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Monday, October 24, 2016

FDIC Sees Strong Results from Youth Savings Program

Banks participating in the FDIC’s youth savings pilot program are seeing strong results, agency chairman Martin Gruenberg said, adding that the FDIC will by year’s end provide a “roadmap” for other banks wishing to offer similar programs in schools.

Twenty-one banks participated in the pilot over the past two years, offering savings accounts to in most cases low- and moderate-income youth through schools or nonprofit partners. In the 2015-16 school year, nearly 4,700 accounts were opened. Bank approaches varied, with some opening in-school branches, some offering visits to nearby branches and others experimenting with mobile banking for youth.

Citing a case where a bank provided a non-custodial youth account for a teen father whose relatives were draining savings meant for child support, and another case where students hired as branch staff at their school became peer financial counselors, Gruenberg said:
Throughout the pilot, we heard a number of stories that demonstrate the significant role that bank programs can play in the lives of the largely low- and moderate-income youth participating in their programs.
“Offering financial education to school-age children opens the door to many opportunities and establishes the groundwork for a lifelong banking relationship,” he added.

Read the speech.

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