Effective Date: 9-16-19
The purpose of this section is to share information on processes and laws pertaining to helping youth develop financial capability and well-being.
5.6.1 Credit Checks
The Child and Family Services Improvement and Innovation Act of 2011 and the Preventing Sex Trafficking and Strengthening Families Act of 2016 requires each youth age 14 and older in foster care receive a copy of any consumer credit report each year until discharged from foster care, and youth must be assisted in interpreting the credit report and resolving any inconsistencies.
Building and maintaining credit is vital to successful transition from foster care.
Information on credit reports is used to evaluate applications for credit, employment, insurance, and renting a home. Monitoring credit reports is one of the best ways to discover identity theft.
For youth who turn age 14, 15, 16 and 17 while in care or come into care at age 14, 15, 16 or 17, the credit history will be obtained by Central Office. Staff will receive notification on their youth via e-mail that the information was submitted through an agreement with TransUnion. This is the date staff will be record on the Adolescent Family Support Team Guide (CD94). Staff will be notified if there are credit discrepancies and/or inaccuracies but will not receive a “report” for youth age 14-17.
For youth age 18 and older, free credit reports from three nationwide consumer credit reporting companies can be requested online at AnnualCreditReport.com, by phone at 1-877-322-8228, or by completing the Annual Credit Report Request Form and mailing the completed form to Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 303048-5281. All three reports may be requested at once or ordered one at a time. Ordering separately allows monitoring of credit more frequently throughout the year.
AnnualCreditReport.com is the only authorized source for the free annual credit report that can be obtained per the Fair Credit Reporting Act.
Because the information in credit reports is used to evaluate applications for credit, insurance, employment, and renting a home, the information needs to be accurate and up-to-date. Any information regarding a youth with a credit history should be shared with the youth. For 18, 19, and 20 year olds there may be legitimate negative items due to late payments or debts. Regardless of the reason steps should be taken to help resolve these issues if possible. The Children’s Service Worker should assist youth in interpreting the credit report and resolving any inconsistencies. Information to assist with interpretation and education can be found on the Federal Trade Commission’s website.
Under the Fair Credit Reporting Act, both the credit reporting company and the information provider (the person, company, or organization that provides information to a credit reporting company) are responsible for correcting inaccurate or incomplete information in reports. When reviewing the report with youth, if there are accounts that are not recognized or information that is inaccurate, there is concern for identity fraud. Identity fraud is when a consumer whose means of identification or financial information is used or transferred without authorization from the consumer.
Examples of concern would be credit cards that the youth has not opened, utility bills in the youth’s name that were prior to the youth residing on his/her own, or car purchases if the youth does not have a vehicle.
If the Children’s Service Worker suspects identity fraud, the Family Support Team and the Division of Legal Services (investigations and/or litigation section) should be consulted to determine if an investigation or referral to law enforcement is necessary. If the youth’s identity has been compromised the worker should send a referral to the Division of Legal Services so the necessary legal steps to correct the problem can be taken. Notice should be provided to the youth’s Juvenile Officer and Guardian Ad Litem about the report findings.
If there is a need to further educate youth regarding credit, Children’s Service Workers should address this on the Adolescent Family Support Team Guide (CD94) and Individualized Action Plan Goals (CD94) by creating new goals. The Chafee provider will assist with identified tasks of the new goals.
The Adolescent FST Guide (CD94) should be updated to reflect that the credit report has been received on a yearly basis, beginning when the youth turns 14 or comes into care after age 14 and each subsequent year thereafter while in foster care.
All documentation pertaining to the credit checks should be filed in the Older Youth Section of the youth’s record i.e. request form, credit report, e-mail correspondence from Central office.
As this is life skill teaching, documentation of this service should also be included on the NYTD Older Youth Services and Financial Expenditures Screen in FACES.
5.6.2 Youth Bank Accounts
In 2018 Missouri legislation was passed to allow youth ages 16-17 in the legal custody of Children’s Division to open a bank account without a co-signer. This legislation enhances Children’s Division’s efforts to implement the “Reasonable and Prudent Parent Standard,” to reduce the systemic barriers which keep youth from participating in enrichment activities and life skill development opportunities comparable to their peers who aren’t in care.
Because youth in legal custody of the Children’s Division experience challenges in developing long term supportive relationships with trusted adults, they are less likely to have an appropriate co-signer when opening a bank account. The experience of managing a bank account when youth begin working or handling their own money is an important developmental experience which can help prepare them for independence as adults. This statute and policy ensure that being in the legal custody of Children’s Division is not a barrier to the opportunity of having a bank account and provides protocol for Children’s Service Workers with youth seeking to open a bank account.
Per RSMo 431.056, youth ages 16-17 in the legal custody of Children’s Division may open a checking or savings bank account with the consent of the Children’s Division or the Juvenile Court without a co-signer, and “The minor shall be responsible for paying all banking related costs associated with the checking or savings account and shall be liable for any and all penalties should he or she violate a banking agreement. No state department, foster parent, or entity providing case management of children on behalf of a department shall be responsible for paying any bank fees nor liable for any and all penalties related to violation of a banking agreement.”
When a qualifying youth wishes to open a bank account, the Children’s Service Worker must provide a signed consent letter CD-277 verifying that they are in legal custody of the Children’s Division. This letter will be presented by the youth to the banking institution where they wish to open a bank account. A paper or digital copy of the letter should also be placed in the youth’s record.
The Children’s Service Worker should also ensure that education is provided to the youth about the various types of accounts available and the risks associated with banking, and give the youth the “Checklist for Opening a Bank or Credit Union Account” published by the Consumer Financial Protection Bureau. For youth who are enrolled in Chafee Services, and applying for a bank account, the Children’s Service Worker should identify and add financially related goals to the youth’s Adolescent FST Guide and Individualized Action Plan. Examples of banking related goals can be found in the Casey Life Skills Resources to inspire on pages 34-35. Additional financial empowerment training can be found on the ELC.
A letter of consent should be provided to the youth upon request unless there are documented physical or mental conditions which would prevent them from entering into other legal contracts. In this case, the Children’s Service Worker and their immediate Supervisor shall meet with the Regional Director/Designee for further consultation. The youth shall be notified of a final decision and rationale by the Children’s Service Worker. Documentation of the final decision and rationale should documented in the youth’s record.
Related Practice Alerts and Memos:
8-26-19 – CD19-53 – Youth Bank Accounts
10-17-19 – PP19-CM-05 (Youth Bank Accounts CD-277)