From Young Americans to Entrepreneurial Citizens

By Evan Sparks

Are today’s young people adequately prepared for adulthood? The topic is debated in bestselling books like Sen. Ben Sasse’s The Vanishing American Adult and Meg Jay’s The Defining Decade, played for laughs in movies like Knocked Up and The 40-Year-Old Virgin and tweeted or instagrammed with the ironic hashtag “#adulting.”

One thing is clear—younger Americans are hitting major financial milestones later in life. The share of 20-somethings married and living alone is less than half what it was five decades ago. All of which underscores the continued importance of institutions like Denver’s Young Americans Bank, which was created 30 years ago to help kids get a firm financial footing in life.

In the early 1980s, cable TV pioneer Bill Daniels had a wild hair to open a bank just for kids—a full-fledged, state-chartered, FDIC-insured bank offering deposit products and loans for those 21 and younger. Although the wealthy Daniels promised to fund all of the bank’s inevitable losses, it took three years to convince state and federal regulators to charter the institution.

“My first thought was ‘I don’t see how it will ever make money,’” says Linda Childears, a veteran banker whom Daniels recruited to open Young Americans Bank. “Bill was instantly offended. ‘Do you think I’m trying to make money off of kids?!’” Instead, Daniels wanted to give kids “hands-on” experience with the banking system so that they would be prepared to handle their adult financial responsibilities with maturity—and to contribute to their communities through entrepreneurship.

“When Bill reflected on his business career, he knew his relationship with his banker was extremely important,” says Childears, who currently leads the Daniels Fund, a Denver-based philanthropy set up by Daniels upon his death in 2000 and which provides an ongoing million-dollar subsidy to the bank. “He knew he would not have done as well in business had he not had a banking relationship.”

The bank was a huge hit, attracting 2,000 new accounts in its first month and serving nearly 80,000 customers since 1987. In addition to deposit products—checking and savings accounts, today accessed online or with debit cards—the bank offers credit cards with a $100 limit, personal loans and small business loans. “Every transaction becomes a learning experience,” Childears says. Online banking has allowed the bank to grow its customer base. While 90 percent of customers are in Colorado, the bank serves kids in 46 states and nine foreign countries.

“Bill loved the small business loans,” Childears reflects. Nine-year-old Griff Griffith’s father managed an apartment complex and Griff noticed the revenues that came in from washing machines. So he put together a business plan with Young Americans Bank staff help and got a $350 loan to buy a washing machine. He paid off the loan in eight months, bringing in the quarters from the machine to make his monthly payments. In another case, siblings Evan and Elise MacMillan, ages 15 and 12 respectively, received Young Americans loans to open the Chocolate Farm, a confectionery company that won a Young Entrepreneur Award from EY in 1999.

But Young Americans was not designed solely to teach financial literacy. Daniels often referred to the free enterprise system as “the eighth wonder of the world…and the ninth wonder of the world is so few people understand it.” To help kids understand what undergirds free enterprise, and to learn how banking fits into that, Young Americans Bank’s parent organization also runs Young AmeriTowne, International Towne and YouthBiz, which are coaching and simulation programs that teach young people about participating as citizens, running a town and its businesses, engaging in the international economy and starting businesses.

They “provide a full view of the free enterprise economy” and “get kids to think entrepreneurially,” says Rich Martinez, president and CEO of both Young Americans Bank and the parent organization. “We all, regardless of what we do for a living, have to think entrepreneurially in our jobs.”