A Problematic Partnership
Published: Friday, October 26, 2012
Updated: Friday, October 26, 2012 02:10
The GOCard has been advertised as a way to reduce the number of cards students need to carry. But the recent contract linking PNC Bank accounts to GOCards leaves us worried that these business partners have bigger plans for limiting the options in Georgetown students’ wallets.
The university announced in September that Georgetown One Cards could be linked to PNC bank accounts and serve as PNC debit cards. This is part of a national trend; over 900 contracts have been signed, often involving millions of dollars, between universities and various private banks across the country, according to a May report from the U.S. Federation of Public Interest Research Groups.
Creating personal savings or checking accounts is an important decision for college students as they begin to establish financial independence from their parents. Georgetown’s partnership with PNC can mislead students at a time when they are financially vulnerable. Whether it’s printing a PNC advertisement on the back of the GOCard, allowing a recruitment table outside the GOCard office during New Student Orientation or simply giving PNC exclusive rights to this debit card service, the arrangement can come off as an endorsement of PNC’s banking services from the university.
That’s inappropriate. When the university makes a business arrangement that was mostly likely based on finding the highest bidder, it does a disservice to Georgetown’s families by suggesting that the bank is also in students’ best financial interests. Furthermore, the U.S. PIRG report noted that many debit card agreements with colleges have allowed captive markets of students to be exploited and student privacy rights to be violated.
It’s not clear whether Georgetown will encounter these problems with PNC. What we do know, however, is that PNC charges higher fees than the Georgetown University Alumni & Student Federal Credit Union in almost every category. PNC has higher ATM and Visa card replacement fees, for example, and offers substantially worse interest rates.
This is not meant to serve as an endorsement of GUASFCU, nor is it meant to say that the student bank should have a monopoly on campus space. It’s perfectly acceptable, for example, for Capital One to also rent space in Leavey Center. While we naturally support any fellow student group like GUASFCU, we don’t expect it to be given unfair advantages in the campus banking market. What we do hope is that such an advantage can’t be bought out by a billion-dollar giant like PNC.
External university partnerships made in the banking industry are a sensitive subject. Huge amounts of money are involved — for the university and PNC, to be sure, but also for the many students who are developing their personal savings for the first time. We respect the university’s interests in capitalizing on lucrative business partnerships, but such a contract can’t come at the expense of students’ best interests.