Sealing a Different Kind of Bank Deal

You see a lot of companies and media personalities tout "partnerships" with each other, but did you ever wonder how much they really vet one other?

Fifth Third Bank and financial advice guru Dave Ramsey, who have teamed up to teach high schoolers to properly manage their money, explained to American Banker how they scrutinized each other before reaching an agreement.

Ramsey — a tough-love radio talk show host who coaches callers on how to escape debt — approached the bank awhile back about working together. At the time, Fifth Third already offered a program for fifth graders and was in the process of testing its own curriculum for high school students.

When deciding whether to associate with Ramsey and his curriculum, Fifth Third had several considerations, including philosophical compatibility and his personal reputation. Before partnering with any celebrity or individual, the bank conducts extensive due diligence, said Mike Schafer, the bank's vice president of brand development. This includes examining the person's background and holding conversations with him or her.

"We don't agree with Dave on everything, and he certainly doesn't agree with us on everything, but we both have a desire to empower consumers to make the right decisions," Schafer said.

More than 450 radio stations across the country carry Ramsey's show, and he draws 4.5 million listeners weekly, his website says. When working with banks and other companies, Ramsey said, his biggest requirement is that they genuinely want to make a difference in their communities. He noted that 89% of high school students say they want to learn how to handle money.

Both sides were ultimately satisfied, and a deal was done.

In 2010, Fifth Third launched its sponsorship of Ramsey's financial literacy program with a pilot targeting low- to moderate-income communities.

The Cincinnati bank this year expanded its sponsorship of the curriculum, Foundations in Personal Finance. The bank is providing the materials, which includes DVDs and workbooks with lessons on saving, debt and money management, to more than 900 high schools and 100,000 students in Ohio, Kentucky, Indiana, Tennessee and Florida.

"I've always been good at making money, but in the early days I was also good at going into debt," Ramsey said in an interview conducted by email. "I wish I had known more about the risk and trouble that debt brings."

Fifth Third thinks the program will give students "a strong grounding" in the fundamentals of personal finance. Schafer said. "We think it will make a meaningful impact on people's lives."

Though Fifth Third's primary motivation is to help people build their financial literacy, Schafer said, it might benefit from the program as well. He noted that financially savvy consumers can make smarter decisions when it comes to their money and the exposure to young people helps build the bank's reputation.

As part of the program, bank representatives will spend time in classrooms.

"We've seen over the past few years many individuals who have made decisions that turned out to not be the right ones," Schafer said. "Having a stronger level of education of how to manage money could have prevented that. In no way does it help the bank to have customers in financial distress."