Wearing a red Union Bank polo shirt, high school senior Jerry Liu politely helps a peer with a bank deposit. With a waiting area and even a decorative plant on the table, this could be any bank branch — but right outside this island of adulthood are the hallways of Lincoln High School in Los Angeles.
This is one of three student-run Union Bank branches in California. They're all located in low-income, immigrant-heavy neighborhoods. You can only bank here if you're a student, teacher or parent, but these are real accounts handling real money.
Liu is one of 12 student bankers at Lincoln High School.
"It taught me a lot of new things," Liu says. "I was really worried about finances [before] I go off to college, and it opened my eyes to a lot of the new world."
As a kid, the closest you probably got to banking was handling colorful bills of Monopoly money. Now, kids are getting a lot closer to the real thing. Hundreds of student-run bank branches and credit unions are open in schools across the U.S. The first branch in Los Angeles opened this spring.
Union Bank trained Liu to work as a teller and will give him a stipend and college scholarship money totaling $1,500.
Mónica García, board member of the Los Angeles Unified School District, was instrumental in bringing the bank here.
"I thought the innovation of the student-run bank would be something that fits into our mission of college-ready, career-prepared graduates," García says.
Many schools across the country are experimenting with student-run banks; Union Bank and Capital One are two of the biggest.
J. Michael Collins, professor of consumer finance at the University of Wisconsin, Madison, says student-run banks have operated without much oversight, which has bred skepticism.
"You have some parents who say, 'Well, why would we allow that particular bank branch?' " Collins says. " 'Aren't we granting them, essentially, a monopoly on these relatively naïve, unsophisticated children?' "
Union Bank didn't have to compete against others to enter Los Angeles schools, for instance. The bank spent $200,000 to build each branch and pays to staff them with managers.
Collins believes banks are mainly in it for public relations and marketing. Union, at least, isn't in it for a financial return, says Jan Woolsey, who heads community reinvestment at the bank.
"We don't expect to make money. Certainly, I think it'll be good for our brand that we're making this kind of investment in young people and in communities that need us," Woolsey says. "But really and truly, our real motivation is: How do we help strengthen communities and make them healthier?"
Woolsey particularly hopes to reach communities in low-income areas, where immigrant or non-English speaking families operate outside the banking system — a difficult position that leaves vulnerable groups open to predatory lending. A school bank branch could help bring families into the system, she says.
As for the student bankers, they love their jobs; they get to build up their resumes, make money — and some have even been hired at Union Bank branches out in the community.
Those who bank at the school branches like it, too. It teaches them to save.
Back at Lincoln High, Liu finishes up a transaction. It wasn't long ago that getting access to credit at his age would've been unheard of. That's an important point, Collins says.
"We are in a bit of a grand experiment on financial literacy in schools," Collins says. "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, to me, seems to have a lot of bang for the buck."
In the meantime, the Office of the Comptroller of the Currency is considering a special designation for school branches, which could pave the way for more.