Why Financial Literacy is so Important and How Pinnacle Bank Got CRA Credit

 

Take a look at these statistics:

 

 

For some more startling statistics, check out this article. 

 

Clearly, financial literacy is something that we, as a country, need to address and improve. But how do we do that?

 

 

People need to learn about finances when they’re young. The younger you are when you learn something, the better you’ll know that subject in the future and the more equipped you’ll be to practice it. 

 

The problem is that schools are often unable to integrate financial literacy concepts into the curriculum, so students don’t get the financial education they need to be financially literate. This is where financial institutions come in. 

 

Schools can partner with a financial institution to give students a financial literacy activity, program, or event. There are lots of ways for financial institutions to partner with schools and teach students the financial basics; it’s up to each school and financial institution partnership to decide what will be best. 

 

As students go back to school, it’s the perfect time to launch a new financial literacy program or revamp your current program. While April is typically seen as Financial Literacy Month, the truth is that every month should be Financial Literacy Month!

 

When your financial institution focuses on financial literacy, you’ll see lots of benefits. Not only will your community be better educated, but the institution’s reputation will grow and you may even receive credit under the CRA. 

 

 

The Community Reinvestment Act (CRA) is an integral part of community development and financial literacy programs. While many CRA officers and community development managers know that financial literacy is one way to get CRA credit, many don’t know exactly how to do this or what the options are. 

 

Financial literacy programs typically count under the CRA as long as the program primarily benefits low-to-moderate income individuals in the community which the financial institution serves. While this is a pretty basic analysis, it’s a good starting point when determining whether your financial institution’s current or future financial literacy program counts under the CRA. 

 

Without a financial literacy program, your financial institution is missing out on a great opportunity to support and educate your community about finances. And as mentioned earlier, it’s always a good idea to start young and make sure that students understand basic financial concepts before they enter the real world of adulting. 

 

A financial institution that takes this advice to heart is Pinnacle Bank in Nebraska. 

 

Someone who understands how important it is to teach students about financial literacy is Sue Kocsis, the Fair Lending/CRA Officer at Pinnacle Bank. 

 

Pinnacle Bank didn’t have a cohesive way of teaching youth in schools, so Sue decided to take action. She was asked to research Banzai and see if it was a good fit for the bank. She immediately fell in love with the software and their mission to teach students real-world finance through interactive courses. 

 

Sue says that at the beginning, she didn’t know if using Banzai would qualify as a community development activity. But she was determined to advocate for the program and present it to her examiners in a way that made it clear Pinnacle Bank was serving the community in a way that should qualify under the CRA.

 

 

Luckily for Sue, it worked. 

 

During Pinnacle Bank’s last CRA exam, the examiner agreed to count Banzai as a community development service. Pinnacle Bank received credit for the money they invested in the program and the hours bank employees spent with students after they completed the program. Because the students knew the basics, it was easier for bank employees to give a follow-up presentation that addressed other banking and financial topics. While this doesn’t guarantee other examiners will see Banzai the same way, it makes fighting for your own financial institution’s financial literacy program much easier. 

 

Over the last six years, Pinnacle Bank has helped implement Banzai's financial literacy program in over 100 schools. Sue attributes their phenomenal success to the team’s dedication and belief that every child deserves to learn about and practice financial literacy. 

 

According to Sue, “If youth have the right tools and skills in managing their money, they’re going to be much more beneficial to society. Being involved in [teaching] this has been very inspiring, and these students will have a larger impact on society with these financial skills.” 

 

Sue also says to think about the lasting impact these financial education programs have on students. Sure, you can spend a day at a school giving presentations, but will those students retain anything they’ve learned long enough to apply it in the future? Probably not. 

 

Programs like Banzai allow students to practice what your financial institution preaches. Sue has received feedback from dozens of students saying they learned so much about money, budgeting, insurance, and savings. Teachers are thankful for Pinnacle Bank’s support, and students have thanked them for giving them the financial education they need to be successful in the future. If more and more financial institutions take the leap that Pinnacle Bank took back in 2016, we may be able to reverse those worrying statistics.

 

 

If your financial institution doesn’t have a financial literacy program or wants to approach financial literacy differently, it’s time to get started. 

 

Programs like Banzai make it easy to support your community and impact thousands of students a year. And if Banzai isn’t for you, there are plenty of other options. Take the time now to start a financial literacy program in your community. Your community, and your financial institution, will thank you for years to come. 

 

There’s no guarantee that using Banzai or a similar program will give you CRA credit, but if anything can be learned from Sue’s experience, it’s that everything is in the presentation. Sue was able to get CRA credit because of the way she presented the program to her examiners. If you follow her lead and show examiners how important your financial literacy program is and how it truly does serve the LMI community, then maybe your bank can get CRA credit too. 

 

The statistics given at the beginning of this article may be scary, but Sue says that together, we can change these statistics, one school, one child, and one family at a time. 

 

 

To learn how Banzai and Kadince work together to track and mange your financial literacy program, check out this article. 

 

None of Kadince, Inc., its affiliates, or its respective employees, directors, officers, and agents (collectively, “Kadince”) are responsible or liable for any content or information incorporated herein. Read full disclosure.