He believed such a service could provide students with financial products and advice of better value than they receive from traditional banks.
“I had no issue with the basic logic of what he intended to do,” says Larry Smith, adjunct associate professor of economics, whom Mr. Chen-Wing consulted. “I think he’s correct that students have some significant money for the first time in their lives and that there’s a gap in their knowledge [of what to do with it].”
Today, Mr. Chen-Wing’s vision is moving closer to reality. He has done his research, is finishing up a business plan and hopes to see the service launched “within a year or two.” He has already enlisted 250 student supporters and named four students as directors of the key departments.
Along the way, he’s made some adjustments. The target clientele has expanded to include nearby Wilfrid Laurier University. And rather than try to start up an entirely new credit union – “only two have been chartered in Ontario in the past 30 years,” he notes – Mr. Chen-Wing will partner with an existing institution.
“We would have the same relationship with a credit union that President’s Choice Financial has with CIBC,” he says, referring to the Loblaw/CIBC venture that delivers banking services in Loblaw’s supermarkets and online. He’s discussed such ties with a few credit unions and found “at least in principle, some interest.”
The project’s aim is to attract a modest one- or two-percent market share on the two campuses in its first two years. Though students can expect a slightly better interest rate than the banks offer, the real value will be the advice to students on how to manage their money, says Mr. Chen-Wing. “Our pitch will be the products and the planning tied together.”
The Waterloo initiative’s role model is Georgetown University’s credit union, which now controls US$12 million in assets and is the biggest student-run financial institution in the U.S. As at Georgetown, the Waterloo initiative will rely for staff on student volunteers – many studying accounting or economics. Mr. Chen-Wing recently finished his third year in economics; he already has a science degree from U of Waterloo.