Harvard Requires Student Groups To Move Funds To Credit Union
In an effort to decrease costs and increase fiscal accountability among student organizations at Harvard, college officials said that starting this Fall they would only recognize those groups that do their financial business with Harvard University Employees Credit Union.
Also effective as the Fall term begins, the groups must show proof to the college dean's office that they transferred funds from other institutions to HUECU where they can maintain accounts at no cost, conduct business online or at the CU's main office in Harvard Square.
"I think the college dean's office was looking for a way to benefit the students and simplify the process" for the college's 300 student organizations, said Gene Foley, President/CEO at HUECU. He said some of those groups have large financial balances and endowments, others only small budgets.
It just so happened that HUECU had undergone a field of membership expansion last spring to include Harvard students and alumni. Prior to the expansion, the 65-year-old CU with $200-million in assets had been serving staff and faculty at Harvard and its affiliated organizations.
"We have been very visible to the students for a long time, but we didn't feel we had the size or the mass (to open our FOM) until recently," Foley said.
Frustrated With Banks
He said the continuing consolidation within the banking industry has left many frustrated. The most recent in Cambridge was the purchase of long-time regional giant Fleet Bank by Bank of America, he noted, an acquisition that has been the subject of extensive press coverage in the region.
While one student officer expressed dissatisfaction about not being involved in the decision-making process and the lack of competition this new policy creates, he said they understood the reason for making the move.
"(The new system) is a huge benefit for building increased accountability," said Undergraduate Council Vice President Michael R. Blickstead in an Aug. 20 article in the student newspaper, The Harvard Crimson. "It avoids incidents like Hasty Pudding from happening again and that's good from the University's and our perspective."
Hasty Pudding refers to a scandal in 2001 during which two students apparently embezzled thousands of dollars from the Hasty Pudding Theatricals student organization.
Administrators said the move was made in response to demand by student group leaders last year for "cheaper and more fluid banking solutions," the article stated.
While this new arrangement will allow college officials to have closer contact with the organizations' funds through annual summaries of each account, officials said they have no plans to monitor the accounts individually.
Foley said several organization leaders said they were happy to have the CU as an alterative after being frustrated that banks were charging significant fees-as much as $12 a month to maintain an account-because they did not have their own non-profit tax IDs.
HUECU has already begun helping many of the student organization make the transition, Foley said. The CU is offering transition kits to make the process go smoother and has designated a staff member as the permanent liaison between the CU and the student run groups.
The new policy does not pertain to unofficial groups such as fraternities and sororities. In addition, student groups that are incorporated and have acquired non-profit status will be encouraged but not forced to conduct their financial business with HUECU.