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Students run in-school credit unions

By Claes Bell, CFA · Bankrate.com
Wednesday, February 1, 2012
Posted: 3 pm ET

It looks like a high school in Naples, Fla., is taking a really cool approach to teaching job skills and personal finance savvy to students: opening an in-school credit union branch.

From the Naples Daily News:

Math teacher Nancy DeFurio asked Suncoast to start a Naples student branch after seeing something similar in New York. She wanted students to have the opportunity to learn and understand finance.

"The real benefit for them will be when they're adults," she said. "They'll learn you shouldn't spend more than you make."

Already, other Collier schools have told Estevez they're interested in opening their own student branches.

"Most students have no idea what a bank account is or a debit card," Estevez said. He said the financial experience is invaluable for them.

Students and staff can open an account free of charge. There are no transaction fees. Suncoast will automatically deposit $5 into the accounts of the first 50 people who sign up at the Naples High branch.

Senior Rebecca Dutes said that's why she signed up for the credit union.

"I don't want to deal with fees like Bank of America," she said. Rebecca has already made four deposits into her account.

Turns out the Naples High School program isn't unique. The Credit Union National Association lists contact information for 250 credit unions across the country that offer similar programs for schools.

Programs like this are exactly the kind of thing that makes financial reporters love credit unions. Here you've got a way to offer low-risk, low-cost banking services to students while teaching them how to be savvy consumers of financial services later on. And you're getting the students who actually run the branch started on a potential career path in financial services as well. Those benefits set these programs apart from the type of school district marketing deal I wrote about a few weeks ago, which sells banking services to kids and parents through some kind of school district endorsement deal.

As nonprofit, member-owned institutions, I think credit unions probably have an easier time than for-profit banks in selling this type of program to schools and parents. But I'd actually like to see responsible banks get into the act, too, offering similar programs in places the credit unions haven't reached yet.

In fact, as a former high school teacher, I think this is a great template for private/public partnerships for all kinds of different services. Properly supervised, it seems to be a win-win: Companies add young customers and, possibly, profits, and kids get valuable job skills and real-world lessons on the art of being a discerning consumer. In my experience, schools are far too heavy on theoretical instruction and too short on providing opportunities to get real-world experience. Such partnership seem to be a smart way to address that.

What do you think? Are student-run banking services a smart idea? What other industries do you think would partner well with schools to provide these sorts of programs?

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