600 Kindergartners Were Given Bank Accounts. Here’s What They Learned. - WSJ

[Gunnar Larson]

https://www.wsj.com/articles/college-savings-fund-san-francisco-85d32bf5

This is very cool.


Since 2011, the City of San Francisco has automatically opened bank
accounts on behalf of kindergarten students, depositing $50 in each one and
providing a variety of mechanisms to help students and their families save
more. The purpose of the accounts is to help students save for college,
and, so far, the program has been an unqualified success. The program has
52,000 active accounts with a total balance of $15 million—$10 million of
which came from deposits made by the students and their families.



A few fintech nerd notes:

The program couldn’t partner with California’s established 529 College
Savings plan because the city wanted its program to be opt-out by default,
more convenient for families to contribute to, and accessible to all
families, including those who are undocumented (which presents KYC
challenges).

Instead, the City designed a custom bank account product structure with
Citibank, which mimics some of the structural components of a 529 plan
(e.g. the funds can only be used for qualified educational expenses) but is
built on top of a FBO account/sub-account structure (with the City of San
Francisco being the master account holder).

Not that it probably matters to Citibank all that much, but I’d imagine
that $15 million is a wonderfully sticky source of deposits. Perhaps
regional banks should work with cities and states in their own backyards on
similar programs?
-------------- next part --------------
A non-text attachment was scrubbed...
Name: not available
Type: text/html
Size: 1993 bytes
Desc: not available
URL: <https://lists.cpunks.org/pipermail/cypherpunks/attachments/20230731/1abb6bce/attachment.txt>