Banking: Swinging with Youth

The fun began after First City National Bank, Houston’s largest, discovered some disquieting statistics. The average age of its depositors was well over 50, compared with a citywide average of only 27.8 years. Convinced that an aging clientele meant future trouble in attracting deposits, the bank’s officers decided to woo young customers with some remarkably unbankerlike services. Accordingly, the bank last spring started a “Young Houstonian Club” for young people who opened checking accounts. Already that organization is demonstrating that banking can shed its stodgy image and remain successful.

Club members, who must be between 21 and 35 years old, are offered a tempting variety of parties, seminars and trips. In July, 55 club members jetted to Acapulco for a weekend spree of sun and sea. Later in the month, 500 members frolicked as guests of the bank at a barbecue and beer bust. There was a reception for Singer Glen Campbell before his Houston concert and a private premiere showing of John Wayne’s new movie, True Grit. Recognizing that club members are affluent—their average salary is more than $10,000 a year—merchants have been vying for their patronage with tempting discounts. One restaurant gives members a free bottle of wine with dinner. Another restaurant discounts the chit by 30%.

The preferential treatment continues right up to the teller’s window. Club members do business in a special section of the bank decorated in lively shades of yellow, green and blue that contrast sharply with the beige carpets and gray draperies found elsewhere. Club members pay a $3 monthly service charge and must open accounts at the bank with a $50 minimum deposit. In return, they receive 30 rainbow-colored free checks a month, a free $10,000 accidental-death policy and an open line of credit good for up to $2,000. Most accounts start small but soon grow. Terry Colley, the manager of the club, explains: “After they go to a few of our parties, we begin to get their paychecks.”

One of the club’s greatest attractions is its members. “There are eligible young bachelors at all of our parties,” enthuses Sharon Caudle, 24, an insurance company trainee. “If I can meet all these men for $3 a month, then I’m getting my money’s worth.” The feeling is widespread, and a quarter of the club’s 2,000 members are single women. Bank officers had expected to enroll 2,200 young Houstonians in the first year, but that goal has already been reached and 500 new members are signing up each month. More surprising, they maintain an average balance of $250, and bank officers expect that the club will soon become profitable as well as promotional.

Lifelong Friends. The youth club idea originated at Chicago’s Central National Bank in 1967 as a way of acquainting young people with the wide range of services a bank can offer. “By extending ourselves now,” explains Paul Jaffe, the officer in charge of the Chicago club, “we hope to make lifelong friends.” Central National has avoided anything so flamboyant as a beer bust, but its club activities run the gamut from Caribbean cruises to courses in speed reading.

Some bankers find the club idea unappealing. “Pure gimmickry,” says Vice President Eugene Callan of New York’s First National City Bank. Nonetheless, banks in a dozen cities, including Detroit, Philadelphia and Denver, have started youth clubs, and others, such as Manhattan’s Bankers Trust Company, expect to start enrolling members within the next year.