The bank that’s just for kids

President and CEO Richard Martinez Jr. shares how Young Americans Bank is empowering young people to live the American dream.

By Andrea Lahouze

In Denver, Young Americans Bank has a curious differentiating factor: It is the only bank in the world that exclusively serves customers ages 21 and younger.

It all began in the mind of Bill Daniels, a Colorado native who first made his name as a pioneer in cable television. In 1984, Daniels read a story about a group of Denver students who could not obtain a bank loan. Upset that society was not allowing young people to participate in the financial system, Daniels decided to do something about it. His answer: a bank just for young people that would also teach financial education.

“Bill’s belief was that the bank was the center of our free enterprise system, so if you didn’t know how to navigate a bank, how are you going to realize the American dream?” says Richard Martinez Jr., president and CEO of Young Americans Bank since 2007. “Bill really felt that kids needed their own space to be able to learn without adults being there.”

Martinez’s passion for instilling financial smarts in younger generations stems from his own Colorado upbringing, watching his parents live on a cash-only basis.

“My father was a steel worker, my mother was a stay-at-home mom, and money was always a mystery to me,” he says. “I still remember days where we’d go around and pay bills after my dad got paid because they didn’t have a checking account.”

Martinez was determined to learn everything he could about money and the U.S. banking system. He graduated from Colorado State University with a degree in finance and worked as a bank examiner for the Federal Reserve before arriving at Young Americans Bank as a vice president in 1999. He’s been dedicated to carrying Daniels’ mission forward ever since.

The $20 million-asset bank has almost every service and product of a typical community bank, each stripped down to be as simple as possible for young customers who are learning how a bank works. Credit cards begin with a credit line of $100. Loan underwriting requirements are less stringent than elsewhere, thanks to organizations that place deposits with the bank so it can offer cash-secure loans. Often, these loans fund things like school computers and uniforms for school athletic teams.

“It’s a wonderful lesson in how lending really works and how valuable lending is,” Martinez says. “We all can’t save up money and pay cash for everything.”

The bank’s loan program has also helped many young entrepreneurs start their businesses. Martinez recalls one 10-year-old who used a loan to buy a commercial washer and dryer and start his own business, Soapy Ducks Laundry, in his family’s owned apartment complex.

“His dad charged him for rent and water,” Martinez says. “Every month, he’d come in with a bag of quarters to pay his loan payment and a bag of quarters to put into a savings account. He paid off the loan with no late payments. He wanted to get a second washer and dryer and put it in the apartments, but I could not talk him into another loan. He had saved enough money that he was able to buy it outright.”

Sharing cash savvy—Young Americans Bank president and CEO Richard Martinez Jr. chats with a bank customer and teller.

In keeping with its financial education focus, Young Americans Bank seeks out employees with career experience in working with children. “We believe we can train someone to be a teller, but we can’t train them to understand how to communicate with children, so they might have been summer camp counselors, nannies or swim instructors,” Martinez says.

The bank operates alongside its companion nonprofit, Young Americans Center for Financial Education, a community-funded 501(c)(3). Three of its financial literacy programs are fixtures in many school curriculums in Colorado, as well as in some neighboring states.

In the Young AmeriTowne program, fifth-grade students learn about free enterprise through a series of classroom lessons and then come to one of the three Young Americans Center for Financial Education locations for the big event: running a fictional town for a day. There, they assume the roles of producers and consumers, complete with managers, accountants and workers. The program reaches 47 percent of Colorado fifth graders, and students are tested before and after to gauge how much they’ve learned. For many, Martinez says, it makes a lasting impression.

“Experiential education is very, very powerful,” Martinez says. “Those lessons go deep. I was actually at a breakfast this morning for an educational program, and somebody grabbed me and said, ‘I went to Young AmeriTowne.’ They were 33 years old and they could tell me exactly what their job was and how their business did.”

For middle schoolers, International Towne teaches global economics in a similarly immersive activity. Students become citizens of 16 countries broken into four fictitious regions and travel the world by passport, exchanging currencies and learning how each country trades and specializes in different goods and services.

For high schoolers, YouthBiz assists young entrepreneurs with one-on-one mentoring and monthly talks on topics like accounting, branding and, for students with food-based businesses, food regulations.

One curriculum adaptation of the program asks students to assemble a business team and prototype an idea, then participate in a business pitch competition akin to ABC reality show Shark Tank.

Young Americans Bank Denver, Colo.
Assets: $20 million
Retail locations: Two
Employees: 15
Founded: 1987

Growing a legacy
For Martinez, the reward is in the work. “Every day, [I love] coming to work and being able to know that we’re helping kids become better consumers, better citizens, to be able to prosper in our free enterprise system, and really to live the American dream. I feel like I am living the American dream of being a low-income student, going to college and ending up in a professional career where I am heading up such an incredible organization. It’s just plain fun.”

Part of that work is helping customers graduate from Young Americans Bank. Before customers turn 22, they receive a “senior citizen letter” and talk with bank staff to select another local financial institution that will best fit their needs. “We provide the Denver metro area with incredible bank customers who are very knowledgeable in bank products,” Martinez says.

At the end of the day, those highly knowledgeable bank customers are Martinez’s steadfast mission.

“It’s about giving kids a chance to understand how to be better consumers and better citizens,” he says. “As our founder always said, ‘The free enterprise system is the best system in the world.’ He called it the ninth wonder of the world. The 10th wonder is how few people actually understand how to take advantage of it. It really is that knowledge that we’re imparting here. I encounter adults every day who don’t understand what some of our young customers here or our young educational participants know about the global or domestic economies. We’re changing the world, one student at a time.”

Andrea Lahouze is deputy editor of Independent Banker.