The bank is insured for this very thing. Don't for a moment they're not. It won't cost them a thing, it's a cost of doing business. They MAKE money if they can get you to let them charge you for what was stolen.
Cops. Like Wolfy said, get them involved. You need a paperwork trail.
He's old enough, maybe not smart enough but I bet any kid that can find the passwords to a strangers bank account isn't really stupid, to know right from wrong. Coddle him now and he's the drunk kid plowing into a grandstand at graduation just a few years down the road.
Start a facebook page: Parents of local child who steals from the elderly. Put up pictures of his parents that are out there on the web already. Embarrass them and maybe something will get done.
Good luck.