RESOLUTION

WHEREAS, credit card debt has become a growing problem for many young Americans; and

WHEREAS, a huge number of young adults, many of whom are current and recent college students, have ruined their credit history and are starting their adult lives with a lifelong credit problem; and

WHEREAS, in 2001, the number of bankruptcy filings increased 19 percent from 2000, and of these, the largest growing segment were people between the ages of 18-25; and

WHEREAS, between 1993 and 1997, credit card debt doubled to more than $422 billion, and low-income debtors, including college students, were among the fastest growing new users of credit; and

WHEREAS, in 2000, the average credit card balance of Nellie Mae Student Loan undergraduate applicants was $2,748, and of graduate applicants, $4,776; and

WHEREAS, in 2001, 21 percent of undergraduates with a credit card had balances between $3,000 and $7,000, a 61 percent increase over 2000; and

WHEREAS, credit card companies aggressively market their cards to students through student clubs, which hand out frisbees, t-shirts, candy, bottles of soda, and other incentives from tables set up at central locations on-campus, and receive anywhere from 25 cents to $2 for each credit card application they complete; and

WHEREAS, a 1998 U.S. Public Interest Research Group (PIRG) survey reported that 69 percent of students had obtained credit cards in their own names, and over half of these at campus tables; and

WHEREAS, interest rates on many common campus credit cards are very high, even higher than industry averages, and more than half of credit card issuers increased interest rates, some to as high as 29.99 percent, after just one late payment; and

WHEREAS, students obtaining cards at campus tables carry larger balances and pay off their cards later than those who do not; and

WHEREAS, more than one quarter of all students reported paying their credit card bill late at least once in the last two years, and the same number have paid their bill late with cash advances at least once in the last two years; and

WHEREAS, allowing unrestricted on-campus marketing of credit cards to students, who have limited financial experience, may not only have a negative impact on students' future financial health, but also on society at large, because debt may force students to leave school, postpone education, or turn away from lower paying human services fields; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-second Legislature of the State of Hawaii, Regular Session of 2003, the Senate concurring, that the Board of Regents of the University of Hawaii and the governing body of each accredited private or independent college or university in the state are requested to adopt policies to regulate the marketing practices used on campus by credit card companies; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Board of Regents of the University of Hawaii, President of the University of Hawaii, President of Brigham Young University – Hawaii Campus, President of Chaminade University of Honolulu, President of Hawaii Pacific University, Provost of Hawaii Community College, Chancellor of Hawaii Tokai International College, Director of Heald College, Schools of Business and Technology, Honolulu, and President of Transpacific Hawaii College.

Report Title:

REGULATION OF STUDENT CREDIT CARD ON-CAMPUS MARKETING