Iowa CUs Lose Gamble On Savings Lottery
DES MOINES – State lawmakers killed a bill yesterday that would have allowed credit unions and banks to offer prize-linked savings contests in Iowa, one of five states considering the credit union-initiated savings lotteries.
The bill, which passed the state Senate last month, died in the House, amid strong opposition by the banking lobby which would also have been allowed to offer the savings prizes. The Iowa Bankers Association argued that linking savings to money prizes provides the wrong incentives for savers. The bankers also tried to tie the proposed lottery prize to the credit union tax exemption, arguing the prizes would be financed by the tax exemption.
Iowa credit unions, which are barred from offering financial incentives for contests under the state’s gambling laws, hopes to create a statewide lottery like the one in Michigan where credit unions awarded one winner a $100,000 prize each of the last two years.
Lottery bills are also pending in Washington, Nebraska, North Carolina and Rhode Island.