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.)