Authorizes financial institutions to conduct savings promotion prize giveaways

2 Co-sponsors

• Timothy M. Kennedy
• Patty Ritchie

BILL NUMBER:S6805B

Title of bill

An act to amend the banking law, in relation to authorizing financial institutions to conduct savings promotion prize giveaways

Purpose or general idea of bill

To authorize banking organizations to establish prize-linked savings accounts to give incentives to customers to save money by giving them the opportunity to win promotional prizes

Summary of specific provisions

Section 1. adds a new § 9-v to the Banking Law to provide that banking organizations may conduct a savings promotion. This section defines the following terms:

1. "Savings promotion" - means a contest or promotion sponsored by a banking organization in which a chance of winning designated prizes in obtained by the deposit of specified amount of money in a savings account, share account, share certificate, or other savings products or program;

2. "Qualifying account" - means a savings account, share account, share certificate, or other savings product or program offered by a banking organization through which depositors may obtain chances to win prizes in a savings promotion by depositing specified sums of money; and

3. "Non-qualifying account" - means a savings account, share account, share certificate, or other savings product or program offered by a banking organization that is not a qualifying account.

Section 2. - Section 5.- amends various sections of the Banking Law to authorize each banking organization (banks and trust, savings banks, savings and loan associations, and credit unions) to conduct a savings promotion, as well as allow the Superintendent of the Department of Financial Services to promulgate rules and regulations.

Section 6. Provides that this act shall take effect one year after is shall become law.

Justification

Prize-linked savings programs are accounts that provide the chance to win prizes simply by saving money. Programs like these have proven to be successful in several other states (Michigan and Connecticut) and countries, resulting in higher numbers of new savings accounts and larger amounts saved. By depositing the requisite minimal monthly amount, depositors are enrolled in the promotion and are given the chance to win designated prizes by their financial institution. This greatly benefits not only the Individual, but local and state economies as a whole.

Prior legislative history

S.5145 / A.7341 of 2013 - Veto Memo 229

Fiscal implications for state and local governments

None to the State.

Effective date

This act shall take effect one year after it shall have become law.