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University CU in Iowa not hurt by student card regs
IOWA CITY, Iowa (8/26/10)--New regulations governing credit cards for young people and college students took effect this week, and one campus credit union says that the rules won't have the effect that big banks claim they will. College students will no longer receive credit cards just for being college students, according to the Daily Iowan. Credit card issuers are no longer allowed to tie card solicitations to offers of free food on campuses, and marketing agreements between credit card companies and colleges must be disclosed. Big banks such as Bank of America say lenders won't be able to impose high fees and rates on risky accounts, which will mean people with good credit may have to pay more to get credit. Those with poor credit will find credit harder to get, warned the bank. However, University of Iowa Community CU, based in Iowa City, Iowa, isn't seeing such dire effects, said the article. The new regulations go "after fees that larger banks were charging, and since we weren't really doing any of those things, it doesn't have a profound impact on our income," said Jim Kelly, senior vice president for marketing at the UI Community CU, in the article. The law requires most consumers under age 21 to have a co-signer, but the credit union saw a 60% increase the past year on approvals for its student credit card, Kelly told the Iowan. He noted the card has a low fixed rate and a low credit line. For the full article, use the link.
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