• The Australian Capital Territory has moved to ban school banking programs, like Commonwealth Bank’s popular Dollarmites scheme, from public classrooms.
• Lawmakers unanimously voted on the legislation, which found those programs are a “key strategic tool” in marketing banking products to children.
• The ACT joins Victoria in its rejection of school banking schemes, which have been criticised by ASIC.
• Visit Business Insider Australia’s homepage for more stories.

Students in the Australian Capital Territory may find more loose change rattling in their schoolbags after lawmakers yesterday moved to ban school banking programs, like Commonwealth Bank’s Dollarmites scheme, from classrooms across the territory.

The ABC reports the ACT Legislative Assembly unanimously voted to transition public schools away from school banking programs by the end of this financial year, joining Victoria in its rejection of the widespread practice.

The Legislative Assembly acknowledged “there is no evidence that school banking programs improve the financial literacy or savings habits of children,” instead calling the programs a “key strategic tool” used to market banking products to children.

The move comes a matter of weeks after the Australian Securities and Investments Commission (ASIC) found school banking programs did not impart adequate financial know-how to students, and primarily served as recruitment tools for major banks.

“School banking program providers fail to effectively disclose that a strategic objective of these programs is customer acquisition,” an ASIC report added.

The report also underlined the fact banks pay schools commission fees for being allowed to operate in the classroom.

It appears the ACT’s decision will primarily impact Commonwealth Bank, whose Dollarmites program is the most widespread and valuable school banking scheme in Australia.

With 175,000 students signed up to the program as of June 30 last year, Dollarmites held a 92% market share in the school banking program sector.

Commonwealth Bank last year said it was “surprised and disappointed” by Victoria’s decision, and as ASIC was finalising its December report, the bank also vowed to “enhance the financial education, measurement and evaluation of its program”.

That does not appear to be enough for the ACT, which yesterday reaffirmed its commitment to “develop a plan to deliver quality financial literacy education in public schools.”

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