The recent publicity surrounding the Cornell Alumni Association’s release of the names and addresses of nearly 200,000 alumni to Chase Bank as part of a $6.3 million contract has left some alumni disappointed with the organization.
Jim Moore ’85, a former alumni relations director at the University of Rochester’s Simon School, said he was always wary of affinity card programs and entanglements with banks, which have a tendency to upset alumni.
“I never thought affinity cards were worth the hassle,” he said, noting that, while many banks — though not Chase — wanted to make a deal, he was reluctant. “I knew my alums would shred me if I sent their names to a bank. [Also,] the sales guys were smarmy and unduly arrogant.”
As for Cornell’s alumni card, he said, “I don’t have one and I don’t plan to.”
“I hate to hear these stories” of the University releasing personal data, said Ryan Sullivan ’98, who said he never heard anything about his information being released to the bank.
“People work hard to protect their confidential information,” he added, though noting that once the information has been released it is too late to retract it.
“It is what it is once it’s out,” he said.
The Cornell Alumni Association’s contract with Chase Bank awards the CAA a percentage of the money alumni spend with a special Cornell affinity credit card. The contract, dated August 2007, has allowed for the release of the contact information of nearly 200,000 alumni to the bank for the purposes of marketing the card.
The Cornell credit card has been marketed to alumni via mailings and website advertisements since the partnership began in 1997. The latest $6.3 million contract — which will last until May 2012 — awards the CAA an additional $3 for every new card account, and a 0.5 percent cut of the money spent on those cards, according to the contract.
Though Vice President of Alumni Affairs Richard Banks asserted that the card is no longer being marketed to alumni, he estimated that during the marketing of the card, it was being advertised to about 180,000 “alumni and friends” at any given time.
The current contract also provides for free tickets to Cornell athletic events and priority parking upon request from Chase executives, the contract states.
Banks was unable to provide the number of cards currently in use or to estimate the amount of revenue generated from the opening of new accounts and the 0.5-percent commission on alumni expenditures, saying that the latter figure was not very important.
He described the program as beneficial to the CAA for several reasons not limited to simple monetary gain.
“There is a financial component … but we did not do this just for the money,” he stated.
“It’s a way to keep alumni engaged.” Banks said that cards depicting McGraw Tower or the Arts Quad can help Cornellians feel connected to their alma mater long after graduation.
However, he said that the monetary gain from the deal has indeed allowed the CAA to further alumni programming, providing for the subsidization of reunion costs and alumni magazine subscriptions. The money has also augmented alumni class treasuries and scholarship endowments.
As for the release of alumni contact information, Banks said he did not recall alumni ever being explicitly informed of this aspect of the agreement with Chase.
“We didn’t write to everybody and tell them in advance,” he said.
The Cornell Alumni Association is an independent organization supported by the Alumni Affairs Office, which Banks said provides the CAA with administrative and financial support.
With legislation passed in 2009 restricting marketing of loans and credit cards to students, both banks and universities are under scrutiny for the degree to which they protect the financial interests of students and recent graduates — both groups that have high levels of debt.
Banks said that Cornell has never marketed affinity cards to students, noting that “We didn’t think it was in the students’ best interests or ours,” and speculated that Chase Bank declined to renew the contract in 2012 in response to recent, harsher attitudes toward credit card marketing among politicians and the public.
This fall, the New York State Attorney General’s Office is conducting investigations into credit card marketing and its link to student debt, and has issued a set of “Student Credit Card Reforms for Colleges and Universities,” which discourages on-campus marketing and urges consumer education for both students and alumni.
Gail Hurdis, a spokeswoman for Chase Card Services, said she was unable to comment on the specifics of the contract with CAA, confirming only that Chase has ceased all student-targeted credit card marketing.
“We ended student-focused campus marketing in 2007 and alumni-focused athletic event marketing in 2008,” Hurdis stated in an e-mail.
The biggest potential problem with university affinity cards is a lack of complete information for the alumni and potential consumers, said Gary Brown, director of communications and policy research at the New York State Consumer Protection Board.
“It’s one thing to show loyalty to the school, but you want to make sure that you’re getting the best possible terms,” he stated. Brown encourages consumers to “do their homework” and not blindly enter into a credit card contract because of a university affiliation.