School Branches Earn High Grades For This Ohio Cooperative

Back to school means back to work for what might be the nation’s largest network of student-run credit unions.

Atomic Credit Union ($532.5M, Piketon, OH) has just opened its 58th such branch, and as the 2022-23 school year dawned, had a staff of 421 volunteer student workers building their skills while helping classmates and staff build on their personal financial wherewithal.

The program began 11 years ago with five branches in the Jackson City School District and grew quickly as other school districts sought out the same services for their elementary, middle, and high schools across the cooperative’s sprawling 19-county FOM in southern Ohio.

Tom Griffiths, Atomic’s president and CEO, says he’s not aware of any institution with more school branches than his cooperative, and it’s not just size that differentiates the program.

“The unique thing about our program is that we operate our branches on a weekly basis,” he says. “There are several programs similar to ours in some respects but they just go to the schools once a month.”

Individual Hours. Individual Brands.

That kind of availability could prove taxing to operations, but Atomic allows each school to set its own hours. Some are open in the morning, some at lunch, and some in the afternoons. Also unique to each branch is its branding, using the school’s logo or mascot.

“Jackson City Schools use the Ironmen as their mascot,” Griffiths says. “And they have the Ironmen Student-Run Credit Union. Our marketing department uses the school’s logo and adds our name and logo to it.”

What the student branches all share is a range of products that include savings accounts, checking accounts, and, with parents’ permission, ATM cards for children 10 and older and debit cards for children 13 and older.

“Our intent is to teach students the importance of saving consistently and train good financial habits,” Griffiths says.

And because that kind of training should be available to everyone, the credit union provides each student with an initial deposit to open an account to ensure there is no one left out of the program.

The numbers add up. According to Griffiths, at latest count the credit union has 5,827 active accounts with deposits totaling $3.1 million. The student-run members perform more than 100,000 transactions a month through channels that include ACH, ATM, school branch, regular branches, debit cards, and digital banking, the veteran CEO says.

Starting The Career Process Early

The branches are located in private and public schools, including several vocational/career technology centers.

“Those students are very active in the program,” Griffiths says. “Most of them have part-time jobs after school, and they have a stream of income to manage through their account.”

The volunteer staff at all the student-run credit unions, meanwhile, get some valuable experience of their own.

Each student worker is interviewed before the school year to determine which position might be best for them, Griffiths says. For many, this is their first job interview.

Positions include branch manager, data entry specialist, bookkeeper, member service representative, and teller. Along with learning work skills, participating in the student-run branches prompts the volunteers to think about what kind of career they might want to pursue in the future.

“Whether it’s banking or something else, it’s important to start this process early,” the Atomic CEO says.

Building An Image And A Workforce

That process has produced a stream of full-time employees for Atomic Credit Union. Griffiths says 30 student volunteers have made the jump to credit union employee since the student-run branches first opened. Of that, seven are still a part of the credit union’s staff.

“They’ve worked as tellers MSRs, and indirect lenders,” Griffiths says. “They’ve also worked in our legal department and in risk management.”

Griffiths, who has been CEO for the past 20 years, says the idea first came about as a creative way to grow membership while spreading the credit union message.

“After researching several ideas, the concept emerged of offering a student-run credit union program within our chartered area of southern Ohio,” the CEO says. “We knew that would make a bold statement, especially since no other financial institution offered such a program. I realized this program could make an impact in our communities and with the youth at the same time. We were in the position to harness the Power of Being First.’ I envisioned the youth of our communities recalling Atomic Credit Union as their first bank account, and hopefully their only bank account in the future.”

And sure enough, overall member growth also gets a boost as student members transition into adulthood.

“Every year we have students cycle out of the youth category and into the adult category as a regular member,” Griffiths says. “It’s gained a lot of recognition for being a great teaching tool for the students who work there or are simply just members, and it’s helped us gain a great deal of recognition in the community.”

A Million Dollars A Year And Now Turning A Profit

The extensive student-branch program also comes with a good bit of cost, nearly $1 million a year, and its own department headed up by a director of financial education. The staff comprises four full-time employees, and the program occasionally calls in five part-timers and regular branch staff to help ensure compliance with a state law that requires a dedicated credit union employee be on-site overseeing each student-run branch during its open office hours.

The student-run program is a big-ticket expense item every year, Griffiths says. And it continues to climb year-over-year.

Luckily, this doesn’t come as a surprise. The credit union and its leaders knew the commitment would require taking a long view.

“It was presented to the board of directors as a long-term investment to the communities we serve as well as the credit union’s bottom line,” the CEO says. “I warned them not to expect this program to be profitable for more than a decade. We achieved financial profitability for the program in May 2020, approximately nine years after the first school branch opened. It continues to increase in profit every month as more students graduate and obtain jobs, loans, credit cards, and debit cards.”

The program has proved a success to Atomic in more than just a financial sense. In the program’s 11-year history, not a single student branch has closed.

“This is a remarkable indicator of how well the schools appreciate the program,” Griffiths says. “There’s one school that has not canceled the program, but they still have not allowed outside partners to enter the school due to COVID restrictions put in place by the superintendent. We’re hoping to return to that school next year.”

Griffiths says the program’s ROI is essentially immeasurable, but Atomic is pleased with the growth in business and reputation.

“You would be hard-pressed to find a graduating senior in our chartered area of Ohio who doesn’t know who Atomic Credit Union is,” Griffiths says. “Not only do we find that the students open an account, but their parents do as well.”