WASHINGTON (2/25/15)--The National Credit Union Administration, along with the other four federal financial regulators, issued guidance Tuesday designed to encourage all financial institutions to offer youth savings programs.
The guidance contains answers to frequently asked questions regarding young consumers' accounts, as well as compliance information for opening such accounts.
Research from the U.S. Treasury indicates that youth savings programs may be effective in helping improve long-term financial and educational outcomes, such as completing college.
Youth savings programs are often structured as in-school credit union programs offering student basic savings accounts. They may also include more complex, asset-building accounts and school district-wide programs. (See related story: Nat'l CU Foundation, CU CEO present youth savings info to FLEC today.)
These programs are generally linked to personal financial management efforts, and include very low minimum balance requirements on accounts.
The guidance does not create any new regulatory policy or establish new industry expectations. In addition to the NCUA, the guidance also was sent out by the Office of the Comptroller of the Currency, the Federal Reserve Board, and the Federal Deposit Insurance Corp.