NEW BRUNSWICK, NJ—This year, many Rutgers University students are spending more on ATM fees, after the school inked a deal giving Chase Bank an exclusive monopoly on all of the campus' money machines.
The deal eliminated on-campus ATM's operated by PNCBank, Bank of America and Wells Fargo. It also pushed out two popular university-affiliated credit unions, each with a decades-long connection to the community.
Credit unions are similar to banks, except they are owned and democratically controlled by their members.
In both cases, the university incorrectly argued that the Rutgers credit unions were not affiliated with the university and officials said they would have to prevail in a public bidding process to earn their spots on campus.
The Daily Targum reported on January 29 that Chase's new monopoly on campus ATM's, implemented quietly over the summer, also caused Rutgers to renege on a verbal agreement made with the Rutgers Federal Credit Union.
The RFCU's two branches remain open, but the university broke its promise to open two additional RFCU ATM's, according to the report.
Elizabeth O’Connell-Ganges, director for Rutgers Student Life, told the Targum that although the University agreed to give the Rutgers Federal Credit Union two on-campus ATM locations, it was forced to rescind its offer "upon discovering that the RFCU is not affiliated with the school."
But Gordon Stankavage, chair of the RFCU Board of Directors, challenged the claim in a subsequent letter to the editor published by Targum last Monday: "RFCU is most definitely affiliated with the University — and has been since 1954 when eight faculty and staff members founded it.”
Stankavage said that the RFCU may be a "separate and distinct not-for-profit cooperative," but it is one that has "enjoyed a long association with the University," and participated in community events for decades, something not true of Chase Bank.
The situation is reminiscent of the university's successful attempt to squeeze out another credit union in anticipation of the Chase deal.
The Rutgers Student & Alumni Federal Credit Union operated a branch in the basement of the Rutgers Student Center, but was not permitted to renew its lease upon its expiration in 2011.
The university claimed that RUSA FCU lost their affiliation with the school after merging with Affinity, the largest credit union in New Jersey. At the time, officials said that the space occupied by the branch would be rented to the winner of an open public bidding process.
But, the result was not a new tenant for tiny space occupied by the credit union, which is now used for storage. Instead a very different bidding process was conducted resulting in Chase Bank's takeover of the on-campus ATM market.
Nancy Winterbauer, Vice President for University Budgeting told NewBrunswickToday.com that Chase pays $1,800 monthly rent on each of 7 ATM locations on-campus.
Patrick Savolskis, business manager for Rutgers Student Life, said that a committee set up by his department was responsible for overseeing the decision of which banks would be granted ATM locations on campus.
According to the Targum, Chase was chosen by this committee as the best option after analyzing options by criteria on a confidential "score sheet."
The opinions of Rutgers students, however, were not taken into account during the process, much to the chagrin of student leaders.
Marios Athanasiou, an organizer with the Rutgers Student Union, said he was "shocked and upset" to hearing about the school's deal with Chase.
"To just announce that, unless you have this one specific bank, suddenly you don’t have an ATM at a student center you can use without a fee... seems disrespectful of the relationship between the University and its students," Athanasiou said.
Pavel Sokolov, treasurer for the Rutgers University Student Assembly, also disagreed with the decision.
"It’s important for our university to focus on its students and put their concerns before corporate profits," Sokolov said.
The Daily Targum's editorial board agreed with the disgruntled student leaders, opposing the deal in an editorial published on September 10, 2012: "The University almost intentionally ignored, or at least failed to consider, those students and faculty for whom such a change would have posed an inconvenience."
"We can see no reason why, if catering to student needs was in their list of priorities, the University couldn’t afford their students more than one option by keeping more than one ATM service provider on campus."
Editor's Note: The editor of this newspaper is a former board member of the Rutgers University Student & Alumni Federal Credit Union.