According to the FDIC’s September 2012 National Survey of Unbanked and Underbanked Households, U.S. households without bank accounts grew by 821,000 from 2009 to 2011, pushing the unbanked population to 8.2 percent of the nation’s total. Approximately half of communities such as East Los Angeles are unbanked or underbanked. These are epidemic numbers that can keep the U.S. from full economic recovery. Without a focus on financial literacy the economy cannot live up to its potential.
A 2010 study (“The Role of Savings and Wealth in Reducing ‘Wilt’ between Expectations and College Attendance“) by Center for Social Development at Washington University at St. Louis found that youth with savings accounts in their names are seven times more likely to attend college that similarly situated youth without savings accounts in their names!
In an effort to encourage promote financial literacy and savings among youth, Pan American Bank rolled out in late 2009 its Youth Savings Account. This account provides local youth with a free savings account that does not require a minimum balance to open. In addition, in an effort to encourage activation, Pan American Bank deposits the first $5 in each account.
Pan American Bank offers the accounts through its financial literacy courses taught at elementary, middle, and high schools. The account is also offered during local school parents’ meetings and at nonprofits and faith-based organizations.
In addition, Pan American Bank maintains leadership programs (Financial Literacy Ambassador Program) at local schools where students are taught over a three-month period to become financial literacy subject matter experts. At the conclusion of the three months the Ambassadors, in teams of two, teach their peers about financial literacy.