UNC-CH Students Could Open N.C.’s First New Credit Union in Two Decades

When Shiva Rajbhandari arrived at UNC-Chapel Hill three years ago, he quickly ran into a problem. 

He needed somewhere to deposit the thousands of dollars awarded to him as part of his Morehead-Cain scholarship, but the credit union where he’d banked growing up in Idaho wouldn’t accept a transfer that large through its app. He considered opening an account with a bank in Chapel Hill, but he was passionate about climate activism and had pledged to avoid using banks that invest in fossil fuels—including banks close to the UNC-CH campus like Wells Fargo. And he wasn’t eligible to join the State Employees’ Credit Union, which generally requires its members to be state employees or related to one.

“I did not have a banking option besides these big banks,” Rajbhandari told The Assembly.

Soon, though, Rajbhandari realized he might be able to create a solution: starting a credit union for UNC-CH students, run by UNC-CH students. Similar models have existed at Georgetown University and the University of Pennsylvania for about four decades. 

The benefits were plentiful in Rajbhandari’s eyes. Designing a credit union specifically for students would allow its offerings, including loans, to be tailored to their needs. Additional services like financial literacy education would help students better understand concepts like credit, a particularly pressing need given the rising debt and economic uncertainty that many in Gen Z are facing. And since credit unions are nonprofits, the organization would be able to invest back into the UNC-CH community.

“As a financial institution, you get to decide what products you offer, and the reality is that these big banks have zero incentive to design products that meet students’ needs,” Rajbhandari said. “Students are such a small portion of their market share.” 

Over the next year and a half, Rajbhandari recruited fellow students and worked to create what is now known as the Carolina Students’ Credit Union. They met with state and federal regulators about the requirements to open and insure a credit union, and surveyed hundreds of students on whether they would use a student-run financial institution and what services they would use most. The group raised $400,000 in startup capital through donations from students, alumni, and others, plus another $1.6 million in promised deposits from other credit unions across the country. 

In June, the students submitted a detailed business plan and application for a charter to the N.C. Credit Union Division. The agency told The Assembly it does not have an estimated date for approving the charter, as it is “continuing to work with the organizers of the proposed credit union and the [National Credit Union Administration] to make a final determination.” But organizers say they expect approval in time for the spring semester. Membership will be open to students and their families, and graduates can keep their accounts after leaving UNC-CH.

That would make Carolina Students’ Credit Union the first new credit union to open in North Carolina in more than 20 years. The students say it would also be the country’s only student-run credit union at a public university.

In the meantime, the group of about 45 students behind the initiative still has work to do. 

When the credit union opens, the students will dedicate 10 hours a week each to working as tellers and overseeing every aspect of operations, from technology to human resources to marketing. They won’t be paid, though Rajbhandari said he hopes to eventually offer stipends for students who work over the summers.

Currently, they are focused on studying and perfecting the standard operating procedures they’ve developed. That includes basic interactions like greeting visitors to their office—which is just off campus in the Innovate Carolina Junction on Rosemary Street—and more complex processes like troubleshooting issues that might arise with electronic transfers to members’ bank accounts.

“It helps minimize any risk, and people can feel confident in actually running the credit union,” said Calie Justus, a UNC-CH junior who serves as the group’s chief financial officer.

The students, who are generally studying public policy, business, or economics, expect to gain real-world experience that will help them in their careers. 

“We’re not going to teach you how to do a coffee chat,” Rajbhandari said. “We’re going to teach you how to reconcile a balance sheet. And you’re actually going to do it, because if you mess up, people could lose thousands of dollars.”

But like Rajbhandari, who is studying public policy and chairs the credit union’s board of directors, many of the students involved with the initiative are driven by their deep personal connections to the work. 

“We want a credit union that’s run by students because students actually understand the daily challenges that students face,” Rajbhandari said.

Justus, for instance, is passionate about financial literacy. She grew up a member of the State Employees’ Credit Union, but said she didn’t fully understand how credit unions differ from banks or the benefits that they offer until she was older. She hopes that the Carolina Students’ Credit Union can educate more UNC-CH students through workshops and one-on-one coaching about financial decisions.

“Since it’s a public university, it has a very diverse student body that can be served better with more financial options and people who are willing to sit and guide them through processes,” Justus said. “Because students who, maybe like me, don’t have parents who are putting them as authorized users on their credit cards from a young age have less access and less options and education than some other students may have.”

In a statement to The Assembly, a UNC-CH spokesperson said the university “recognizes that students have diverse financial needs” and noted the Carolina Financial Well-Being Center offers several resources to foster financial literacy among students, including one-on-one coaching on budgeting, credit cards, and loans. The university does not currently have an official banking partner, per the spokesperson.

“The University values student initiative and entrepreneurship and encourages Carolina students to pursue innovative ideas that address challenges, solve problems and make a positive impact on people and communities,” the statement read. “We appreciate students who take the initiative to explore new opportunities and bring their ideas to life.”

The credit union plans to offer several services to help students with low or no credit, including credit-builder loans that help members establish a positive payment history. Additionally, short-term, low-interest “internship loans” will be available to help cover rental deposits for those who may not have the upfront cash to pay for summer housing.

While the credit union will be open to any UNC-CH student, international students may find membership particularly helpful. 

Hasvi Muriki, a sophomore from Hyderabad, India, was inspired to join the effort after facing financial barriers when she arrived in the U.S. last year at 17 years old. In her home country, Muriki said, many financial transactions use cash, a stark contrast to the digital and card-based systems that are omnipresent in the U.S. It took her three months after enrolling at UNC-CH to open an American bank account and get a debit card, a process she said was delayed because she was young and didn’t have a Social Security number until she secured an on-campus job. At the Carolina Students’ Credit Union, she hopes students in situations like hers will receive dedicated, one-on-one help from their peers.

“I feel you only know the problem, truly, when you experience the problem yourself,” Muriki said. “I’ve experienced the problem, and I don’t want the next person to face it.”

The students behind the credit union recognize there will be challenges in running it—namely that college students turn over every four years, which could make sustaining the effort difficult. But Rajbhandari said interest appears to be growing: In the three recruitment cycles the group has run so far, they received more than eight times as many applicants as they could accept. 

The group has learned several valuable lessons from conversations with the students running credit unions at Georgetown and Penn, and the CEOs of both sit on the advisory board of the UNC-CH union. Still, there are marked differences between them. For instance, startup costs were lower for the other credit unions when they started in the 1980s because they didn’t have to pay for banking technologies like mobile apps, Rajbhandari said.

Rajbhandari hopes the effort at UNC-CH will inspire students at other universities to follow suit; the group is compiling a step-by-step guidebook to help those who might be interested. For now, though, he is excited about the possibilities on his own campus.

“What we are doing at UNC, the nation’s first public university, is we are putting the economy back in public hands,” Rajbhandari said. “It doesn’t matter if you are a student from Gastonia who’s on full financial aid, or you are the child of a billionaire at our school, you are going to have a say in what happens with your money.”