Wednesday, April 9, 2008

Parent-teen power struggle over money in school branch

SACRAMENTO (4/8/08)--SAFE CU, Sacramento, has never received any complaints about its in-school credit union branches. In fact, its program is lauded by the city and state.

But the mother of one young SAFE CU member isn't happy--because the credit union opened an account for her that her mother doesn't have access to.

The mother contacted local media with a list of questions regarding her concerns about the credit union's school program.

"It's very unusual," Paul Hersek, SAFE CU vice president of marketing, told News Now. "It's not the norm. We've never had something like this happen."

The young woman, a minor, opened an account at a SAFE in-school branch to save money she earned at an after-school job. The member is "really responsible," and declined an ATM card so she wouldn't overspend, Hersek added.

The member has a joint account with her mother, but wanted her own savings account. "The daughter wants to be independent," Hersek said.

SAFE CU contacted the mother about her concerns, but she had bypassed the credit union and spoken to the media, Hersek said.

Credit unions can open accounts for minors, according to the California Department of Financial Institutions. The code reads: "A credit union may issue shares or certificates for funds to a minor of any age or maintain any other account authorized for credit union members for a minor, and receive payments thereon by or for the minor.

"The minor is entitled to withdraw, transfer, or pledge any shares or certificates or other moneys owned by him or her and to receive from the credit union all dividends, interest, or other money due thereon in the same manner and subject to the same conditions as an adult."
"We're not doing anything wrong," Hersek said, adding the state, governor and Sacramento region have applauded SAFE's program. "I don't see us changing anything."

SAFE started its in-school branch program in 2003. "We've had great results," Hersek said. Students who have a B average or above can work in the branches and also can compete for internships at the credit union's corporate office. They learn marketing and accounting, and the credit union provides money to the school district for financial literacy programs.

The credit union doesn't aim to make a profit off of its school programs--rather, it seeks to improve its exposure among teachers, parents and students.

Six student employees also have taken jobs at the credit union after graduation. "It's a really rewarding program," Hersek said.

Though the mother's complaint was a first for SAFE CU, credit unions should listen to parents' concerns in these situations, Hersek advised.

He also advised credit unions to look at the products and services offered to youth and ensure they are applicable. SAFE has customized some products and services to suit youth. For instance, students can open accounts labeled by what they are saving for, such as prom or a yearbook, and deposit money in each.

SAFE also waives maintenance fees until members are 21 years old. "It's those types of things," he said. "Does the program make sense for those individuals?"

Financial institutions can offer financial direction for youth, he added. Though it's up to the parent to talk to children about financial education, a lot of children don't get financial training at home. The credit union takes advantage of "any opportunity" it can to reach out and help students, Hersek said.

courtesy of

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