1. High School Financial Planning Program
Lesson 5-4: Financial Service Providers
©2014 National Endowment for Financial Education |

2. Financial Service Providers
High School Financial Planning Program
Lesson 5-4: Financial Service Providers
Financial Service Providers
Select your own financial service provider
Display this slide as you introduce the lesson and opening task.
Have students brainstorm a list of characteristics they would look for in an ideal friend or life partner. Tell them to focus on personality characteristics rather than just visual traits. For example, they would write “friendly” or “ready with a smile” rather than “dazzling white teeth.” Set a two- or three-minute time limit.
As students brainstorm a list, explain that many people spend a lot of time looking for that perfect person with whom to spend the rest of their lives. We trust that person with our lives. To a lesser degree, we place our trust in a financial institution when we select one to help us manage and grow our finances, but we don’t always put time and effort in choosing one that is the right long-term financial partner. The types of characteristics they may look for in a personal relationship could also apply to their financial relationship.
Now ask students to cross off any traits that would NOT apply to a financial institution. With the whole class, review what is left to create a master list.
Note: This activity should promote initial laughter but as they work on this, students will realize that different financial institutions have different cultures, services, target audiences, etc., and that analyzing these characteristics can help them identify what they think is important in a financial institution. Sample traits: friendly, responsive, local, worldly (becomes “global” for a bank), funny, trustworthy, accomplished, smart, trendy, tech savvy.
Alternate Activity: Have students brainstorm the personal and financial impacts of NOT having a bank account. (accounts not protected by insurance, rent/mortgage application, theft possibility, check cashing fees, potential credit impacts, difficulty paying bills or mailing funds for bill/gift, etc.)
EXTENSION: In teams of two or three, challenge the student to list as many local banks and credit unions as possible in a few minutes.
©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
©2014 National Endowment for Financial Education |

3. High School Financial Planning Program
Lesson 5-4: Financial Service Providers
Preview
Today we will answer these questions:
Where can I cash my paycheck?
What is the difference between a bank, credit union, and check cashing business?
What do I need to know about using banking services?
How do I decide where to do my banking?
Use what you learn today to select a financial service provider.
Transition into the lesson by telling the students that they will learn about the differences and similarities of places where they can carry out their financial business. Preview the Learning Outcomes in the Student Learning Plan. By the end of this lesson, the students should be able to select a financial service provider.
©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
©2014 National Endowment for Financial Education |

4. High School Financial Planning Program
Lesson 5-4: Financial Service Providers
What’s the Difference?
Bank
Credit Union
Check-Cashing Business
Grocery Store
Pawnshop
Student Guide, pages 26-29
Point out that consumers have several options when they need to cash paychecks, pay bills, or store their money. The options displayed in the slide offer similar services in different ways.
Arrange students into teams, and assign each topic to at least one team. Tell the teams that they have 5-10 minutes to learn about their assigned type of business so they can teach their classmates about the financial services the provider offers to consumers. Arrange for each team to assign a recorder to outline the team’s findings and a reporter to report findings to the whole class, with or without visual aids. Keep students on a tight schedule to focus on their work. Suggest that the team members divide duties to locate specific information. (Note: If Internet access isn’t available, consider printing information from a service provider’s websites or at least one other credible resource.)
©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
©2014 National Endowment for Financial Education |

5. High School Financial Planning Program
Lesson 5-4: Financial Service Providers
Teach Your Peers
Describe the financial service business
Share description in one or two sentences
Reference at least one local example
List typical consumer finance services
Explain how consumers use the services
Explain in seconds
Give examples of how teens use services
Student Guide, pages 26-29
Have students work in small groups to use the information in the Student Guide and at least one other trustworthy resource so they can share the following about their assigned service providers:
One- or two-sentence description of the business and reference to at least one specific local example.
List of typical consumer finance services provided by the business.
Thirty- to sixty-second explanation of how consumers use the services, including examples of how teens (or their families) might use the services.
Arrange for each team to report findings to the whole group either with or without visual aids. Debrief by asking students to compare similarities and differences of the providers. Fill in any gaps to ensure the students have accurate information about the services that are provided, whether or not fees are charged for services, and how services are or are not regulated.
©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
©2014 National Endowment for Financial Education |

6. High School Financial Planning Program
Lesson 5-4: Financial Service Providers
Read the Fine Print
Do you think the fees and fee conditions are reasonable?
Be prepared to share your findings with the class.
Student Guide, page 27
Have students work in small groups. Either arrange for Internet access or provide the students with sample disclosure statements and fee schedules from different banks. Review the directions with the students. (This is an opportunity to guide students to use scanning skills to look for specific information in business literature.)
Directions: It is your right to get a copy of your financial institution’s deposit account agreement and disclosure statement which outlines information about terms, fees, and interest rates for accounts offered by the financial institution. Review the sample fee schedule, deposit account agreement, and disclosure statements. Document at least five instances of fees and under what circumstances those fees are charged. Ask the students,
Do you think the fees and fee conditions are reasonable? Be prepared to share your findings with the class.
Point out the value of knowing the fees charged for certain types of accounts and the circumstances under which those fees can be applied. It’s also important to know the different bank policies that can apply when depositing funds or withdrawing funds.
Give students three to five minutes to work independently or in pairs to complete Activity 5.6: What Do They Offer? as they locate and document different fees and the circumstances under which fees are incurred. If time allows, have the students report out on one or two findings. Ask the class to identify fees they can avoid and some strategies they can use to avoid them.
NOTES: Some fees imposed by financial institutions (bounced check fees, ATM fees, etc.) can be avoided whereas other (monthly account fees, check printing fees, etc.) cannot. You may need to discuss the various fees and when it makes sense to pay a fee for the services provided by a financial institution and when it does not.
©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
©2014 National Endowment for Financial Education |

7. High School Financial Planning Program
Lesson 5-4: Financial Service Providers
Payday Loan
Customer leaves post-dated check with lender
Fill out application
Leave a check to cover principal (amount borrowed) and fee
Must be employed and must have bank account
Must be at least 18 years old
Customer receives borrowed amount
Customer decides options by due date:
Instruct lender to deposit post-dated check
Pay cash and reclaim post-dated check
Renew loan
Customer pays fees
High interest
Additional fees for “bounced” check
Student Guide, page 27
Optional: If payday lending is allowed in your state, consider facilitating this learning task to inform students of fees and how payday lending works. As of January 2015, 18 states and the District of Columbia prohibit extremely high-cost payday lending. Source: Consumer Federation of America, PayDay Loan Consumer Information,
In some states, consumers use payday lending businesses to receive cash advances when cash is needed before the next payday. Consumers give the payday lender a post-dated check in return for cash. The amount borrowed is usually expected to be repaid, along with fees and interest, when the next paycheck is received.
©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
©2014 National Endowment for Financial Education |

8. Payday Loan … Good Choice?
High School Financial Planning Program
Lesson 5-4: Financial Service Providers
Payday Loan … Good Choice?
Principal
Time
Interest
APR
Total Owed
$500 (rent)
2 weeks
15%
390%
$575
$300 (car loan)
4 weeks
12%
156%
$336
$1,000 (household and credit card bills)
10%
260%
$1,100
Principal
Time
Interest
APR
Total Owed
$500 (rent)
2 weeks
15%
$300 (car loan)
4 weeks
12%
$1,000 (household and credit card bills)
10%
Student Guide, page 27
Use this slide to illustrate the high costs of payday loans. Note that the interest shown is for a two- or four-week loan period and should be converted to an annual percentage rate before calculating the interest. For the examples, use the simple interest formula. (Note: Calculation notes are provided in the Payday Lending Task document.)
What are other options rather than using payday loans?
©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
©2014 National Endowment for Financial Education |

9. High School Financial Planning Program
Lesson 5-4: Financial Service Providers
Services That Matter
Life Style
Fees and User Requirements
In-person or ATM deposits and withdrawals
Online or mobile banking
Convenient hours
Convenient location
Number of branch locations
Other services (overdraft, automatic savings programs, alerts/reminders, etc.)
Minimum opening deposit
Required monthly balance
Overdraft fees
ATM fees
Penalties and withdrawal limitations
Monthly maintenance fee
Interest rates
Student Guide, page 29
Guide the students to think about convenience factors and user fees when deciding where they will use financial services. Challenge the students to create a mnemonic device that teens or young adults can use as a memory aid when they are deciding where to cash checks, borrow cash, make payments, etc. The mnemonic should include at least five criteria to consider. (Mnemonic suggestions: acronym, limerick, graphic icons, or memorable phrases.)
As time allows, arrange for students to verbally or visually share their mnemonic tools. Point out that these will be useful as they complete the challenge activity.
©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
©2014 National Endowment for Financial Education |

10. High School Financial Planning Program
Lesson 5-4: Financial Service Providers
Challenge
5-B: Which is Best for Me?
Use the DECIDE steps to select a financial institution with services that are right for you.
Student Guide, page 30
Assign the students to independently complete Challenge 5-B: Which is Best for Me?
Review the directions with the students. Tell students to perform this exercise even if they already have an account with a bank or credit union as an exercise to make sure it is the best personal fit. Provide guidance to students as they complete the activity. Encourage the students to include their own criteria for comparison.
You may have students collect information from different financial service providers prior to this activity.
©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
©2014 National Endowment for Financial Education |

11. High School Financial Planning Program
Lesson 5-4: Financial Service Providers
Reflection
Where do you keep your money now and why?
Is it safe?
Is it growing?
Can you track it?
Ask the students to reflect on where they currently keep their money and to analyze the situation based on what they have learned about financial service options.
©2014 National Endowment for Financial Education | Lesson 5-4: Financial Service Providers
©2014 National Endowment for Financial Education |

12. High School Financial Planning Program
Lesson 5-4: Financial Service Providers
©2014 National Endowment for Financial Education |