We have posted previously (for instance, here) on the Credit CARD Act's unusual efforts to restrict marketing of credit cards to young adults under age 21. (For information on the Act's key provisions, go here.)
In this regard, you may be interested in two recent articles by Professor Eboni Nelson arguing that the Credit CARD Act does not adequately protect young adults. Here are the abstracts along with links to the full articles:
From the Schoolhouse to the Poorhouse: The Credit CARD Act’s Failure to Adequately Protect Young Consumers, 56 Vill. L. Rev. 1 (2011)
Whether through personal experiences or through the experiences of our friends and family, most, if not all, of us are all too familiar with the credit card industry’s unrelenting attempts to saddle young, naïve college students with debt that they cannot afford to repay. Students thoughtlessly apply for and use credit cards without considering the negative effects credit card debt can have on their academic, personal, and financial wellbeing. In May 2009, Congress attempted to address the pervasive problem of young consumer indebtedness by passing the Credit Card Accountability Responsibility and Disclosure Act of 2009. While this Article recognizes and applauds Congress’s attempt to protect college-aged consumers, it questions whether the current legislation, which narrowly focuses on restricting young consumers’ access to credit cards, is the most effective way to provide this protection.
Drawing upon the psychological and sociological traits that characterize this generation of student consumers and the long-term negative consequences that befall many of them as a result of their credit card usage, this Article asserts that the current legislation misses an important opportunity to provide greater and more effective protection for this vulnerable class of consumers. By narrowly focusing on the availability of credit cards to college-aged consumers, the Credit CARD Act fails to include provisions that provide protection for young consumers once they obtain and begin to use credit cards. Therefore, this Article argues that more comprehensive measures are needed to help protect the financial futures of young, college-aged consumers.
Over the past several years, young consumers have amassed increasing amounts of credit card debt – debt that many of them cannot afford to repay. Card companies’ aggressive solicitation efforts have contributed to this growing problem, as have their common practice of extending credit to young consumers without consideration of their ability to repay the debt. To address these concerns, Congress included specific provisions related to college-aged consumers in the recently enacted Credit Card Accountability Responsibility and Disclosure Act of 2009 (the “CARD Act”). The new provisions attempt to protect consumers under the age of twenty-one by requiring them to satisfy certain prerequisites before obtaining a card and by prohibiting card companies from using certain solicitation methods when marketing to college-aged consumers. This Article questions whether these provisions will provide meaningful protection for this group of consumers.
In their attempt to address the problem of young consumer credit card indebtedness and the negative consequences that can often result from such debt, lawmakers failed to fully consider college-aged consumers’ traits and experiences that may have contributed to the development of the problem. Because of this oversight, this Article questions whether the CARD Act is sufficiently tailored to protect young consumers from the pitfalls of credit card debt. It suggests that as lawmakers endeavored to craft the CARD Act’s young consumer protections, it could have been informative and useful for them to have considered qualities that may place young consumers financially at risk, as well as the possible implications of their coming of age in the Millennial generation. Lawmakers’ consideration of such factors could have resulted in more beneficial protections than those currently included in the Act.