Michael Crow sold us out.
A copy of the contract between ASU and MidFirst Bank was obtained through a public records request and shows MidFirst is paying ASU $1 million the first year, then $350,000 per year for the next 10 years in order to sell students and staff its banking products.
ASU will get $15 for “each new Active Student Checking Account” and $2.50 for every year the student keeps the card.
On top of that, ASU “will earn incentive-based transaction royalties at a rate of four cents for each Bankable Student ID Card Approved POS Transaction.” That means ASU gets four cents every time a card is swiped, according to the ASU MidFirst Bank contract.
ASU also gets $15 for each “Affinity Checking Account” and $6 every year it’s active. ASU will get ten cents for every card swipe at this account level. These figures apply to faculty and staff as well.
Those rates are for checking accounts. If somebody goes into a MidFirst branch and opens an ASU credit card, or opens one online, or through advertisements by the ASU Foundation or any ASU social media, ASU gets $45.
MidFirst pays ASU an additional $3 for cards “initiated through MidFirst-funded direct mail.”
Additionally, ASU gets “incentive-based transaction royalties” of 30 percent “of consumer credit card interchange-revenue.”
“Incentive-based” is contract jargon that means ASU has a duty to encourage students, staff and alumni to sign up for the cards and to get them to spend.
“Interchange revenue” is a small amount paid to the bank in every transaction. In a $10 purchase from Starbucks, for instance, twenty cents might go to the cardholder’s bank. For ASU-MidFirst cards, ASU gets 30 percent of that amount.
MidFirst will pay an additional $500,000 if ASU starts 60,000 checking accounts by 2014. If ASU reaches 75,000 by 2016, MidFirst will pay another $500,000, according to the contract.
MidFirst gets the sports contracts. The bank will pay $350,000 in 2012, and increase payments by 2 percent per year until 2022 for the annual sports marketing contract.
The bank also gets the “Sun Devil Annual Athletics Inventory” sponsorship rights for an initial payment of $550,000, plus an additional 2 percent every year until 2022, according to the contract.
ASU will have only MidFirst ATMs on campuses. ASU will get 15 percent of the “foreign ATM surcharge income” and 21.5 percent of the “gross debit interchange income.”
MidFirst will be the only ASU affiliated bank, with the exception of Arizona State Credit Union.
ASU is contract bound to “take necessary steps to cause any other entity to cease and desist” retail banking on campus and marketing to students. In addition, ASU “shall take all commercially reasonable steps to actively promote and support the Program and the Retail Banking Services Products.”
More troubling, however, is this: “the University will provide ... all releasable information ... on University students, incoming students, graduating students, Alumni, faculty and staff.”
This is exploitation. Crow is selling access to students and staff and personal information. Education is supposed to be free from commercial influence and pressure, yet we’re being turned into products for sale. The Maricopa County Community College District doesn’t have such an arrangement.
Neither does Stanford.
Reach William at whamilt@asu.edu
Follow us on Twitter or like us on Facebook. Click here to subscribe to the daily State Press email newsletter.
