slams Miller schools' card marketing Des Moines Register 10-31-07 Practice not in students' best interest, he tells lawmakers By CLARK KAUFFMAN REGISTER STAFF WRITER Iowa's state universities should not be marketing credit cards to their students, Iowa Attorney General Tom Miller said Tuesday. Miller told the Iowa Legislature's Government Oversight Committee that he understands why the schools might want exclusive agreements with Bank of America to market university-branded credit cards, if only to raise money and limit the number of solicitations from the bank's competitors. "Respectfully, I'd say the better practice would be to not be involved at all," he said. "Students can easily get into trouble. They are just starting to manage their financial affairs. ... They don't, basically, have the income to pay off a credit card. It's a very easy trap to get into." Over the next five years, the privately run alumni associations at Iowa's three state universities could collect up to $8.4 million from Bank of America for their assistance in marketing credit cards that bear the publicly owned names and logos of the schools. The taxpayer-supported universities stand to collect $1.2 million from those same deals. Such arrangements are common throughout the United States, but they're generating protests nationally from consumer advocates and public-interest groups. Miller said he recognizes the need for Iowa's alumni associations to raise money. But, he said, the organizations can achieve that goal without pitching credit cards to students. "We have to understand what our primary purpose is in government and, certainly, at the universities," Miller said. "The primary purpose of the universities is the kids, the students. The secondary purpose is to generate income to provide services to the students. "But the primary interest always has to be, in my view, the students. And if that's the case then, you know, you're not involved in credit card marketing to them." Miller's comments come one week after the presidents of the University of Iowa and Iowa State University said they were attempting to eliminate marketing
aimed at students by having their alumni associations renegotiate their contracts with Bank of America. Credit cards endorsed by the University of Northern Iowa have not been marketed to students for the past five months. University of Iowa Alumni Association President Vince Nelson told lawmakers that if his organization were truly interested in signing up student cardholders, then it must be doing "a very bad job," as only students 208 are actively using the U of I card. Nelson signed a Bank of America solicitation mailed to students earlier this year. It says, "Imagine the convenience of being able to purchase supplies for your classes without worrying about carrying a lot of cash. You could pay for your books - or get quick cash in an emergency - and put it on one easy-to-use account. That's the kind of flexibility every student can appreciate and it can be yours with the University of Iowa credit card." U of I alumni officials say that since last year, only four students have applied for a credit card through "tabling" - a process in which Bank of America representatives set up a table on campus and offer free merchandise in return for filling out a credit card application. Nelson told lawmakers that the alumni association is committed to openness and public accountability. Immediately after his testimony, Nelson left the hearing room and dashed down a hallway and a set of stairs at the Capitol building, refusing to acknowledge questions from a pair of reporters. Later, the association's vice president, Chris Bavolack, fielded questions about the organization while Nelson stood by. ISU Alumni Association President Jeff Johnson told legislators that he objected to The Des Moines Register's description of the free gifts offered to card applicants. Johnson said the news articles make it appear that the gifts - which, according to alumni records, can include ISU-branded clothing and bobblehead dolls - are "whimsical" in nature. "T...