Committee Discusses Ways to Reduce College Students’ Credit Card Misuse
During testimony before the House Subcommittee on Financial Institutions and Consumer Credit, Benjamin Lawsky, deputy counselor to New York Attorney General Andrew Cuomo, said predatory credit-card companies are taking advantage of college students (The Chronicle of Higher Education, “Cuomo Hopes to Have Investigation of Colleges’ Credit-Card Deals Finished by Fall,” June 26, 2008).
Credit card companies, Lawsky contends, offer free gifts to students when they apply for credit cards and the companies often withhold important information about the cards’ payment requirements and interest rates.
Kenneth Clayton, managing director of the American Bankers Association Card Policy Council, countered that students need to be more responsible credit card users. “Credit-card companies don’t give students an open check,” Clayton said.
Lawsky’s and Clayton’s comments were made before the consumer-credit subcommittee, which met June 26 to talk about ways to help students avoid credit-card debt and misuse. Options discussed during the hearing included adding a cosigner option, setting uniform standards for underwriting credit, and limiting exclusivity agreements between colleges and the companies that issue credit-cards.
Cuomo’s office expects to complete its investigation this fall into possible conflicts of interest between credit-card companies and the college officials who do business with them.
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