SAFE is a state-chartered institution and adheres to California Department of Financial Institutions regulations, Hersek said. It opens minor accounts at two high school branches, requiring 14- and 15-year-olds to obtain parental consent before opening savings accounts but giving more freedom to upper classmen, allowing them to open savings or checking accounts without any involvement from parents. The credit union has been audited by DFI examiners several times since launching the teen initiative, and the state regulator has never taken issue with it.

DFI financial code section 14853 covers minor accounts, and states: "A credit union may issue shares or certificates for funds to a minor of any age or maintain any other account authorized for credit union members for a minor, and receive payments thereon by or for the minor. The minor is entitled to withdraw, transfer, or pledge any shares or certificates or other moneys owned by him or her and to receive from the credit union all dividends, interest, or other money due thereon in the same manner and subject to the same conditions as an adult. The receipt or acquittance of a minor constitutes a valid release and discharge of the credit union for the payment of dividends, interest, or other money due to the minor."

The Federal Credit Union Act provides little clarification on the subject of minor share drafts, simply stating in section 1765 that "shares may be issued in the name of a minor or in trust, subject to such conditions as may be prescribed by the bylaws."

NCUA's Federal Credit Union Bylaws add little, stating much the same but adding that credit unions are subject to state laws.

Hersek said that SAFE follows all other state and federal laws pertaining to minor accounts, including those that prohibit the marketing of loan products to minors and require institutions to waive maintenance fees. SAFE also follows Patriot Act regulations that require proper identification.

"When we started this program, we looked at specific age groups and what they're actually in need of during those time periods," Hersek said. "Sixteen- and 17-year-olds are starting jobs, so obviously we need to look at checking accounts for them."

The vice president said one drawback to offering checking accounts to teens is that the institution is unable to enter into a legally binding contract with minors. As a result, loss recovery would be a challenge.

"We've had a lot of conversations lately regarding why we do these accounts, because you take on a business risk," Hersek said. "But I have to tell you, of all the years we've done this, we've never incurred a loss, which I think says a lot about how seriously our students take it. It's the opposite of what this parent thought would be happening."

Hersek said high school branches aren't money makers, but SAFE is willing to take on the expense in the interest of financial education.

"There's a misconception about how much financial literacy people provide their kids, probably much less than they think," he said. "It's important for kids to have some control over their finances but also to have parent there to support them and encourage a savings goal–it's really a unique family opportunity."

Hersek said as far as he's concerned, the family matter is ancient history and said he was encouraged by the abundance of positive comments from Sacramento Bee readers on the paper's Web site.

"I was concerned we would get unworthy press because of the situation, but seems to have not been that way at all."

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