A recent proposal by the Federal Deposit Insurance
Corporation (FDIC) would allow many smaller state banks to participate or
assist in financial education programs conducted on school premises, including
the receipt of deposits, payment of checks, or lending of money.
Currently, to participate in these types of programs, FDIC-regulated banks are required to submit a lengthy and complicated branch proposal. By waiving this requirement, a significant regulatory hurdle would be removed and local financial institutions could begin providing direct financial services as part of a financial literacy curriculum.
By some estimates, nearly 18 million of the 40 million households currently unbanked or underbanked have young people present. When banks can provide basic financial services through schools, it presents a meaningful opportunity to offer financial literacy training at a young age. This will help prepare young people for critical financial decisions, such as a rental agreement, mortgage application, or student loan. It would also offer participating financial institutions the opportunity to identify new customers before credit or previous account problems make account ownership difficult or unlikely.