1983: Iran invades Iraq. Michael Jackson’s “Thriller” hits the airwaves. Brunei becomes an independent country. And on the Hilltop, a few students turn an idea into a Georgetown fixture with the founding of what is now the Georgetown University Alumni and Student Federal Credit Union.
GUASFCU, which pitches itself to potential customers as “A Georgetown Tradition,” bolstered its claim to that status when it celebrated its 25th anniversary this month (making it older than several other university traditions, including GUSA, Chicken Finger Thursday and even Traditions Day). For many at Georgetown, student banking at the Credit Union, anchored in its first-floor Leavey Center office, is a given.
The reality, however, is that GUASFCU is something of an anomaly. Few universities can support a credit union run entirely by students. Among those that can, Georgetown’s credit union is the largest, with $10.4 million in assets and 11,000 accounts. But that level of success was far from assured in the early 1980s, when GUASFCU was in its infant stages.
The idea for a student credit union at Georgetown began circulating in 1982. At the time, the most popular banking option for students was the now-defunct Riggs Bank, which maintained a branch on campus in the old Ryan Administration Building. Alyce Russo (CAS ’84), a transfer student from the University of Massachusetts, was the first to float the idea of a student-run alternative, inspired by the successful credit union she had seen at that school.
Working with Len Schoppa (SFS ’84) and Kyle Stevenson (SFS ’84), Russo began researching the feasibility of opening a credit union at Georgetown. The three surveyed students to assess the level of support for a credit union, and, in particular, how much money students would be willing to commit to it. The response was overwhelmingly positive, as students pledged nearly $500,000. In the university administration, the credit union’s founders found an ally in George Houston, then the university treasurer and a former accounting professor. Houston secured $100,000 in university funds to assist the credit union during its startup phase.
The Georgetown University Student Federal Credit Union received a charter from the National Credit Union Administration on Feb. 9, 1983 (the Credit Union would not include the word “Alumni” in its name until 1994). The NCUA issued 25 such charters that year, seeking to draw customers to credit unions at a younger age. But, in a testament to the difficulties that students face in running their own financial services, only five of those chartered credit unions are still in operation, with other survivors at the University of Pennsylvania, Rutgers University and Miami University of Ohio.
Unlike a bank, a credit union is owned entirely by its members, and does not operate for profit, instead reinvesting any surplus revenues back into its services and dividends for its members. GUASFCU, cognizant of its not-for-profit status, has been run by an all-volunteer staff – from the lowliest teller to the chief executive officer – throughout its history.
“When people apply here, they realize they’re getting a learning experience,” said Cyril Vergis (MSB ’08), the outgoing CEO. He noted that GUASFCU’s most recent round of teller hiring was feverishly competitive, with 150 people applying for 16 spots.
David Walker, a professor in the McDonough School of Business who has served on GUASFCU’s board of advisors, said the NCUA has always been particularly wary of how the high level of staff turnover affects management of a student credit union. But the Credit Union’s longevity is a testament to the strong sense of community among its staff and a tradition of mentorship that have allowed it to adjust to virtually any changes in the marketplace.
Greg Annick (GSB ’86), who served alternately as chief financial officer and treasurer of GUASFCU, helped guide the Credit Union through its earliest years, when it transitioned from paper records to fully computerized recordkeeping.
“There are many businesses out there that would aspire to run as professionally [as GUASFCU],” Annick said.
Little more than a decade later, the Credit Union faced the challenge of working in an industry that was increasingly moving its services online. Chris Villar (MSB ’02), who served as chief operating officer and CEO, noted that the Credit Union made leaps forward in technology during that period.
“Everything was kind of hitting on all cylinders,” he said.
The Credit Union’s growth during that period also led to an historic achievement. The NCUA, which audits GUASFCU each year, rates each credit union on a 1-5 scale. A score of one, the highest, is normally withheld from student credit unions because of their exceptionally high turnover. After some intense lobbying on Villar’s part, however, NCUA gave the Credit Union a one, the first – and only – time a student-run credit union has achieved that score, according to Walker.
The most recent challenge to the Credit Union came in 2004, when Chevy Chase Bank opened a branch in Leavey Center. GUASFCU took a hit against the new competition, Vergis said. The number of incoming students who opened accounts with the Credit Union, which had previously been around 80 percent, fell to around 70 percent. Assets, which peaked in 2003 at $12.4 million, have since taken a tumble.
Since then, GUASFCU has tried to tailor its services more specifically to Georgetown students. In 2006, a deal with the Allpoint ATM network allowed students to access their GUASFCU accounts free of charge at 32,000 ATMs across the country. The Credit Union also eliminated its fees for online banking at this time.
Earlier this month, GUASFCU held a gala to mark its anniversary, which featured an address by Raymond Hood, the vice chairman of the NCUA. At the celebration, Hood spoke of his Blueprint 2020 Initiative, an attempt to build on the NCUA’s first attempt to attract young leaders to credit unions two and a half decades earlier.
In a letter written to University President John J. DeGioia after his address, Hood commended GUASFCU for its leadership in the credit union industry. “They represent the best of the credit union movement as they are volunteers dedicated to service to their fellow members,” Hood said of the Credit Union.
Villar, who worked at Goldman Sachs for five years after graduating and now runs his own electronic security company, said that the Credit Union’s success would not be possible without the commitment that it instills in its employees, who now totals more than 150.
“People just get addicted to the opportunity,” he said. “It’s not only great from a resume standpoint; it’s great from a personal development standpoint.”
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