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LATHAM, N.Y. – In an effort to promote financial education among school students, the New York State Credit Union League has authored a bill that would allow the state’s 37 state-chartered credit unions to open virtual branches in public elementary and secondary schools throughout the state and help develop curricula geared towards financial literacy. Known as “The Student Financial Education Act,” the bill would modify state banking law which currently allows state-chartered credit unions to open branches in schools within their fields of membership. The new legislation would allow state-chartered credit unions to move into other geographic areas, but with certain limitations. According to Michael A. Lanotte, senior vice president and general counsel at NYSCUL and author of the bill, parents and teachers would not be able to become members of a credit union through the school program. More importantly, upon graduation, student membership with a credit union would be terminated. Asked if the bill would generate competition between credit unions since it would allow institutions to open school branches in locations not within their field of membership, Lanotte responds, “This is not a situation in which credit unions will be competing with one another for membership,” says Lanotte. “This is all to promote financial literacy.” The bill, being sponsored by Assemblyman Ronald C. Tocci (D-New Rochelle) and Senator Stephen M. Saland (R-Poughkeepsie), can give state-chartered credit unions a leg up on their federally chartered counterparts who are restricted to offering similar services and program within their existing fields of membership. Appropriately, the bill has been introduced during National Financial Literacy Month. According to the Jump$tart Coalition for Personal Financial Literacy, financial education is desperately needed. According to a Jump$tart survey, the average score of 4,000 high school seniors who took the organization’s 31-question test about credit cards, taxes, spending and savings was 50.2, well below the passing mark of 70. In New York, “the credit union community is increasingly concerned about consumers’ lack of financial literacy,” says Lanotte. “This bill recognizes the need to educate today’s students so they will possess the financial skills they need in their teen and college years, and go on to become responsible and savvy adults.” He adds that the initiative to educate students on finances is nationwide and that CUNA has been a major supporter. The “virtual” branches would help facilitate and foster the skills necessary to fulfill the New York Education Department’s regulatory requirements in mathematics, English and career development, without the need for additional funding from the state, according to Lanotte. He says, however, that it will be up to individual school districts to decide exactly how financial education curriculum will be taught and how credit unions can participate with in-class schooling. “The school district will determine who will be teaching students, but there are some cases now in which credit unions are going into schools, helping teachers and providing the education themselves,” he says. Credit unions in the state that already operate branches in schools as a tool to teach financial literacy include TEG FCU, Poughkeepsie, with student-run branches in four elementary schools, and Alternatives FCU, Ithaca, with student-run branches in a high school and two middle schools. The bill is in committee review at the present and Lanotte hopes it will be voted on this year. The legislation is a revised version of a similar bill sponsored by Tocci in the past. Saland is on Senate’s Education Committee. -

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