Every fall as the Credit Slips bloggers prepare to begin teaching, we are treated to the sight of tables, tents, and marketing literature aimed at marketing credit cards to college students. This year, those familiar signs won't be appearing on the campuses of the University of Tennessee system. On May 21, 2008, Tennessee enacted a law prohibiting credit card issuers from recruiting students on campus or through university facilities or student organizations. (There is an exception for "days when there are athletic events" so presumably home football games retain their usefulness for credit card issuers). The bill also requires the University of Tennessee institutions that receives funds from student credit cards or from the use of the school name or logo on credit cards to disclose the amount of money received and how the money was used.
Calls for restricting credit card marketing to students are nothing new (see here and here and here) but I think this is the first law to be enacted that absolutely bans campus marketing. I'm confident the credit industry will challenge the bill, probably on preemption grounds, arguing that as the state of Tennessee lacks authority to regulate national banks. I think that argument should fail. The state isn't banning credit cards as a matter of general commerce; the legislature is acting in its role as overseer of the state's educational institutions. If an institution itself (Rochester Institute of Technology, University of New Mexico) can ban or sharply limit the solicitation of students for credit cards, I think a state legislature can enact the same prohibition for the campuses that it controls.