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The purpose of this bulletin is to set forth the Division of Banks’ (Division) minimum requirements for the establishment and operation of activities conducted under the Massachusetts Student Bank programs. There are four available options for school bank programs: (1) A School Branch; (2) An Educational Training Program; (3) A Student Bank; and (4) A School Savings Deposit Program. The requirements for each program are outlined below. Participation in any of these programs by an educational facility or other organization dedicated to the training of youth1 requires the approval of the appropriate educational authority and/or governing Board. With the exception of a School Savings Deposit Program, all applicants for a school bank program must demonstrate that a clearly articulated and defined educational and/or vocational objective will be served by the establishment of the program.
The following definitions apply to the terms used in this bulletin unless the context otherwise requires:
Division: The Division of Banks, including the Commissioner of Banks
Educational Authority: The local school committee or governmental body which governs the affairs of a public educational facility. The term shall also include the Board of Trustees or similar governing body of a private educational institution or youth organization.
Educational Facility: A public or private primary, secondary, or vocational school located within the Commonwealth.
Educational Training Program: An association by a group of students and teachers under the sponsorship of a bank to train young people in the basic principles and practices of banking which is established under G.L. c. 167, s. 37B and these guidelines.
Financial Institution: A state-chartered savings bank, co-operative bank, trust company, or credit union.
School Branch: A limited purpose branch office located at a secondary or vocational school located within the commonwealth which is established under G.L. c. 167C, s. 3 or G.L. c. 171, s. 8 and these guidelines.
School Savings Deposit Program: An arrangement between a financial institution and an educational facility which is established under G.L. c. 167D, s. 10 for the collection and deposit of school children's savings.
Student Bank: A school bank operated by students in grades four through eight which is established under G.L. c. 167, s. 37B.
A financial institution seeking to establish a branch office at an educational facility must give written notice to the Division. Such notice shall contain: a written notification that the deposits of such branch are insured by a federal deposit insurance agency; the prior written approval or vote of the appropriate educational authority; an executed written agreement relative to the operation of the school branch office between the financial institution and the educational authority which meets the requirements of section 2, a written curriculum plan developed with and approved by the educational authority which meets the requirements of section 3; and, such other information as the Division may require from time to time.
A formal written agreement must be entered into between the educational authority and the financial institution governing the operation of the school branch. Such agreements must be reviewed and renewed annually.
All agreements shall contain provisions relative to the following matters:
Agreements relative to school branches may contain the following optional provisions:
A school branch is an educational facility to be used for the training of students, on school premises, in the basic principles and practices of banking by actual participation in a branch operation. A curriculum plan, therefore, should be designed that achieves these objectives in accordance with acceptable educational standards. All such curriculum plans must be drafted and approved by the educational authority prior to the submission of a school branch application.
All Educational Training Programs must meet the following conditions and restrictions:
A financial institution may establish student savings deposit programs in compliance with applicable laws and requirements of the particular school or school system. The approval of the Division is not required.
Option 1 - Procedures for the Establishment of Branch Offices Located at Educational Facilities
All school branch applications shall be reviewed under the same supervisory standards and procedures accorded to ordinary branch applications. Applications for school branch offices shall be eligible for the Notice Process (if applicable) as outlined in Regulatory Bulletin 2.1-104. However, all school branch applications eligible for the Notice Process must also fulfill the requirements of this bulletin. All school branches are subject to state and federal statutory requirements governing state-chartered financial institutions including the posting of all consumer protection and other notices required by law.
Option 2 - Application Guidelines to Approve the Establishment and Operation of Educational Training Programs
Option 3 - Student Savings Deposit Programs
This bulletin replaces former Administrative Bulletin 23-1 which was restated in 1992, and former Administrative Bulletin 23-2 issued on October 17, 1988. Changes made to this reissued bulletin were made due to changes made by chapter 461 of the Acts of 2004. The bulletin was revised on October 2, 2012.
G.L. c. 167, s. 37B;G.L. c. 167C, s. 3;G.L. c. 171, s.8.