A Melton school has put its school banking on hold amid growing concern about the banking sector’s conduct.
Coburn Primary School council made the call, effective this term, to stop processing deposits by children into their Commonwealth Bank accounts.
The school council said it would not process or support the CBA program, which is being reviewed by the Australian Securities and Investments Commission.
“The Commonwealth Bank is currently under investigation in relation to elements of this program and the management of it,” the principal Vicki Minton told families in the school newsletter.
She said once the investigations were complete the school would review the decision.
The Australian Education Union and Choice welcomed the school’s decision.
CBA Dollarmites, which is under attack from a number of quarters, is a marketing dream for the big bank, signing up young bankers as early as five. Many of them continue banking with it into their adulthood.
ASIC, the corporate regulator, is reviewing school banking programs.
CBA has more than 300,000 student bankers in 4000 schools around the country.
Many parents sign up, seeing the routine of weekly deposits, as a way to teach their children about saving but critics say it snares the young savers as customers for life. Kids also get rewards for every 10 deposits they make.
Schools receive $200 when they sign up, $100 to $600 annual contribution based on number of students and $5 for every 10 school banking depots processes per student.
AEU Victorian president Meredith Peace said while the teacher’s union supported financial literacy, involvement by big banks was not appropriate.
She said historically school banking was offered by government owned banks but they were no longer in public hands. CBA school banking started in 1931.
She said there was evidence that children who signed up for school banking stayed with the bank for many years, meaning that they were not given a choice.
The union also has raised concern about kickbacks to schools.
Choice spokeswoman Erin Turner praised the school’s decision, saying that financial literacy should not be delivered by banks.
“We would not have McDonalds teaching nutrition at our schools and we should not have a bank teaching financial literacy,” she said.
A CBA spokeswoman said participation in the program was voluntary for schools, students and parents.
“The program is designed to educate students about the importance of saving money on a regular basis,” she said.
“We welcome the announcement by ASIC to review school banking programs in primary schools.”