An annual report prepared for Congress by the Consumer FinancialProtection Bureau and released last month documented that creditunions have continued to sharpen their skills when it comes tomanaging and growing affinity card programs with colleges anduniversities.

Affinity card programs are so named because the credit unioncard issuers enters into an  agreement with a school orthe school's alumni group and then markets and issues credit cardsto the school or alumni community.  The credit uniongenerally gets to keep the finance charges that the cards generatebut often divides the interchange with the its affinity partner andoften pays a per card account fee to the school when new accountsare opened. In addition, the affinity partner also gets a card orcards bearing its logo or other team identifier that helps thembuild loyalty with the program.

The report, which was mandated by the CARD Act of 2009,documented that three credit unions were among the national leadersin opening new credit card accounts with college or universityaffinity partners in 2011. The report was formerly compiled by theFederal Reserve.

The leader among both credit union and noncredit union affinitycard issuers was the 43,000- member $276 million University of Illinois Employees Credit Union, which opened3,452 new card accounts in its affinity program with the Universityof Illinois Alumni Association in 2011.  The credit unionhad opened 779 new accounts under the agreement in 2010, when itwas ranked fifth in the nation in opening new accounts underaffinity deals with colleges.

The 62,000-member $746 million Purdue Federal Credit Union held the spot currently occupied byUIECU last year but fell to third this year, opening 2,877 accountsunder its affinity agreement with the Purdue Alumni Association.  Last year, PFCU opened 2,642 card account under thedeal.

Michigan State University Federal Credit Union came in fifth onthe list, opening 1,115 new card accounts under its contract withMichigan State University.  Last year. it was ranked24th and opened 302 accounts, the report said.

Greg Anderson, chief operating officer at University of IllinoisEmployees Credit Union, credited a variety of different approachesfor the portfolio's growth, both in 2011 and this year. As of the last report, the credit union had 7,300 card accounts inits affinity portfolio with about $20.3 million in outstandingbalances.  

The credit union's success with the program was especiallysignificant, Anderson explained, when you consider that the creditunion does not offer or market the program to students at theschool–though it does not deny issuing them a card.

“Essentially, if one of them comes into our branch and sees asign about the card and if he or she qualifies, yes, we will issuethem one,” Anderson said.  “But we don't go looking forthem.”

Anderson explained the credit union decided to forgo offeringcard to students since the program had never particularly focusedon student lending, even when a bank had been the affinitypartner.  In addition, the credit union preferred to focuson building a relationship with students and then offering them acard soon after graduation when they usually had the  needfor one along with greater maturity.

Anderson said the credit union's advertising played a big rolein marketing the card, as well as using local alumnigroups.  He said the credit union contacted the groups andasked them to market the cards among members in exchange for a feewhenever a member opened an account. “Since the local groups arealmost always in some kind of fund raising mode and they like theopportunity,” he said.