Frequently Asked Questions

Yes. This is not a solution that credit unions will offer directly to members or prospective members. Instead, Employer Choice is integrated with an employer’s payroll system, enabling the credit union to offer services to employees via that employer’s benefits platform, just like health insurance or a retirement plan.

No, but employees of the employer partner will need to fall within the credit union’s field of membership, ensuring that all employees have access to the credit union’s services.

This solution is branded in the credit union’s name. Employer Choice is a technology and management platform functioning in the background to help connect the credit union to employer partners and their employees.

Employer partners will market the availability of credit union financial services the same way they market other employee benefits programs, such as health insurance or 401(k)s – most likely via an online benefits portal. This small-dollar loan is funded and held by the credit union and is designed to help the most financially vulnerable. If not already a member, the employee will need to join the credit union, a process that can be integrated into the loan and/or deposit account opening procedure.

Employer Choice’s flagship product is a no-credit-check loan. This small-dollar loan funded and held by the credit union is designed to help the most financially vulnerable. It allows eligible employees to borrow up to $5,000 in a conforming 1-year term loan that is repaid through automated payroll deductions. Employer Choice is actively working to add functionality that would enable payroll-deposited emergency savings accounts at the credit union, along with incentives to encourage direct deposit.

Yes, there is underwriting, just not with a typical credit score. First, Employer Choice will help underwrite the employers:

  • How long has the employer been in business?
  • Are they financially stable?
  • What is their rate of employee turnover?

Second, this information will allow Employer Choice and the credit union to determine the automated underwriting rules for the employees of that employer:

  • How long have they been employed?
  • What is their payroll frequency?
  • How much do they earn in each paycheck?

Based on these parameters, the Employer Choice team helps credit unions configure underwriting rules to match risk tolerance. Payroll-deducted loan payments are reported to the credit bureaus to help employees build credit.

No, the no-credit-check loan is very different than earned wage access, which allows employees to access a portion of their paycheck before the scheduled payday. 

The no-credit-check loan is a term loan repaid over a full-year, through automated payroll deductions. Pew Research suggests that the average size of an unplanned, unbudgeted financial shock is about $2,000, such as a car repair replacing an appliance. The no-credit-check loan helps employees cover larger costs without having to turn to predatory lenders or other forms of high-cost debt.

While Employer Choice is a new offering from Student Choice, the concept of small-dollar consumer loans made available through employers and repaid by payroll deduction is not new. There have been multiple credit unions offering similar programs to small employers for many years. Employer Choice brings an automated and integrated platform that makes the program scalable to large employers and employees that live in multiple states. There are also several bank-backed fintech solutions in the marketplace that only offer loans, while Employer Choice is designed to help credit unions offer employees a range of financial services, including savings and direct deposit. Program projections on performance and uptake are based on publicly available data from these types of programs and from our rich, personal experience in the space.

Sixty percent of the US workforce lives paycheck to paycheck and does not have $1,000 available to pay for an unexpected expense.  Forty percent of employees will experience an unexpected financial shock this year, like a broken appliance or an unplanned medical deductible.  A third of the US workforce has a credit score under 640 and would be difficult to approve with standard underwriting.  Employers understand this need and are looking for solutions.

We anticipate that ~20% of the employees of a typical employer will open a no-credit check loan every year, with the average loan size likely being ~$2,200 to $2,500.

Credit unions and employer partners/SEGs can be onboarded to payroll data exchange services within several weeks! The platform is designed to be compatible with all payroll systems (UKG, ADP, Paylocity, Peoplesoft, etc). An onboarding kit and task list of requirements will be shared upon engagement.

No, Employer Choice is a completely new offering from the team at CU Student Choice. It was developed in collaboration with 17 leading credit unions, representing $70 billion in combined assets and more than five million members.