University Credit Union Seeks to Set Industry Standard in Mobile Banking

Origins in the University System Form “Relentless Focus” Today

“We were founded by the university community to serve the university community,” says David Tuyo, the CEO of California-based University Credit Union (UCU).

In 1951, employees of the University of California Los Angeles (UCLA), now the #1 ranked public school in the nation, established a credit union to serve the needs of their fellow employees. Over time, the credit union has expanded to four physical branches; membership availability extended to the employees, students, and alumni of dozens of institutions; and a digital banking experience that rivals that of the most preeminent banks—but with better rates on nearly every product and service.

“It is a pretty amazing story,” Tuyo says, “University employees saw the value of having a credit union specifically focused on the university community. And the expansion has been—and continues to be— grassroots and relentlessly focused on the university community.”

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Membership is now offered to employees, students and alumni of UCLA, as well as all the additional schools in the UC system, Pepperdine University, Loyola Marymount University, Santa Clara University, Mount St. Mary’s University, West Coast Conference universities and other universities throughout California. UCU offers a variety of products and services including checking accounts, credit cards, home mortgages, auto loans, personal loans, insurance, investments, as well as mobile bankingand online banking.

The “relentless focus” on the needs of the university includes special attention to the unique demands and opportunities for scholars, professors, and students—among other professionals.

“If you think about what scholars face in the beginning of their careers,” Tuyo explains, “from mortgages to student loan repayment to temporary relocation for residencies, there are a lot of ways UCU can serve them—often at rates that are much more agreeable than what banks and other credit unions offer.”

“When students want to study abroad—particularly undergraduates,” Tuyo says, “they often need their first credit card and if you are not careful about what credit card you choose and whether you use the full line the card agreement allows, it can damage your credit score. We have developed programs for credit that can protect members from unintended, unnecessary damage to their credit scores.”

The Difference Between a Bank and a Credit Union

UCU leadership often used the phrase “better by design” when describing their business model. While UCU may look like a bank with its products, services, and superior digital experience and offerings, its distinction as a credit union offers greater value for its members than a bank can.

Governed by a volunteer board of directors (rather than a paid board of directors, like those that are customary in banks), UCU is able to keep the needs of members at the forefront of every high-level business discussion. Represented on UCU’s board are academics, university treasurers, the first Latina commissioner of a collegiate sports conference, university alumni, current administration, as well as faculty and staff.

Members are not just numbers or abstractions at UCU. “We know exactly who we are serving,” Tuyo says.

Another point that distinguishes UCU from banks: No shareholders. Rather than paying out dividends to shareholders, UCU pays back profits to its members in terms of interest rates that are consistently ranked among the 1% most competitive nationwide.

“The benefits of a credit union are seen during bad economic times: we are not rigid and rules based, we can offer extensions and modifications that are based on the member’s needs. The focus on members—rather than shareholders —allows us to be responsive in this way on a case-by-case basis.”

Investment in the Digital Experience Allows UCU to Be Among the Best in the Nation

UCU embarked on an initiative in 2017 to become among the best credit unions in the United States. They asked themselves: “How do we become a leader in the space?”

The answer was clearly to establish a culture of being a consistent innovator in the digital credit union experience. In today’s environment, that means being “digital first.” In other words, being the sort of institution where members look to the credit union’s online platforms before calling a 1-800 number or visiting a branch.

In addition to building a best-in-class mobile and desktop experience, UCU also committed to rolling out new features, products, and services that add value to members’ lives on a monthly basis through its University Credit Union app.

The inspiration for monthly innovation owes to a teaching from bestselling business author and Stanford graduate, from his book, Great at Work. Morten’s nugget: Great businesses are not consistently great, but great at being consistent.

“Each and every month,” Tuyo asserts, “We are going to be rolling something out that is going to improve the daily financial lives of our members.”

Examples of recent innovations available through the UCU app include education modules, video banking on an encrypted platform that allows robust interaction with bankers, and streamlined auto loan application forms that offer rates guaranteed to be among the lowest 1% available in the marketplace.

Looking ahead to the future, UCU wants to continue to be involved in members’ causes and communities. This includes extending scholarship opportunities to youth aspiring to attend member institutions, volunteering with local nonprofits, sponsorship of community-enriching activities, and event sponsorship.

“Our core purpose is to give the members of the university community the financial edge,” Tuyo says. “We give back to our members through the excellent rates we provide as well as direct community support.”

Federally insured by NCUA

UCU guarantees that our lowest loan rate for cars (based on a 60-month term), credit cards, consolidation, and HELOCs are in the top 1% nationwide as measured in a monthly rate survey by Rate Watch, a part of S&P Global.

This content was provided by Financial Service Directory. Kiplinger is not affiliated with and does not endorse the company or products mentioned above.