Lost among the debate over whether student-run branches in schools are worthwhile is a little-asked question: How do credit unions get into the schools in the first place? Advocates of student-run branches argue that having an in-school presence enables credit unions to promote financial literacy and connect with the younger generation. Although largely intangible until years later, the benefits of these branches become apparent, advocates say, when these schoolchildren grow up to become active users and lifelong cooperative members.
CU QUICK FACTS
SUNCOAST CREDIT UNION
data as of 03.31.14
HQ: Tampa, FL
12-MO SHARE GROWTH: 5.11%
12-MO LOAN GROWTH: 7.02%
The process, though, of setting up a school branch can often be challenging. Every school district has different rules and hurdles for credit unions to overcome. Protective parents, skeptical teachers, and wary administrators also might be reluctant to allow outside organizations, even those with good intentions, into the schools.
With 58 student-run branches between them, Apple Federal Credit Union ($1.8B, Fairfax, VA) and Suncoast Credit Union ($5.7B, Tampa, FL) know more about the process of establishing a school branch than most cooperatives. Their advice follows in the form of these four tips, including a surprising suggestion about which schools make more sense to target.
Advocates Offer A Way In
Apple operates 26 student-run branches, all but two at high schools, with the first one established 18 years ago at Robert E. Lee High School in Springfield, VA. How that first branch, which is still open today, came about serves as something of a blueprint for getting the process rolling.
The timing was certainly fortuitous. This was a time, Dave Gorham, Apple’s director of market sales says, when student-run branches at colleges were popular, and high schools were starting to jump on that bandwagon. The idea of a high school branch began because the credit union had an advocate at the school, a teacher and longtime credit union member who approached Apple about opening a branch there.
Today, the process starts the same way, with the school initiating contact rather than the credit union. Usually, a teacher or another contact at a school approaches the credit union about the possibility of opening a branch. From there Apple talks with the teacher to gauge the school’s level of commitment before meeting with the school principal who, Gorham says, must be on board to move forward. Suncoast Credit Union has observed a similar pattern in the way its 32 student-run branches began, with the first one at Brandon High School in Brandon, FL, in 2002.
The Younger The Students The Better
Suncoast initially established student-run branches in high schools on the assumption that those kids would be more active users because many had jobs and money to deposit. Opening a branch at Alafia Elementary in Valrico, FL, in 2007 — Suncoast’s first in a primary school — turned that assumption on its head. Since then, Suncoast has added others and currently operates 10 branches inside elementary schools. On average those branches have 50 deposits a day; a high school branch typically sees no more than 10.
CU QUICK FACTS
data as of 12.31.13
HQ: Fairfax, VA
12-MO SHARE GROWTH: 9.38%
12-MO LOAN GROWTH: 4.73%
Elementary school branches offer other key differences. Hours are earlier, with branches opening before school starts, whereas high school branches have hours to coincide with the students’ lunch break. Unlike their older siblings, these youngest credit union users also need help from parents, older students, or credit union volunteers, but there’s no denying the enthusiasm elementary kids have for opening their first account.
“They get so excited about saving money,” says Suncoast’s youth marketing manager Juli Lewis, under whose guidance the credit union’s 32 student-run branches are run. Because many of these kids get an allowance, “they are able to save it and see it grow rather than just looking for something to spend it on.”
As a result, Lewis adds, these branches “seem to be more influential for the students.”
Proposals That Beat The Competition’s
At some schools, work on the branch can begin with just a signed contract and a handshake, but at others, the credit union might need to go through a lengthy procurement process that includes submitting a formal proposal. Typically, that means tailoring proposals to satisfy the policies and procedures of the school districts.
“How they choose to do business guides you, the credit union, on how you are going to be able to put a student-run credit union in the school,” Gorham says.
That process can be rigorous. Even though a teacher at Alafia Elementary approached Suncoast about establishing a branch, other teachers at the school questioned the fairness of not considering local or national banks as well. That led to Suncoast competing against several local banks for the contract.
For the formal pitch to school officials, Lewis put together a packet that included pictures of the credit union’s other school branches as well as sample deposit slips and bank balance registers. She explained how the credit union taught students to use those deposit slips and registers and provided statistics from Suncoast’s school branches to show what they had achieved.
Above all, she presented the benefits from the student’s perspective: “Hands-on experience with credit union operations, learn to work independently and as a team, strategize new ways to increase membership and deposits, and learn money management skills,” Lewis says, listing those benefits.
The presentation was a hit with the teachers in the room, who awarded the contract to Suncoast.
“They said that’s the type of program we want,” Lewis says.
An Enhanced Curriculum Begins In Shop Class
In Apple’s experience, the schools typically choose the space for the branch, which might be in the cafeteria, a former faculty lounge, or, in at least one instance, what was once a janitor’s closet. Generally the credit union builds kiosks, similar to those found at a shopping mall, to serve as the branch. Apple even paints the kiosks to resemble the credit union’s full-service locations.
The schools run the branches jointly with the cooperatives, a partnership that makes perfect sense to Apple. Any chance it gets, the credit union looks for ways to integrate the branch’s operations into the school curriculum, and occasionally that opportunity starts with the branch construction itself. Apple has been known to farm out the branch construction to students in the high school’s shop class, paying the school’s rate for time, labor, and materials.
The credit union spends anywhere from $700 to $1,000 on the branch’s construction, with up to a few hundred dollars more depending on how much paint is needed. Credit union employees volunteer time over the summer when school is not in session to finish any portion of the branch’s construction that wasn’t contracted to the students. And although Apple views the upfront costs as a worthwhile investment, it’s the students’ reactions the credit union considers priceless.
The experience the kids in shop class get from building the kiosk is worth its weight in gold, Gorham says.
“It’s a totally different look and feel we get on opening day.”
That difference, he says, is the students’ pride in the branch they built.