BILL REQ. #:  H-2015.1 

Read first time 02/28/2003.   Referred to Committee on Higher Education.

     AN ACT Relating to regulating credit card marketing to college students on the campuses of institutions of higher education; adding a new section to chapter 28B.10 RCW; and creating a new section.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds there is a rising trend of spiraling credit card debt owed by college students and that the major contributing factor to deep student debt is the unchecked prevalence of unsolicited credit card applications on college campuses. Many of these credit card offers extend thousands of dollars in credit to students who provide little more than a signature and a student identification card. The legislature finds that eighty-three percent of undergraduate students have at least one credit card and carry an average credit card debt of three thousand dollars. The legislature further finds that banks and credit card companies are increasingly using offers of free merchandise to encourage students to apply for credit cards.
     The legislature finds that financially inexperienced students may become trapped in a cycle of credit card debt, crippling their ability to qualify for the student loans necessary to complete their education and their ability to purchase a car and obtain a mortgage after graduation. The legislature further finds that reasonable restrictions on the marketing of credit cards to college students by banks and credit card companies serve a significant state interest in providing a buffer between the aggressive marketing tactics pursued by some banks and credit card companies and the students who have not yet developed the financial skills to avoid unmanageable credit card debt.

NEW SECTION.  Sec. 2   A new section is added to chapter 28B.10 RCW to read as follows:
     (1) The governing boards of the state universities, the regional universities, The Evergreen State College, and the community colleges shall require a bank or credit card company that intends to solicit business from students on the institution's campus to register with the institution before engaging in marketing activities on campus. However, this section shall not be construed to require an institution to permit the marketing of credit cards to students on the institution's campus.
     (2) A bank or credit card company permitted to engage in marketing activities on an institution's campus shall not be permitted to:
     (a) Advertise or offer free merchandise and incentives to students as part of a credit card marketing effort; or
     (b) Engage in door-to-door solicitation of business from students in a residence facility operated by, or under contract to operate with, the institution of higher education or to engage in direct marketing to students in a dining facility operated by, or under contract to operate with, the institution of higher education.
     (3) Except as provided in subsection (4) of this section, a bank or credit card company extending a credit card offer to students on the campus of an institution of higher education shall provide debt management seminars free of charge to students. Such seminars shall be offered on campus at times and in places convenient to students no less often than the bank or credit card company is present on the campus for the purpose of soliciting business from students. The times and locations of debt management seminars required under this subsection shall be provided to the institution at the time the bank or credit card company registers with the institution as required in subsection (1) of this section.
     (4) A bank or credit union operating an authorized branch location on the campus of an institution of higher education may extend a credit card offer to a student within the normal course of banking business conducted within the confines of the bank or credit union branch facility.
     (5) The governing boards of the state and regional universities, The Evergreen State College, and the community and technical colleges shall not permit the selling of student directory information to a bank or credit card company by the institution.
     (6) Each institution of higher education shall establish and maintain a do not contact list and shall inform students of the availability of the list and the procedures for voluntary participation in the list. A do not contact list shall consist of the names, phone numbers, and addresses of those students requesting that a bank or credit card company refrain from contacting the student with an unsolicited credit card offer. The institution of higher education shall incorporate the do not contact list, including an express requirement that the students listed shall not be contacted with unsolicited offers, into any contract or agreement with a bank or credit card company for the solicitation of business from students on campus.
     (7) As used in this section, "campus" has the definition used by each institution of higher education for the purpose of crime statistics reporting required by RCW 28B.10.569.

NEW SECTION.  Sec. 3   If any provision of this act or its application to any person or circumstance is held invalid, the remainder of the act or the application of the provision to other persons or circumstances is not affected.