Last year's COVID-19 shutdown order threw Marc B, who works for a local company, into a financial panic.
"I thought, 'What's going to happen – what if I lose my job?'" he said. Marc sought a loan from his bank, but was denied. He then sought an increase on his credit card limit – also denied.
He eventually found success after following up on a tweet from Stanford Federal Credit Union offering a special Covid emergency assistance program for its members. He had joined the credit union a few years earlier while working in a Stanford lab, and maintained his membership.
"SFCU approved me for a loan right away and gave me a really low interest rate," said Marc, who ultimately was able to keep his corporate job and survive the financial perils of the pandemic. "They were really there for me in a time of need."
The Covid emergency loan program is just one example of the many benefits the credit union is able to offer its members, said Stanford FCU President and CEO Joan Opp. Because the credit union is a local nonprofit, cooperative structure they were positioned to respond quickly to member needs, and to offer favorable rates compared to banks, which must answer to shareholders.
"We're here to serve the community with their financial needs and the pandemic surfaced a lot of financial needs that we needed to quickly respond to," Opp said. "Within hours of the stay-at-home order we launched the emergency program. All in all, we helped thousands of people, including people with lower credit scores."
Most credit unions today are much like full-service banks offering a wide array of financial products. But unlike banks, they are structured as non-profit financial cooperatives, which are tax exempt, allowing the value to be passed along to members.
"If you look at Wells Fargo or Bank of America and compare our rates, there's no comparison," Opp said. "Plus, when you want to reach us, we answer the phone."
Stanford FCU was launched in 1959, after a group of Stanford employees pooled their resources to create a financial institution they believed would be better than a bank and solely dedicated to the Stanford community.
Membership is now available to employees of more than 100 local companies, including Facebook, Genentech, Google, Tesla, Visa and VMware. Also eligible are employees of any business that's a member of the Palo Alto Chamber of Commerce, Opp said. Other avenues to Stanford FCU eligibility include joining the Friends of the Palo Alto Library or the Museum of American Heritage, which anyone can do – and SFCU will even cover the membership fee.
The banking industry has fought back against growing competition from credit unions by lobbying – so far unsuccessfully -- to remove credit unions' tax-exempt status and opposing the relaxation of membership restrictions.
Historically focused on "meeting the credit and savings needs of consumers, especially persons of modest means," credit union membership now includes wealthy individuals as well. According to a 2006 study of 14 million credit union members cited by the Federal Reserve Bank of St. Louis, the income distribution of credit union members closely mirrors "the income distribution of the nation as a whole."
"We're here to give value-added financial services whether you make seven figures or whether you make five," Opp said.
"We serve a lot of highly paid people because we do it well. People that make higher incomes realize they can get everything they need from the credit union. They're getting good value and they're not lining the pockets of shareholders."
Today, Stanford FCU offers full banking services to its 74,000 members, including checking, savings, credit cards with cash back, online banking, wire transfers and a wide range of loans, including auto loans, home mortgages, commercial real estate and business loans. It also offers financial education and wealth management.
This year it will become the first – along with Citi – to offer the new Google Plex account, allowing users to open their account within the Google Pay app for real time transaction, balance and purchase alerts with no monthly fees, no minimum balance requirements and no overdraft charges, among other features.
For members struggling to get a better grip on their finances, Stanford FCU continues to offer free financial counseling as well as interactive online tools on topics like "Money 101" and "Building Financial Capability."
When the pandemic hit last year, Stanford FCU member Jennifer G., a legal assistant in Mountain View, took out an emergency loan to consolidate her credit card debt and, ultimately, boost her credit score.
"I realized I didn't have that six-month cushion and the pandemic made me see the importance of that," Jennifer said. "SFCU gave me an interest rate that was significantly lower than the ones I was paying on my other credit cards." She ultimately transferred her balances to a low-rate Stanford FCU Visa card.
"I'm currently focusing on saving for my down payment to purchase my first home which I will definitely finance with SFCU," Jennifer said. "SFCU is the only bank that has worked with me to get the best deals and reach my financial goals and in such a short period of time, especially during these challenging times."
Stanford Federal Credit Union is a full-service financial institution serving the Bay Area.