Credit card agreements between banks and colleges declined in 2010, even though the number of lenders seeking access to college students and alumni grew slightly since 2009. Those details emerged from the Federal Reserve Board's annual report to Congress on the state of marketing relationships among universities, colleges, alumni associations, and banks.
According to the Fed, 21 credit card issuers partnered with university and college leaders during 2010, up from 18 the year before. For their efforts to share mailing lists and to offer access to school activities, higher learning institutions banked $73 million in marketing fees. Still, under pressure to sever ties with banks criticized for predatory student lending activities, schools left over $11 million on the table compared to 2009.
B of A remains top dog
Bank of America dwarfed its competitors on the Fed's list of the credit card issuers with the most college marketing agreements. Through its private label lending subsidiary FIA Card Services, BofA maintained more than 1.4 million active credit card accounts co-branded with college and university logos or offered through alumni associations.
The company's 848 active agreements generated nearly $56 million in revenue for its educational partners, though only 30,193 new cardholders opened accounts under FIA's umbrella during 2010.
FIA's dominance in the sector dates back to a core strategy employed by its predecessor company, MBNA. Bank of America bought the specialty credit card issuer in 2005, merging the two companies' operations to form one of the top credit card lenders in the United States.
Chase, Capital One maintain presence
The Fed's list includes 28 credit cards from Chase and 10 from Capital One. Meanwhile, credit unions joined the ranks of lenders entering partnerships with colleges and universities, suggesting that state-operated schools may pursue more direct revenues from relationships with students and alumni.
The Pennsylvania State Employees Credit Union maintained 13 college marketing agreements in 2010, while credit unions operated by Michigan State, Purdue, USC, and the University of Illinois also showed up on the Fed's list.