Fewer colleges are sponsoring credit card programs these days, and those that do are likely breaking the law when it comes to disclosures, according to the CFPB's sixth annual report on college credit card agreements.

The study of 369 college credit card agreements from 33 issuers found there were 65% fewer sponsored programs in 2014 versus in 2009, and the overall number of school-affiliated credit card accounts open dropped by 58% between 2009 and 2014. The study also found issuer payments to schools and affiliated organizations plummeted from $84.5 million in 2009 to just $34.1 million in 2014 – a decrease of 60%. Between 2013 and 2014 alone, issuers paid 20% less to partners, the CFPB found.

However, the number of new accounts opened per year was actually 12% higher in 2014 than in 2009, according to the CFPB. One reason: Only about one quarter of agreements in 2014 were actually between issuers and schools, the CFPB said.

“Nearly three-quarters of this new account growth … is consistently accounted for by agreements between issuers and alumni associations, indicating that most new accounts likely are issued to alumni, not to students,” the CFPB noted.

In fact, 55% of all college card agreements in 2014 were with alumni associations, 10% were with foundations and 11% were with other types of affiliated organizations, the study said.

Large banks are retreating from the campus card market, however. Capital One exited it entirely in 2014, according to the CFPB. And Bank of America, the long-time dominant player in the market, ended about 100 agreements in 2013 and another 26 in 2014, making 2014 the first year in which it had fewer than half (125) of all total agreements. However, that bank still represents nearly 80% of all accounts open under campus card agreements.

Now, credit unions appear to be filling part of the void. Of the 33 issuers in the 2014 study, 20 were credit unions, the report said.

The West Lafayette, Ind.-based Purdue Federal Credit Union, which has $954 million in assets and 68,000 members, was the largest issuer, with 25,341 open accounts in 2014. It made $1,000,000 in payments to the Purdue Alumni Association last year, according to the CFPB.

The $2 billion Apple Federal Credit Union in Fairfax, Va.; the $1.9 billion Georgia's Own Credit Union in Atlanta; the $503 million Harvard University Employees Credit Union in Cambridge, Mass.; the $4.8 billion Mountain America Federal Credit Union in West Jordan, Utah; the $348 million The Southern Credit Union in Fayetteville, Ga. and the $2 billion University of Wisconsin Credit Union in Madison, Wis. are among the newest issuers – they didn't submit card agreements in 2013 but did so in 2014, the CFPB said. Harvard University Employees was the largest, netting 1,787 accounts.

Schools may not be doing all they can to ensure those agreements deter regulatory headaches, though.

The CARD Act requires issuers to submit information about their college credit card accounts to the CFPB; colleges must also publicly disclose their agreements with issuers.

“Under current rules, colleges are able to comply with this requirement by publishing any relevant credit card agreement on their website or by making it available free of charge upon request using reasonable procedures and in a reasonable timeframe,” it said.

However, the CFPB found that of 25 schools sampled, 20 did not put their card agreements on their websites. And of that 20, only three provided them upon request. On Dec. 16, the CFPB sent warning letters to 17 colleges, directing them to beef up their disclosures.

“The general failure to disclose the agreements conflicts with the CARD Act's clear direction to colleges and thus may violate federal law,” the report said.

The CFPB noted its findings have certain limitations, however. Some college agreements cover other financial products, for example, and not all who open accounts are students. In addition, data from card issuers excludes information about students who open accounts in response to offers made to the general public rather than through the campus. And because issuers were required to submit all college credit card agreements to which they were a party at any time during 2014, the information includes 97 agreements no longer in effect – about one quarter of all agreements submitted, it said.

In October, the Department of Education banned overdraft and swipe fees on student debit and prepaid cards. It also prohibited schools from requiring students to open accounts with specific institutions in order to receive student aid funds.

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Campus Card Programs Take Nosedive: CFPB

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