Public Policy
Alumni Association Affinity Programs

New Law Affects Alumni Association Affinity Credit Card Programs

The Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit CARD Act, H.R. 627), which Congress passed and President Obama signed into law in May 2009, includes disclosure requirements for college, university and alumni association credit card agreements.

The disclosure language requires institutions of higher education to "publicly disclose any contract or other agreement made with a card issuer or creditor for the purpose of marketing a credit card." This means that alumni associations housed within colleges and universities will now have to disclose all affinity credit card marketing agreements.

In addition, the law also affects the affinity credit card agreements of alumni associations that are completely separate from their institutions. Specifically, the law requires credit card companies to disclose any marketing agreements with institutions of higher education, alumni associations and affiliated foundations under which credit cards are issued to college students. This means that any card agreement where a student has been issued a card would be subject to disclosure by the credit card company.

  • Read the section of the law that affects alumni association affinity credit card programs.

In January 2010, the Federal Reserve Board issued final regulations implementing the Credit CARD Act that include information on how colleges, universities and their alumni associations can comply with the disclosure requirements in the law. The final rule clarifies that any alumni association affinity credit card agreement where a student has been issued a card is subject to the law regardless of whether the card was intentionally targeted at or marketed to college students. In addition, for alumni associations housed within their college or university, the final rule states that colleges and universities can fulfill the duty to publicly disclose their affinity credit card agreements/contracts by posting the agreement /contract on the institution's Web site or by making the agreements /contracts available upon request.

Updated October 24, 2017


In February 2008, New York Attorney General Andrew Cuomo sent a series of subpoenas to institutions around the country asking for details on their agreements with credit card providers. These agreements, also known as affinity credit card programs, involve an institution or an alumni association granting a bank the right to market the bank's credit card bearing the institution's name and logo to individuals with a close relationship, or affinity, with the institution.

In return, institutions or alumni associations receive a royalty that helps fund alumni programming and services. It is unclear how many college and university alumni associations received subpoenas.

To help alumni associations respond to questions about affinity credit card programs and potential legislation and regulation, CASE has developed the following FAQ.


FAQ: Alumni Associations and Affinity Credit Card Programs

Q: What are affinity credit card programs and what is their relationship to alumni associations?

A: Many college and university alumni associations have affinity credit card programs that give graduates the option of using a credit card bearing the name and logo of their alma mater. To offer an affinity card, the alumni association engages in a contractual agreement with a bank that gives the bank the right to market the card to individuals who have a close relationship with an institution, such as alumni. A number of not-for-profit organizations, including AARP and the American Bar Association, offer affinity cards.


Q: What does the alumni association get out of affinity agreements?

A: First and foremost, they strengthen their relationships with alumni by offering them a valuable service. In addition, banks usually pay the association a "royalty" fee for use of the institution's name and logo. Some associations also receive financial benefits when individuals use the affinity credit cards. The financial benefits provide resources the institution would not otherwise have to offer alumni programs, provide scholarships or serve graduates or students in other ways.


Q: Do graduates who use credit cards associated with their institution know that the institution is receiving a financial benefit?

A: Yes. The opportunity to support the institution or its alumni association is one of the primary reasons graduates select and use affinity cards over other credit cards. Graduates also use the cards to demonstrate their pride in their alma maters.


Q: What's wrong with these arrangements?

A: There is nothing inherently wrong with alumni associations' affinity credit card programs, which are similar to affinity card programs offered by many other nonprofit organizations, and there has been no evidence of related impropriety. In fact, these programs benefit graduates, associations and institutions by generating resources that otherwise would not be available to serve alumni and sometimes students.


Q: Why, then, are these programs under some scrutiny?

A: Recent controversies regarding the relationship between student financial aid offices and "preferred" private lenders have led lawmakers and regulators to examine other relationships between colleges and universities and the companies that do business with their institutions.

Government officials want to make sure that colleges and universities are not engaged in questionable practices or potential conflicts of interest.

Policymakers are also concerned about the level of student credit card debt and whether colleges are encouraging students to take on more debt than necessary through their affinity credit card programs.


Q: Do alumni associations or institutions market affinity cards to students?

A: It varies. Some associations do not promote affinity credit cards to students. Some market to students and also provide them with credit education programs. Some do not actively market affinity credit cards to students but do not turn interested students away. Regardless, most associations focus their affinity programs on graduates rather than current students.


Q: Is there really any difference between the preferred lender issue and the affinity credit card issue?

A: There are a number of very important differences. The preferred lender issue usually involved entering college students, often unfamiliar with their options for student loans. According to media reports, the preferred lenders may have been presented as or perceived as the "best deal" for the student. In some instances, preferred lenders represented themselves or were perceived as university employees. In contrast and by all reports, alumni associations allow banks to simply share information about affinity credit card programs with alumni, who can then compare affinity card options with other cards and make an informed choice.


Q: Is the government attempting to regulate these agreements?

A: The Credit Card Accountability Responsibility and Disclosure Act of 2009 (H.R. 627), which Congress passed and President Obama signed into law in May 2009, includes disclosure requirements for college, university and alumni association credit card agreements.

The disclosure language requires institutions of higher education to "publicly disclose any contract or other agreement made with a card issuer or creditor for the purpose of marketing a credit card." This means that alumni associations housed within colleges and universities will now have to disclose all affinity credit card marketing agreements.

In addition, the law also affects the affinity credit card agreements of alumni associations that are completely separate from their institutions. Specifically, the law requires credit card companies to disclose any marketing agreements with institutions of higher education, alumni associations and affiliated foundations under which credit cards are issued to college students. This means that any card agreement where a student has been issued a card would be subject to disclosure by the credit card company. Read the section of the law that affects alumni association affinity credit card programs (PDF).


Q: Should associations be concerned about Congressional interest in affinity programs?

A: Questions about affinity programs from legislators and others provide institutions and associations with opportunities to increase understanding about the benefits affinity programs bring to graduates, students, associations, and educational institutions. Indeed, the revenues generated through these programs can free up other resources at the university to enhance educational access and other priorities. However, many associations are concerned about the potential negative impact to alumni, associations and others if these programs are unnecessarily and unduly restricted.


Q: What are alumni associations doing to address this issue?

A: First, with encouragement from their professional associations, they are reviewing all of their affinity programs to be sure they continue to operate in a manner consistent with professional standards, institutional policies and the mission of the association. They are also working hard to ensure that alumni who participate in affinity programs understand clearly the relationship between the association and the service provider. And they are trying to inform their members, government officials and the public at large about the value of affinity programs and about the harm that could be done by over-regulating programs that have benefited their institutions for many decades.


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