The recent credit crunch in the U.S. economy has led national credit unions to lobby for lower interst rates, an effort supported by Georgetown’s own credit union.

“The credit union industry as a whole has been successful through the credit crunch, even with the market not doing so well,” said Dan White (MSB ’09), chief financial officer of the Georgetown University Alumni and Student Federal Credit Union.

The largest student-run credit union in the nation, GUASFCU has about 6,000 members and around $10 million in assets, according to White. It is a member of the Credit Union National Association, an organization that oversees more than nine in 10 of the nation’s state-chartered and federally chartered credit unions.

White said CUNA has been instrumental in advocating for the interests of student credit unions.

“They have made a strong push nationally in support of student-based credit unions,” he said.

CUNA has recently emerged as a key force in responding to congressional legislation that excludes credit unions from lower federal interest rates that currently go to for-profit student loan lenders. Though the higher rates are bad news for many credit unions across the country, GUASFCU has not been affected as much as larger credit unions have been.

“We are not directly affected because we do not offer federally backed student loans. But we support the credit union movement,” White said.

any of the larger credit unions have started to lobby Congress so that they may become eligible for the lower rate, The Chronicle of Chronicle Education reported. CUNA is not yet fully involved in these lobbying efforts, but CUNA spokesman Pat Keefe said that the organization will be including college credit unions in the lobbying effort, according to The Chronicle.

GUASFCU is not as involved in the movement primarily because they do not offer federal student loans and because other credit unions are larger and have more assets. A 2006 NCUA report said that the average credit union holds $79 million in assets and that more than half of all credit unions have less that $12 million in assets.

However, as the credit union continues to expand, White said, GUASFCU would become more and more a part of this effort on behalf of credit unions.

White also said he thinks the larger credit unions also deserve the rate cut because private investors would not be benefiting from government assistance.

“I agree that credit unions should receive the more favorable terms, but I think because credit unions are non-profits, the profits that are made aren’t made for outside investors,” White said. “At least with them lobbying, they should have done it when the original bill came out, not now.”

As for GUASFCU’s future in the midst of tough financial times, White remains optimistic.

“[GUASFCU] just celebrated our 25th anniversary in February and going forward, I see nothing but continued success for the credit union,” he said.

Have a reaction to this article? Write a letter to the editor.

Comments are closed.