HARRISBURG, Penn.—Pennsylvania may become the next state to allow prize-linked savings.
State Rep. Rosemary Brown (R-Monroe) has introduced House Bill 837, the Savings Promotion Raffle Authorization Act.
The legislation would authorize certain financial institutions, including credit unions, to conduct savings promotion raffles. The Pennsylvania CU Association said it is working closely with Brown and other policy stakeholders on the initiative.
"Studies indicate that consumers are not saving for their futures and programs to promote saving is a win for all consumers," said PCUA President and CEO Patrick Conway. “Credit unions work daily to better the lives of members, and this initiative is another avenue to assist them."
The league reminded that the concept of prize-linked savings is to transition non-regular savers into regular savers. “With as little as $25, a credit union member can open an account and enter a drawing for monthly and annual cash prizes. Some will win prize money, but those who do not will still benefit from having started an interest-generating savings account. Credit unions fund the program, thereby achieving the public policy goal of increasing savings with no cost to the state,” the league said.
Ten other states: Washington, Maryland, Connecticut, Maine, Indiana, Nebraska, Rhode Island, New York, Michigan and North Carolina, already permit prize-linked savings.
Legislation that would allow New Jersey-based, state-chartered financial institutions to offer prize-linked savings accounts was unanimously approved by the state Senate’s Commerce Committee earlier this year. And a bill has been introduced in the Minnesota legislature to permit credit unions in the state to offer the savings programs.
Late last year, the Senate passed the American Savings Promotion Act, which allows credit unions to offer prize-linked savings accounts in those states where there is no prohibition.