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Learning how to manage money from an in-school bank

Student bankers work at the Lincoln High School bank branch.
Student bankers work at the Lincoln High School bank branch.
Alex Schmidt/KQED

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The first student-run bank branches in Los Angeles have just opened in the Lincoln Heights and Crenshaw neighborhoods. These aren't pretend banks with Monopoly money up for trade -- they're actual, operating branches of the financial giant Union Bank.

A big bank brand in a school may give some pause, but for teens it's a window into the world of finance. For the California Report, reporter Alex Schmidt has more

High school senior Jerry Liu politely helps a peer with her bank deposit. 

"May I please have you swipe this?" he asks as she punches in her pin. 

"How much would you like to deposit?"


Wearing a red Union Bank polo shirt, Liu looks like he could be in any bank branch, with a waiting area and even a decorative plant on the table. But right outside this island of adulthood is a hallway of Lincoln High School. 

This is one of three student-run Union Bank branches in California. The first opened in Fresno a few years ago – and it’s the first one in Los Angeles, with another branch in the Crenshaw neighborhood that opened shortly after. All three branches them are in lower income, immigrant heavy neighborhoods. Only students, faculty and parents can bank there, but the accounts are very real, and so are the bank cards. Liu is one of the 12 student bankers at Lincoln.

"It taught me a lot of new things," he says. "I was really worried about finances before I go off to college, and it opened my eyes to a lot of that new world." 

Union Bank trained Liu to work as a teller, and will give him a stipend and scholarship totaling $1,500. To L.A. Unified School District Board Member Monica Garcia, it seemed like an obvious win-win. 

"I thought the innovation of the student-run bank would be something that fits into our mission of college ready, career prepared graduates," she says.

Many schools across the country are experimenting with student banking, though Union Bank is one of the biggest to enter the field. It's a growing trend, but one that has operated without much oversight. The person who has likely studied the phenomenon more than anyone else is J. Michael Collins, a professor of consumer finance at the University of Wisconsin-Madison. 

"Whenever you have a school system that doesn't have a bank branch, and we suddenly introduce a bank or credit union branch, you have some parents who say, 'Well, why would we allow that particular bank branch. Aren't we granting them a monopoly on these relatively naive, unsophisticated children?" 

Union Bank did not have to compete with other banks to enter LAUSD -- board member Garcia called it a "pilot project," and said that if other banks wanted to enter schools, that LAUSD would release a RFP. Union Bank spent $200,000 on building each branch, and it pays to staff them with managers. Skeptics may wonder about the motivations for a bank to make such an investment. But Collins believes it’s mainly a PR and marketing move, albeit one the school district thinks benefits students. Union Bank claims it’s not entering schools for profit. 

"We don't expect to make money," says Jan Woolsey, head of Community Reinvestment at Union Bank. "Certainly, I think it'll be good for our brand that we're making this kind of investment in young people and communities that need us. But really and truly, our motivation is: ow do we help strengthen communities and make them healthier."

Love banks or hate them, operating outside the financial system is difficult, and even opens up vulnerable groups to predatory lending. A high school bank branch could bring unbanked families into the system. The student bankers love their jobs– they build up their resumes, learn new skills, make money, and a few have even gotten actual jobs with Union Bank. Those who bank there like it too. A Lincoln High Junior waited in line recently to make a deposit. LAUSD policy dictated that her name not be used. 

"This is my first savings account. It's better than a piggy bank because you have to actually think about it to take money out if you want to, and it's easier to save," she says. 

It's relative early days in the history of easy credit and insecure pensions, and American society has not collectively figured out how to cultivate financially savvy consumers in this climate. 

"We are in a bit of a grand experiment with financial literacy in schools. And as I reflect on all the different approaches that are out there, this very simple concept of placing a bank branch in a school setting seems to have a lot of bang for the buck," Collins says. 

As more and more schools try student banking, the Treasury Department is considering a special designation for these branches. Union Bank has plans to expand to more campuses, which could be great for the balances in college savings accounts.