When Georgetown University senior Kyle Stevenson goes for recruitment interviews in the spring with banking institutions scouting the campus for entry-level trainees, he might, if offered a job, have to accept a demotion. ut in his senior year, Stevenson can enjoy top rank as president of the newly established Georgetown University Student Federal Credit Union. He oversees the credit union's assets, which have grown from zero to $150,000 in eight months of operation.
"A credit union," says Stevenson, "is a group of people, sharing a common bond, who pool their resources to provide services to members. In this case, we're providing low-cost financial services to students."
The GUSFCU was granted a charter by the Washington-based National Credit Union Association on Feb. 9, making it the District's first student credit union and the first at a private U.S. university. (Skidmore College and the University of Chicago have recently received charters, too.) Georgetown's union is patterned after student credit unions at the public universities of Massachusetts, Connecticut, and Maine, each of which operates with close to $1 million in assets.
The credit union, whose membership is open to GU students and alumni, had 330 new accounts since the beginning of the fall semester, with a substantial deposit of $100,000 from Georgetown University. Since the credit union is a corporation, it offers dividends quarterly.
Students who formed the credit union saw a number of reasons for bringing it to campus, even with the presence of a Riggs National Bank branch at the university, and many local banks nearby.
"We're not competing with Riggs or any other bank," says Len Schoppa, credit union vice president, "but a credit union run by students for students offers an attractive alternative to the hefty fees charged at commercial banks. It might at some point help relieve some of the problems students have been having securing loans."
Riggs Bank is the depository institution which holds the Union's assets.
Says credit union Treasurer Alyce Russo, "the banks in D.C. offer services to a variety of customers and just can't be sensitive to student needs, such as low service charges and student financial problems. We, as students, and concerned only with students, can."
The credit union's nonprofit status and volunteer labor force helps eliminate service charges for the students.
"We pay our tellers and managers no money, but the second reason we created the credit union was to provide a chance for the Georgetown student to learn about how to operate a financial institution," says Russo. The credit union's directors are trying to convince the university to give its employes academic credit as an incentive.
The union is now giving only small loans for members with emergencies. But Schoppa and others think that the union's loan-making role will be important in the future. "Most students can't get the loans they need anymore. Perhaps we understand the student problem a little better, and when we can, we might be able to help a little more," he said.
Creating trust in a student-run credit union concerns Stevenson, but he says, "First, we're insured by NCUA for $100,000 per member , and secondly all our investments are strictly regulated and restricted." The union can only make investments that are backed by the U.S. government, and it has created two watchdog committees and is audited yearly by the NCUA.