In its white paper on financial education released in April, the Consumer Financial Protection Bureau pointed to in-school branches as a way to build students’ financial literacy through hands-on learning. With experiential learning, “students may be more likely to retain financial knowledge when they apply the concepts,” the bureau said in the report.
The CFPB pointed to an educational benefit both for students banking at school as well as for those running the school branch. These programs “provide children and youth with classroom-based financial education, the opportunity to open deposit accounts on the school premises, and the ability to make regular small deposits. Many programs also give students the opportunity to manage the school bank or credit union branches as student bankers or junior tellers,” the bureau said.
The CFPB gave two examples of banks that have branches in schools. Capital One Bank has student-run branches in Newark, New Jersey, as well as in the Bronx and Harlem in New York City. The in-school branch offers a limited menu of products designed primarily for student savers. The school branch is managed by high school seniors who also teach fellow students the importance of money management skills.
Delaware also has a bank-at-school program in which schools are matched with a local bank. As of 2012, the state had more than 70 bank-at-school sites with more than 4,000 depositors.
The CFPB said that because many programs are created at the local or regional level, it is unclear how many bank-at-school programs are in operation.
NorthWestern Financial Review magazine recently wrote about a branch at Ladysmith High School in Ladysmith, Wis., which gives students more do over lunch hour than eat tater-tots. The school’s cafeteria is home to Jacks and Jills Savings Bank, a branch of Ladysmith Federal Savings and Loan Association.
A consumer loan officer at the bank and the school’s business teacher came up with the idea. The banker, Sara Baker, urged the school board to build a place for a bank branch in the school’s cafeteria. Ladysmith Federal paid for a security system, a used safe, a laptop and a secure connection to the bank’s systems. Equipped with branded marketing materials and deposit slips, the students named the branch Jacks and Jills Savings Bank, after the school’s mascot.
The bank’s first two student tellers began work about a year ago. The students operate the branch, cashing checks and transferring funds between accounts, every Wednesday over lunch periods. The branch averages four transactions a week.