retail news in context, analysis with attitude

The Wall Street Journal this morning does a second-day story about the decision by Amazon and Wells Fargo to end a two-month partnership designed to offer lower cost college loans to Amazon Prime members.

According to the Journal, there was a lot of political pressure on both companies, which emanated from concerns that private college loans could end up being far more expensive than federal loans, despite the fact that the product offering was positioned as being less costly. The Institute for College Access & Success, which is funded by organizations such as the Ford Foundation and the Bill & Melinda Gates Foundation, put out a statement saying that the deal was “a cynical attempt to dupe current students who are eligible for federal student loans with a record low 3.76% fixed interest rate into taking out costly private loans with interest rates currently as high as 13.74%.”

The statement led to a complaint made to several US Senators, which resulted in a referral to the Consumer Financial Protection Bureau, which the Journal says "has been critical of private student lending." The upshot was that the level of political concerns about the arrangement led Amazon and Wells Fargo to cancel the deal, apparently concluding that it would end up being more trouble than it was worth.
KC's View:
I wonder how many categories or segments out there are more trouble than they're worth, but retailers continue to be in them simply because they always have.