State Bank of Fenton, Mich., is getting them when they're still in grade school. The bank recently issued 4,300 debit cards to children at 13 area elementary schools. The students use the card, called Moola Moola Cafe Card, to buy their school lunches. The bank has gotten a lot of new business from adults in the process, since each of the Cafe cards must be linked to a parent's checking account. "It's a good way for us to attract new business, while also fulfilling a community service," said Carolyn M. Spicer, senior vice president of the bank, a subsidiary of $210 million-asset Fentura Corp. Here's how it works: With parental permission, the bank issues a card to a student. Because the students are so young, the school cafeteria cashier has custody of the cards. Each day, students enrolled in the program pay for lunch through an off- line debit of a parent's checking account. Ms. Spicer said the transactions are entered and captured off-line to expedite the process. After the lunch period, cafeteria staff perform settlement from each terminal. The bank provides daily statistical reporting on all cafeteria activity. The program is strictly voluntary, and the schools continue to accept cash for cafeteria meals. The bank is not charging any fees for the service. In exchange for the bank's donation of equipment and payment system services, the schools have taken primary responsibility for promoting Moola Moola Cafe card services to parents. Ms. Spicer said the bank is now considering expanding the service to middle schools and high schools. She said that older students may be allowed to hold on to their own cards. She said the bank had originally proposed a prepaid, stored value card for the Moola Moola Cafe program, but parents resisted the idea of setting funds aside ahead of time. She said that parents swayed bank officials toward making the product a debit card tied to a checking account.

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