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Consumer Financial Services Alert
New Jersey Law Prohibits Direct Marketing of Credit Cards on Campuses of Public Colleges and Universities

The New Jersey legislature has passed and the governor signed into law a bill banning any "public institution of higher education" (as well as affiliated agents and student organizations) from entering into "any agreement[] for the direct merchandising of credit cards to any students." According to the bill’s sponsor, the "measure attempts to remove the temptation of obtaining credit cards by restricting access at New Jersey’s colleges," arguing it was needed "because many young adults do not realize the long-term consequences of accumulating huge debt." The bill does not prevent New Jersey’s private universities from entering into direct merchandising agreements, nor, according to the Credit Union National Association, does it prevent a public college credit union from offering cards to students who are members.

The new law is part of a trend to prevent the targeting of young adults for credit, who often do not have the ability to pay the debt once accumulated. In 2009, Congress passed the Credit Card Accountability Responsibility and Disclosure Act of 2009, which, among other things, amended the Truth in Lending Act to require credit card issuers to consider the independent ability-to-pay of an applicant under the age of 21. The New Jersey law is slated to take effect on March 9, 2013.

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