Following several announcements from the FDIC and Consumer Financial Protection Bureau (CFPB), smart financial institutions will give fresh attention to their financial education efforts.
In late February 2015, the FDIC, along with the other banking and credit union regulatory agencies, issued guidance intended to encourage youth savings programs. Broadly speaking, the guidance lends strong support to the importance of financial education for America’s youth. The guidance’s stated purpose is to “encourage financial institutions to develop and implement programs to expand the financial capability of youth and build opportunities for financial inclusion for more families.” More specifically, the guidance clears up a few nagging compliance questions that may have prevented some retail financial institutions from offering deposit accounts for young savers, including direction on debit cards for minors, identification requirements and more. With the help of the CFPB, regulatory agencies are trying to remove some of the obstacles that institutions and potential customers have faced when trying to open and use deposit accounts for those under 18 years of age.
When National Financial Literacy Month wrapped up in April, the CFPB announced the launch of a nationwide effort to promote financial education in schools. The CFPB has created a resource guide for policymakers to spur “development and implementation of financial education programs” across the country. This tool is meant to support those in leadership positions at the state level to create standards and expectations for financial literacy. The goal is to connect those in the financial community with educators, and to embed financial knowledge and skills in a state’s K-12 education programs.
So are you ready to get started? Here are five ideas to get you thinking about ways to refresh your bank or credit union’s financial education programs.
1. Review Your Account Opening Procedures
Look at the process for opening minor accounts to see if you can remove any of the requirements or restrictions that an overly cautious compliance team might have put in place prior to the new, looser regulatory guidelines.
2. Look at Materials Published by the FDIC, CFPB and Others
In April 2015, regulators launched a new edition of their lesson plans for teachers called Money Smart of Young People. What’s new and exciting in this series, Money Smart for Parents and Caregivers of Children, is the collection of resources to help teach their children about money. These resources include books to read together, conversation starters and real-life teaching moments. Then there is the MoneyAsYouGrow.org website, which provides age-appropriate tidbits of advice and activities for toddlers through young adults. It’s sponsored by the President’s Advisory Council on Financial Capability.
3. Consider Digital Tools for Teaching
Look beyond lecture or worksheet lessons to create innovative ways to teach children good financial skills and habits. Online games from Financial Entertainment and Admongo along with mobile apps like Banker Jr. can provide teachers and parents with tools to create provide “experiential learning programs” that reinforce the lessons.
4. Get Innovative
Develop new accounts or enhance existing deposit accounts to promote and reward smart money behaviors. For example, reward regular savers with a special tour of the bank and lunch with the bank president when they hit savings goals. Offer no-fee checking accounts as a birthday present to long term youth savers when they turn 16 or get their first job.
5. Target New Segments
Leverage your financial literacy efforts to increase your presence in a new market or among a group underrepresented among your clients. Reach out to the children and the parents. For example, create programs to reach children of recent immigrants or for whom English is a second language. Often the children must translate for their parents so by providing these children with an understanding of financial terms and skills, you’ll be helping the parents make sound decisions.
The benefits for forward-thinking financial institutions will be relationships now with the young people in their communities through engaging education and rewarding account relationships. Then as they become mobile young adults, online and mobile banking will keep them loyal to you. And of course, don’t forget that your bank or credit union could receive positive Community Reinvestment Act (CRA) credit for your financial literacy efforts, when you work with low-to-moderate income families.
Kathleen Craig is the President of HT Mobile Apps. Kathleen has been in banking since 2008, most recently the consumer eServices leader at a community bank in Michigan. Kathleen’s specific focus in digital channel strategy gives her insight into the latest mobile banking trends. She founded HT Mobile Apps to push beyond traditional mobile banking platforms to find fun, innovative ways for community banks to tap into the app experience. You can follow her on Twitter at @KCraig115.