Milwaukee News Buzz (Wisconsin)
October 21, 2010
A substantial number of Wisconsin's credit union branches now reside within schools, where they serve as hubs for financial education, encouraging students to save and hiring students as volunteers or paid employees. There are now 109 "youth-operated" branches in the state, making up an impressive 16 percent of all the credit union branches in the state.
About 40 credit unions from around the state sponsor the school branches, providing training and supervision to the students who work at them. The school branches are regulated, just like traditional branches, by the state Department of Financial Institutions. According to state records, the first such branches opened in 1995. The movement, part of a national trend, has picked up steam in Wisconsin in recent years; most of the branches have opened in the past five years.
"This is a great illustration of how great credit unions are. They're more likely to reinvest in the community in a program like this," says Christine Henzig, spokeswoman for the Wisconsin Credit Union League. Credit unions differ from banks, she says, in that they are member-owned, operate as co-ops and are less profit-driven. They are also non-profits and thus tax-exempt.
Deposits in the branches statewide have grown to about $2 million, according to the League, which tallies the total number of student depositors at about 5,600. That an average of $357 dollars per student. Some of the branches even offer small loans to students, although Henzig insists the loans are used to teach the responsible use of debt, not to hand out money to kids.
Our Lady of Good Hope Credit Union, which was formed years ago by the Milwaukee Archdiocese parish of the same name, started one of the state's first student-operated branches in 1996. It's still running today, taking deposits every Thursday from students at the parish's K-8 school. Carol Loehr, whose children graduated from the school, still coordinates the program with help from two eighth grade volunteers.
"Some kids bring in a dollar a week, and some bring in $50. They love it. They're excited. They're saving their money," she says. Like other such offices in the state, Loehr says the branch ultimately answers to the credit union's board of directors. In many ways, it operates just like a regular branch. "They bring in the deposits, have their own passbooks and we give them receipts."
Some of the student-run credit unions offer premium interest rates to their depositors. Milwaukee's A-B Credit Union, which has a branch inside the Wisconsin Conservatory of Lifelong Learning, a year-round K-12 public school in the city, says it offers 2 percent (which is considered high these days) to student investors until they reach age 24. "You want them to learn that their money will grow," says Jeanette Nowakowski, member services manager for the credit union.
And for some, the interest has many years to compound. "We get the really little ones all the way up to the high school kids." The credit union also teaches financial literacy in the school, as do others that run school branches in the state.
Educator's Credit Union, which has offices throughout Southeastern Wisconsin, runs student branches in Hamilton High School in Milwaukee, Bradford High School in Kenosha and Badger High School in Lake Geneva. It's looking into opening another one next year in Milwaukee's South Division High School.
"Our goal in being in the high schools is to promote financial literacy. It's not to get accounts," says Marketing Manager Rebecca Huot. "Our primary goal is to provide financial education and help students to make better financial decisions."
The credit union hires students, mostly seniors, to work at the school branches and at the regular ones on the weekends. Huot says most of the students hang onto the job after graduating.
The state Department of Public Instruction sets no requirements for schools to teach financial literacy but instead offers to schools a set of standards on teaching "personal financial literacy" they can choose to implement.
Henzig says such education is sorely needed, particularly as the country emerges from a mortgage crisis brought on, in part, by irresponsible borrowing and lending. "A lot of young people who don't have this exposure to handling money, their only experience is swiping a piece of plastic," she says.