Capitol City Bank & Trust's school program creates concern

Some board members say they worry about district's liability

Capitol City Bank & Trust Co. got permission from the Richmond County Board of Education on Tuesday to implement its banking program in at least three more schools next year, but not all school board members were comfortable with the move.


The bank has been working with seven Augusta schools since last fall to teach money management, bank protocol and financial literacy, according to Margaret Westbrook Ellis, Capitol City’s assistant vice president.

When Ellis asked to expand to more classrooms, though, the request drew attention to a practice that has been used for a year: In order to open bank accounts for the schools to be used by students, the bank uses the school district’s federal identification number.

The board voted 6-4 to expand Capitol City Bank’s school banking program, with members Helen Minchew, Jack Padgett, Jimmy Atkins and President Alex Howard in dissent.

The board members worried about the liability involved in using the district’s ID number for money that doesn’t belong to the school system.

“We’re crossing a line if they’re using our federal tax ID number,” said board member Frank Dolan, who ultimately voted to approve the expansion. “I don’t know all the ramifications, but I know the laws are a lot tougher than it used to be.”

Board attorney Pete Fletcher said after researching the issue that it didn’t appear the school district would have much liability for the accounts because of the small amount of money involved.

Some students deposit as little as 25 cents, Ellis later said, although she could not provide the total amount invested by students.

School system Controller Gene Spires echoed Fletcher’s opinion, saying that the idea is to teach banking skills, not to accumulate a large sum of money.

“I really don’t think this is a real big thing, simply because there’s not a lot of money involved,” Spires said Wednesday.

Howard said he supports the program but is against allowing students to use the district’s tax ID number.

Howard is also concerned that Capitol City establishes one bank account for each of the seven schools, which all the students in the school share, rather than an account for each student.

“It’s commingling funds, and that’s a recipe for disaster,” Howard said.

Georgia Bank &Trust has a similar in-school banking program for elementary students, but the bank does not use the district’s tax ID. Instead, it uses each student’s Social Security number and gets parental permission to set up accounts, according to Zack Daffin, Georgia Bank & Trust’s vice president and business development officer.

The bank has worked with Richmond County schools since 2006 and will open accounts for students next year at Barton Chapel and Wheeless Road elementary schools.

Ellis said her bank’s program does not pose a danger but instead teaches valuable life skills at an early age. In the monthly sessions, students act as tellers, security guards, customers and agents to learn the workings of a banking system.

“The point is to circumvent the so many students who leave high school being financially illiterate,” Ellis said. “This will give them life skills.”

Despite the obvious benefits, Dolan left the board with a warning Tuesday: “Somebody’s going to get in trouble over this.”