Putting teenagers in charge of a bank branch may not be every banker’s idea of safety and soundness, but one bank in Chicago plans to give it a try.
The $269 million-asset Park Federal Savings Bank plans to open a branch in early January inside Curie Metro High School, on the city’s South Side. It will be run by students and cater to students and their parents, said Paul J. Lopez, Park Federal’s chief credit officer.
The Park Federal branch is modeled after one that Milwaukee’s Mitchell Bank opened four years ago in a high school. That branch has brought in deposits of about $850,000 and loans of more than $300,000, said Mitchell’s chairman, James Maloney.
Mr. Maloney said the school asked Mitchell to open a branch in its building during a series of community meetings the $80 million-asset bank held to find ways to serve its market’s growing Latino population. He said students who work at the school branch serve as ambassadors to the community and have succeeded in bringing in customers — often their own parents — who previously did not have bank accounts.
“I estimate that our traffic at our main bank, which is two and a half blocks from the high school, has quadrupled” since the school branch opened, Mr. Maloney said.
The idea was brought to Chicago by the Sargent Shriver National Center on Poverty Law. A potential donor approached the center about contributing money for financial literacy programs
Dory Rand, Shriver’s supervising attorney for community investment, said the center had heard about the Mitchell branch and thought it could be replicated in Chicago. She set out to find a school and a bank that would agree to open an in-school branch, and the donor gave the center $100,000 on Dec. 15 of last year to get the project going.
Curie Metro was chosen because it has a large Latino population and because it hosts a program called Education to Careers in which students work part-time and are in classes part-time. Ten students in the accounting program were selected to participate, and they currently work at Park Federal’s two regular branches. The students and members of the school faculty recently visited Mitchell Bank’s in-school branch to see how it operates.
Park Federal was chosen because it is near the school, has a strong commitment to community development, and Mr. Lopez has taught financial literacy classes to police officers and at churches.
Mr. Lopez said he expects the student-run branch to be primarily a deposit generator, but the bank will send a member of its loan department to the school if the students need someone to make loans. There will also be a full-time staff member from Park Federal at the Curie Metro branch.
Construction of the branch will be done during the school’s Christmas break and is projected to cost $73,000, Ms. Rand said. Part of those costs will be covered by the donation to the Shriver center, and the rest will be covered by Park Federal.
The school branch will not be open to the public, but anyone who has other business at the school will be able to use it. It will also have an automated teller machine.
Jerryelyn Jones, Curie Metro’s principal, said the branch will be a good addition because it will let the students running it learn about operating a business and give the other students a chance to practice financial literacy skills learned in the classroom. She said she did not expect security to be a big issue, but would request additional assistance from the school system’s own security force.
