Bank teaches girls, 9, an unintentional lesson

January 25, 1996|By MICHAEL OLESKER

Everybody's a little edgy about the banks these days. You give them your money, they give you the back of their hand. You want to talk about your accounts, they make you pay for it. You wonder where your child's money disappeared, you stand in line with Dr. Marc Leavey.

His child, Dena, 9, opened a savings account at her school, which is Fort Garrison Elementary. It's a program linked to NationsBank, and it's a variation of school-banking programs promoted through much of this century by various financial institutions.

The premise is simple: The kids learn the value of saving, and the banks establish loyalty with young customers, plus make a few extra bucks. Perhaps, a few too many. This is where Dr. Leavey enters. Also, where NationsBank says, Sorry about that.

In the fall, Dr. Leavey's daughter was asked to bring in $5 to open a NationsBank account at her school. According to Principal Lois Balcer, about 300 Fort Garrison students are taking part.

Two weeks ago, Dr. Leavey glanced at the bank statements NationsBank was sending to Dena. Then, he proceeded to hit the ceiling. He wrote a letter to the bank.

"Imagine my surprise," he wrote, "when we received the first statement. Starting with a balance of $5 at the end of October, Dena earned one penny in interest in November -- but paid a $2 maintenance fee, ... earned another penny in December -- and paid another $2 fee. Her ending balance on this first statement was $1.02.

"I don't know about you, but I think that trying to explain to a nine-year old about the importance of banking, while showing her how her $5 deposited was reduced to a hair more than a buck is about as hard as balancing the federal budget, maybe harder. I am not clear as to whether the purpose of this exercise was to teach the children about banking, or make a few fast dollars for the bank.

"In an attempt to remedy this situation, I am not expecting you to dip into your pockets in these tight fiscal times, bend your rules, and give my daughter her $5 back. I am asking you to close her account, and send her the remaining funds, in cash. I would also like you to write her a letter, in words that she can understand, about why opening an account at your bank, and having you hold her money so that you can invest it and earn money on it, cost her 80 percent of her investment."

What we have here, aside from one angry dad, is a public relations problem for NationsBank, which already has enough of them. It arrived here from North Carolina, virtually simultaneous to the time it was helping that state win a pro football team that should have been Baltimore's. It declared there would be no layoffs of bank employees -- but, between its arrival here in 1993 and last June, announced roughly 1,200 layoffs. It's begun the unpopular practice of charging depositors money for inquiries about their own accounts. And, as the biggest bank in Maryland, it took its share of heat when consumer advocacy groups said Maryland banks charge some of the highest fees in the country.

Thus, in the current climate, NationsBank doesn't need to be seen picking on a little girl for $5.

On Tuesday, NationsBank spokesman John Riggin said the bank's program reaches about 100 schools in the Baltimore area. He said the bank's official policy on accounts for children under 18 is that no fees are to be charged for the first year. After that, there's a $1 fee per month, if the account exceeds $100.

So, somebody seems to have goofed.

"Yes," Riggin said, "it does sound ludicrous. But, as far as I know, it only happened with Dr. Leavey's daughter."

Well, not exactly.

At Fort Garrison, it turns out, there are more children whose parents have called to ask about similar arithmetic in their children's accounts.

"Someone at the bank," says Principal Balcer, "seems to have pushed the wrong key on about a dozen accounts."

Apprised of parental complaints, NationsBank Vice President William I. Wright sent a letter, saying, "Please accept our apologies if your child's account received a 'maintenance fee' in November or December. ... Some accounts were incorrectly coded and therefore were charged fees. ... [We will] refund any charges that were applied to the account. ... We apologize if this oversight affected the account."

Such things can happen. But, in the current climate, where nobody's too crazy about the banks, we all leap to darkest conclusions.

In such an atmosphere, who "wouldn't" believe a bank would ask kids for their money, and then walk off with 80 percent of it?

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