AB 745

This bill requires the Department of Financial Institutions (DFI) to promulgate

rules prohibiting credit card issuers from doing the following: 1) offering a student

at an institution of higher education (institution) any tangible item to induce the

student to apply for a credit card or participate in an open-end credit plan offered

by the issuer; or 2) engaging in any marketing of a credit card involving the physical

presence of a representative of the issuer on the campus of an institution. Under the

bill, "institution" has the same meaning as under a federal law dealing with similar

issues as the bill, which includes public universities, private nonprofit universities,

postsecondary proprietary schools, and postsecondary vocational schools.

The bill also requires DFI to promulgate rules prohibiting an institution, or

department or other division of an institution, from receiving any payment or

compensation for credit card marketing activity on a campus of the institution that

is directed at the institution's students. The bill defines "campus" as the buildings,

facilities, and grounds under the control of an institution that are primarily related

to the institution's operation and related services and activities. Before

promulgating any of the foregoing rules, the bill requires DFI to consult with the

Board of Regents of the University of Wisconsin (UW) System, the Technical College

System Board, the Educational Approval Board, and representatives of private

institutions. The bill also prohibits the UW System and technical colleges from

selling to or otherwise providing a credit card issuer the names, postal addresses, or

electronic mail addresses of students, or engaging in any marketing on behalf of a

credit card issuer that is directed at students. The bill defines "student" as an

individual enrolled on a full-time or part-time basis. As a result, the bill's

requirements do not apply to former students.

In addition, the bill requires each institution to provide information about

financial literacy to its students on its Internet Web site and, if the institution offers

an on-campus orientation program to new students, to provide the information to

students during the orientation. Also, the bill requires an institution's students to

complete an online tutorial on financial literacy. The bill does so by prohibiting an

institution from allowing an enrolled student from enrolling in a subsequent

semester, quarter, or term unless the student completes the tutorial.

The bill also creates requirements for extending credit to individuals who are

less than 21 years old. Under the bill, a credit card may not be issued to, or an

open-end credit plan established by or on behalf of, such an individual unless one

of the following options is satisfied: 1) the application for the card or plan is cosigned

by a parent, legal guardian, spouse, or other individual, who is 21 or older, has the

means to repay debts, and indicates that he or she is jointly liable for debts incurred

before the applicant turns 21; or 2) the applicant submits financial information

indicating an independent means to repay debts. The bill requires DFI to

promulgate rules for satisfying the second option. The rules must be consistent with