MADISON, Wis. – In what was being billed at press time as the "world's only independent credit union – just for kids," STAR (Save to Achieve Results) Credit Union was gearing up for its grand opening on June 1. Not just another student branch, this credit union has its own charter where only children can be members and is open to all members of the Boys & Girls Club of Dane County. A credit union just for kids is the brainchild of Kim Sponem, CEO and president of CUNA Credit Union who collaborated with Andy Faust, CEO and president of Summit Credit Union. Sponem is a member of the Boys & Girls Club of Dane County board of directors and determined the credit union could have a positive impact. "You know we spent years trying to reach out to folks who've had trouble with credit and finances and it seemed to me we were hitting folks too late. Kids need a traditional finance experience early on in life," said Sponem. "We could've just put a branch in the Boys and Girls Club but the challenge is that eventually that little satellite office may not get the attention it needs and doing it this way makes it much more community based and more of a grassroots effort where kids can take real ownership." Diane Halvorson, executive vice president at Summit CU serves as board chairperson and other board members in addition to Sponem and Faust, include CUNA Credit Union Operations Support Manager Diane Czerwonka and Tracy Pederson, development director of the Boys & Girls Club. "Credit unions take financial education very seriously. This is an opportunity to provide kids with a hands-on experience where they learn how to save money and also run a business," Halvorson said. "STAR Credit Union members will sign up for committees, similar to how traditional credit unions operate." According to Sponem, by law the board of directors must be of age but kids make up both the finance and marketing committees. So far they have developed the credit union logo with a Summit CU graphic designer and helped design the branch's donated 10 x 10 space in the Boys and Girls Club Center, which will feature a wall mural depicting the flow of money and how it works. Located in an area of Madison that is surrounded by rent-to-own stores, payday lenders and title-for-cash shops the Center made an ideal spot for the kids credit union, says Sponem. Jessica Wilson, who has worked in financial institutions for eight years, has been hired as STAR CU president and manager. Plans are underway for her to teach members the benefits of saving money and increasing their financial literacy through interactive, fun games like a "Teenage Millionaires Club" where kids "invest" in the stock market with play money; while encouraging children to open accounts. Sponem says about 40% of Wilson's time will be spent exclusively on education and the remaining 60% of her time will include educational elements. For now the credit union will only offer savings accounts with an annual percentage rate of 5%. STAR CU has set a goal of l00 children opening savings accounts by year-end, with members adding to their accounts once a month or more. So far about 20 kids have already deposited the $1 minimum to open an account. Since the credit union pays 5% there is a $200 maximum cap on savings accounts. As members turn 16 both credit unions will start encouraging STAR CU members to join one of the credit unions for more complex services from car loans to student loans. Members can keep their STAR CU savings account open. "The idea here is two separate goals- one is to introduce kids to and teach about traditional financial services, the importance of saving and how to manage money; and the second part is to help kids learn how to run a business and gain valuable experience in a business setting so that when they are 16-17 years old they have something to put on their resum'e or college application," said Sponem. "We also wanted to make sure that the credit union's future success doesn't rest on just one credit union so the partnering ensures future success and support." In addition to donating time and energy over the past two years to get the kids credit union off the ground, CUNA Credit Union and Summit Credit Union will cover all operating costs-an estimated $40,000 annually. In addition, CUNA Mutual Group Foundation and the Wisconsin Credit Union League Community Investment Fund have contributed $5,000 in start-up capital. Harland is providing software. Grand opening festivities will include a speech from eight-year old Tyler Smith, who was one of the first STAR CU members. Some 25 Boys and Girls Club members will also be on hand to celebrate the new credit union. [email protected]

Continue Reading for Free

Register and gain access to:

  • Breaking credit union news and analysis, on-site and via our newsletters and custom alerts.
  • Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders.
  • Educational webcasts, white papers, and ebooks from industry thought leaders.
  • Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, and

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.