I would like to use this week's column to commend several institutions within the credit union industry that are reaching out to students by giving them the opportunity to understand the basics of financial services transactions.
Family First Federal Credit Union has recently teamed with the Bishop Kearney High School in Irondequoit, N.Y. The Purdue Employees Federal Credit Union has a similar new program under way at Harrison High School in West Lafayette, Ind. So does Vyster Credit Union, which has a branch at the Fleming Island High School in Orange Park, Fla. The Finance Center Federal Credit Union has branches in two Indianapolis high schools.
Each branch is different in regard to the products and services being offered, although they all cover the basics of savings and checking accounts. The Bishop Kearney High School branch is a bit ambitious in offering loans to students who are 18 or older.
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Of course, none of these credit unions is involved in residential real estate lending within their school settings. Yet their presence in schools should (in concept, at least) help lay the foundation for the basic tenets of financial planning.
Students who have checkbooks will have to learn how to make sure their balances add up. Those with savings accounts can get an early lesson on the value of putting money away from that proverbial rainy day – or that big purchase that might otherwise be absorbed into the tar pit called credit card debt.
I would like to think these credit unions instill valuable lessons in today's high school students – not only in their daily activities, but in the not-so-distant future when they have matured and are ready to become homeowners. You can never have too early of a head start in teaching the basics of financial literacy and fiscal responsibility.
I should put a special emphasis on the word ‘responsibility’ – that's something you don't hear too much nowadays, especially from both the borrowers and the lenders at the heart of the current crisis. Too many borrowers prefer to play the victim and insist they were either duped into signing toxic mortgages or that they were the target of so-called predatory lending. And too many lenders bemoan that they were bamboozled by borrowers with a rich talent for mortgage fraud.
Strangely, you don't hear too many borrowers acknowledging they went in over their heads by signing for mortgages without bothering to understand what the transaction entailed. And I can't recall any lenders openly admitting there was a total due diligence and risk management breakdown in their operations that enabled so much fraud to sneak by without detection.
While we're talking about not taking responsibility, let's not forget Washington, D.C., is overstuffed with elected officials, regulators and bureaucrats who were asleep at the wheel while today's crisis metastasized. No one in the White House, the Congress, the Federal Reserve Bank or any Washington agency has been willing to step forward and admit they weren't paying attention.
Today's high school students will be the borrowers and lenders of tomorrow (and the Washington power elite, too). Here's hoping their in-school credit unions will teach them lessons that their elders either never bothered to learn or conveniently chose to forget.
– Phil Hall, editor, Secondary Marketing Executive.
(Please address all comments regarding this opinion column to hallp@sme-online.com.)
