University Chase agreement broke deal with credit union
At the beginning of the fall 2012 semester, the University began exclusively hosting six Chase Bank ATMs on the University’s New Brunswick campus, but violated a verbal agreement with the Rutgers Federal Credit Union in the process.
The University had originally promised the credit union two ATMs on the College Avenue and Busch campuses, said Elizabeth O’Connell-Ganges, executive director of Student Life. The school had to rescind their offer upon discovering that the RFCU is not affiliated with the school, she said.
The credit union, a separate entity from the school, must go through the same process as Chase did to rent ATM space, O’Connell-Ganges said. The University eventually gave the spots originally reserved for the RFCU to Chase, which gives the University $43,200 annually in rent from Chase, according to the contract.
CEO of the Rutgers Federal Credit Union, Marie Holowka, said a smaller bank like the credit union could not possibly match a proposal for the University like that of Chase Bank’s.
In September, the Chase paid a monthly fee of $10,800 in rent and collected a total surcharge amount of $17,022 for all six ATMs, according to the University’s contract with the bank and the September transaction history report. The surcharge fee is the cost non-account holders pay to withdraw money from the machines.
Aside from allowing for the construction of three more ATMs around the New Brunswick campus, the contract also set terms allowing the University to oversee Chase’s profits and monitor customer satisfaction among the student population.
Chase is obligated to submit monthly transaction reports to the University, according to the contract.
The University has yet to ask for a periodic report on customer satisfaction, required of Chase, according to the contract.
Patrick Savolskis, business manager for Student Life, said student satisfaction could be checked by looking at each ATMs’ downtime, referring to the amount of time a machine was out of service, which is posted in the transaction report.
The contract between the University and Chase does not necessarily exclude other vendors, but other banks were not interested in partial access to student centers, Savolskis said.
If another bank wanted an ATM they would have to go through the same process Chase did, he said. The University put out a “request for proposal” for the ATMs and Chase emerged as the best option because it met the criteria on a confidential score sheet designed by a committee.
Student Life set up the committee to review which bank would provide ATMs on campus, Savolskis said.
Proposals must exceed $40,000, Savolskis said. When requesting a proposal, he said there are more criteria than profit, but he has never seen the highest monetary offer rejected.
“The best way to get [the best] service was to offer it to one company,” Savolskis said.
Holowka said the University is undermining the credit union, a smaller organization designed to specifically meet the banking needs of students, staff and faculty.
She added she felt the University was monopolizing the campus.
“I feel that is a disservice to the public body to only allow one vendor on campus,” Holowka said. “By selecting only one vendor, the University is forcing — or strictly endorsing — Chase.”
Chase Bank declined on multiple requests to comment.
The agreement between Chase and the University is one of many that guarantee brands such as Pepsi and Wendy’s a competitive-free climate at the school. O’Connell-Ganges said Student Life could not survive without the resulting generated revenue.
“The money [made from Chase] goes back into serving students,” she said. “The only way for us to not cut services is to increase revenue.”
This revenue allows Student Life to employ more than 500 students, support clubs, keep student centers open until 1 a.m. and host a laundry list of other programs and services, O’Connell-Ganges said.
“The reality is that you can want Wells Fargo, I might want Chase, someone else might want something else,” she said. “There [are] a lot of different banks.”