States Gamble On Prized-Based CU Savings Sweepstakes
OLYMPIA, Wash. – Lawmakers will be asked this afternoon to support a bill that would allow credit unions and banks to offer prized-based savings contests, similar to the one staged by Michigan credit unions last year that awarded $100,000 to one saver.
“We’re trying to create an outlet of savings when we have an abysmally low savings rate,” said Stacy Augustine, chief lobbyist for the CU Association, which is pushing for the bill, being heard for the first time by the state Senate’s Labor and Commerce Committee.
The success in Michigan, where participating credit unions say they generated $8.5 million in additional savings through the first year of their contest, is proving irresistible in other states seeking to spur savings for low-income and unbanked consumers without expensive programs. Three states passed legislation last year that will allow credit union-sponsored savings lotteries and as many as six others are working on it this year, according to Augustine.
With the Michigan contest members qualified to participate in drawings by making deposits in their savings accounts.
The Washington bill would amend the state’s Gambling Act so that depositing funds into an account does not qualify as gambling, so is not covered under the Act. It would lay out other restrictions. “We don’t want the gambling casinos to get into the savings business,” said John Annaloro, president of the Northwest league.
The legislation has the support of the state Gambling Commission, the Lottery Commission and the credit union regulator. It also is supported by the Washington Asset Building Coalition, a broad-based group dedicated to building assets for low-income individuals.
To ease passage, the bill would allow banks to also offer savings-based contests.