The 10 largest credit card agreements between credit card issuers and universities reached an “unprecedented” 43% of all payments by issuers in 2016, according to a report issued Wednesday – although the number of agreements continues to decline.
In its annual report to Congress – College credit card agreements – the Consumer Financial Protection Bureau (CFPB) stated that since 2009, the 10 largest agreements by each of the three metrics of agreement size – year-end open accounts, new accounts, and payment volume – “have tended to represent an increasing share of the market” at colleges, universities and affiliated organizations sponsoring credit card programs.
In 2016, this trend continued, CFPB said, with the top 10 agreements by each of those three metrics reaching their largest share of the market since these data have been collected. The agency said that the data suggest that, in any given year, the decline in the overall size of the college credit card market is concentrated in the termination of agreements that are relatively smaller.
“The largest few agreements continue to increase the share of the overall market that they account for, with the ten most-lucrative agreements representing an unprecedented 43% of all payments by issuers,” the bureau stated.
In other results, the agency said the number of agreements between the credit card issuers and the educational institutions and organizations is continuing a trend of decline, showing a “significant net decrease” of 68 agreements in effect for 2016 – a 23% drop relative to 2015.
The bureau also reported that alumni associations remain the major entity type in this market. “While institutions of higher education regained some market share as measured by agreements and open accounts, alumni associations nevertheless increased their share of issuer payments,” the report stated.