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MSUFCU paid MSU $100,000 image royalties last year

September 7, 2011

The Michigan State University Federal Credit Union, or MSUFCU, paid MSU about $100,000 last year through a new royalty agreement, according to credit union officials.

Royalties were paid as a part of a contractual agreement between the university and MSUFCU which, for the first time, allows the financial group to use branded licensing of university images and logos on its credit cards, said April Clobes, MSUFCU’s executive vice president.

MSUFCU also paid about $50,000 to Oakland University in 2010 through a separate licensing contract.

Under the terms of MSUFCU’s agreement, the bank made one payment to MSU after initiating a contract with the university right before the end of 2010, Clobes said. Prior to that, Bank of America paid MSU about $357,000 in 2010 under a similar licensing agreement.

“The goal is for the funding to be generated from issuing the cards,” Clobes said when discussing MSUFCU’s payment method under its MSU contract.

“We market our cards to alumni of MSU.”

MSUFCU could not confirm how many alumni have credit card agreements with the credit union.
MSU Alumni Association Executive Director Scott Westerman said he expects the university’s multi-year deal with MSUFCU to continue.

MSU’s licensing agreement allows alumni to show off their school spirit, he said.

“The great thing about the card is that alumni love carrying anything that’s got Spartan colors on it,” he said.

“Especially for those that go to places like Ann Arbor or Columbus, (Ohio), they love pulling out that card.”

Under MSUFCU’s agreement with MSU, the company does not actively target MSU students, although the bank has four locations in East Lansing.

Predental freshman Camille Clark said she became an MSUFCU member out of convenience.

“It’s easy for me here because there are plenty of locations,” she said.
“(Being a bank member) makes you feel like it’s part of your college.”

Many state schools also maintain similar contracts with other credit unions.

According to a recent Federal Reserve report, Michigan universities and alumni groups made more than $2.6 million from agreements with credit card companies last year.

Across the country, there were more than 1,000 agreements between credit card companies and colleges and 1.7 million active accounts, according to the report.

The Alumni Association of the University of Michigan received about $1.6 million in payments from Bank of America in 2010, topping the report’s list of Michigan schools.

Aside from Bank of America’s agreements with MSU and U-M, no Michigan school made more than $200,000 from an agreement with a credit card company in 2010.

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