Aug
27
2010
More on the $2.8 million Bank of America contract
Posted by: Chris Heller in Vox Populi, tags: Alumni Association, Bank of America, Credit CARD Act of 2009, Credit Cards, GUASFCU
We recently got our hands on a copy of a contract between Bank of America (by way of its subsidiary, FIA Card Services), the Alumni Association, and GUASFCU, which reveals a seven-year agreement that pays out up to $2.8 million in royalties to the Alumni Association and GUASFCU.
As per the agreement, the Alumni Association and GUASFCU provided customer lists to Bank of America, which were then used to market credit cards to students and alumni. According to GUASFCU CEO Arjun Mehta (SFS ’11), the credit union only passed along a list compiled by the University Registrar’s Office.
Want to know more? We’re got more details and the contracts after the jump.
Specifics about the contract:
- The Alumni Association and GUASFCU receive royalties for each new credit card account opened, as well as retail purchases made on those cards. Bank of America also hands over a $50,000 bonus if 1,800 students and alumni sign up for credit card accounts in a year.
- Under the terms of the agreement, Bank of America retains the right to various marketing opportunities each year. (Four by mail and email, three by telemarketing, and on-campus tabling at “major events.”)
- The Credit CARD Act of 2009 required schools to disclose these kind of contracts, known as affinity agreements. The federal legislation significantly change how banks can market credit cards to college students, placing age restrictions on credit card customers, as well as dictating how a bank can and cannot market on college campuses.
- This affinity agreement has existed in some form since 1984. In fact, the earliest version was the first of its kind; in the early 1980s, MBNA founder Charles Cawley (C ’62) approached the Alumni Association with the idea to provide exclusive credit cards to the Georgetown community, which led to the first agreement. (MBNA, which later became the world’s largest independent credit card issuer, was purchased by Bank of America in 2006 and renamed FIA Card Services.)
Entries (RSS)
Ok – if I am reading this correctly, a Georgetown student who graduated in 1962 founded the world’s largest independent credit card issuer. In an effort to both expand his card membership base and give back to his alma mater, he approached the Georgetown Alumni Association and said every credit card they help market, he will give money back to the school. In an effort to reach the undergraduate population as well, both decided to enlist the help of the student credit union.
So today, the Alumni Association and credit union are offering credit cards to students and alumni that give money back to the school, as opposed to the dozens of credit card fliers you get daily that do nothing.
Am I missing the hype here? Is this the “gotcha journalism” John McCain warned us about? Is The Voice really this desperate to make a splash on NSO weekend?
@ Chicken Little
Gotcha journalism? Who am I trying to get?
Chris,
I just sent an email to the editor@georgetownvoice.com. Please retrieve my phone number from there and give me a call. I have something you may be interested in.
I have no idea! It reads like you are trying to cast blame GUAA, GUASFCU and MBNA/BOFA but I have no idea who exactly or why. I mean if this isn’t news, why report on it?
“Want to know more? We’re [sic] got more details and the contracts after the jump.”
What is this, the Georgetown Enquirer?
Chris,
Ignore that guy. This is news and it should be reported. Give me a call. I’ve got a spin story for you.
this is definitely not news, and is purely hype. affinity agreements are par for the course, particularly at universities.
Somehow, this is Sophia Behnia’s fault.
This post is stupid. I’m glad that my contact info was given to BOA. I opened a checking, savings, and credit card account with them – partially BECAUSE the marketing materials clearly stated that money would be given to the University. That’s what the info said and that was another reason to open the account. I’ve always been pleased with BOA service. And I love paying with either my Georgetown debit or credit card – it even got me a date with a waitress once who was also an alum too. As usual with this Chris Heller dude – typo in the first sentence (“an contract”). Chris Heller seems to hate Georgetown. Just transfer to GW.
@anon: You are correct – everybody else is doing it, so it’s alright. Encouraging people to spend money they don’t have — it’s the American way! Especially with college students who are, on the whole, lower default risks and much more likely to pay back at BOA’s credit card rates of up to 24.24% (I assume college students with their lack of credit history are on the higher end of their 20.99%+Prime rates).
@Alum ’07: I hope you greatly enjoy the 0.10% APY on said savings account. For every six figures you deposit, you get $100 a year. Woohoo!
I’m really glad you got to the bottom of that mail I received 26 years ago, to which I was in no way forced to in any way respond. Not a day has gone by that I haven’t wondered who was behind it. Are you sure you aren’t Bob Woodward’s son?
@ Alum ’07
Sorry about the typo. And trust me, I very much love Georgetown.
Yeah, can we get more extensive coverage of how the keg ban would have sucked too?? I love articles about things from three or four years ago which affect the daily lives of current students.
Oh and maybe you should do an article on Puddle of Mudd’s “Come Clean.” BA-ZING!
[...] fia card services [...]
[...] More on the $2.8 million Bank of America contractThe Georgetown Voice (blog)We recently got our hands on a copy of an contract between Bank of America (by way of its subsidiary, FIA Card Services), the Alumni Association, …Student info sold to bankThe Georgetown Voice [...]