Get banks out of schools, urges senator

Get banks out of schools, urges senator

Should schools be allowing bankers into classrooms to poach young children as future customers and credit card holders?

Labor Senator Sam Dastyari is leading an inquiry into Dollarmites-styles savings programs and has written to major banks requesting information on how they collect and manage student data.

"I intend to recommend to the Senate committee that we get banks out of schools or give them a much greater degree of regulation if they are going to be there,” Dastyari told the inquiry.

"I think most parents would be really worried by the idea banks are teaching our children financial literacy."

Dastyari, who is shadow parliamentary secretary for school education and youth, said programs such as the Commonwealth Bank's Dollarmites‚Äč club had begun as "innocent" financial literacy schemes but had opened the door to children being “groomed” as future credit card customers.

The Senate inquiry will recommend legislative prohibitions on the use of data collected through school savings programs and an expanded role for the Australian Securities and Investments Commission (ASIC) in teaching financial literacy.
The number of Commonwealth Bank Youth Saver accounts has grown from 75,000 in 2009 to 273,000 today.
Financial adviser, Scott Pape, told the Senate inquiry that allowing banks to teach financial literacy was "the equivalent of having Ronald McDonald teaching kids about nutrition".

However, a Commonwealth Bank spokesman told The Sydney Morning Herald the company had strict policies on the protection of customer data – including for students.
"We are proud to stand by our record in Australian schools and our commitment to education," the spokesman said.

"As the Committee has heard in the Inquiry, the Commonwealth Bank does not, as a rule, market credit card products to customers until they are 21.

"We have already invited Senator Sam Dastyari and other members of the Committee to attend a Start Smart session to see the benefits of the program first-hand.”

The spokesperson added that of the customers who bank with the CBA under the age of 18, only 25% were in its school banking program.