many credit card offers targeting college students,” said Senator Bob Corker (R-Tenn.). “This amendment reforms credit card marketing practices aimed at college students so the terms are fair, transparent, and more easily understood by the consumer.  It would also commission a study to fully examine the problem of student credit card debt so we can help make sure these young Americans aren’t burdened and hampered by excessive debt.”

“I have been concerned with how credit card companies target our young consumers,” said Senator Herb Kohl (D-Wis.).  “Credit card companies advertise on college campuses across the country, sending card applications to newly enrolled college freshmen, giving away t-shirts for a credit card application and even mailing students applications to their on-campus mailbox.  This amendment will enable young consumers to gain access to credit in a responsible manner.”

            According to a report released earlier this year by Sallie Mae:

• 84 percent of all undergraduates have at least one credit card;
• The average student has more than four credit cards;
• Nine out of 10 college students use credit cards for direct education expenses, and 30 percent charge some tuition to their cards;
• The average balance for these students is $3,173. Eighty-two percent of college students carry a balance each month, which requires them to pay finance charges.
• Nearly one in five college seniors holds $7,000 or more in credit card debt.

The Feinstein-Gregg emergency pin amendment requires the FTC, in consultation with law enforcement, to examine new technology to help people who are victims of violent crimes at ATM machines. Currently, technology exists that would enable consumers in an emergency, such as an assault or an abduction, to alert the police covertly  from an ATM machine, either through a panic button or an emergency PIN number. Unfortunately, no banks yet use this technology.

            The amendment would require the FTC to report to Congress:

• An analysis of the technology currently available and under development to install 911-call features at ATM machines;
  
• An estimate of the number and severity of crimes that could be prevented through this technology, and;
  
• The estimated cost of installing this technology.

Additionally, Senator Feinstein has long championed efforts to require credit card companies to disclose the financial effects on consumers when they make only the minimum monthly payment on their monthly credit card balances.

The bill passed by Congress today would require credit card statements to include personalized information alerting cardholders to how much it will cost and how long it will take to pay off their credit card debt if they make only the minimum payment each month.

“We need to do everything we can to protect Americans from abusive credit practices and to ensure that consumers have the information they need to make good, informed financial decisions,” Senator Feinstein said. “These warnings have been a long time in coming and I will be very pleased to see them enacted into law.”

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