New York Gov. Andrew Cuomo has signed into law a measure that allows financial institutions to offer raffle-style programs to encourage saving.
The law, which takes effect in September 2015, gives credit unions and banks the ability to offer prize giveaways to consumers who deposit funds into their savings accounts. Such prize-linked savings programs have become popular with banks in a number of states, including Michigan, Nebraska and Massachusetts. The law was needed to protect financial institutions from anti-gambling laws and other rules that barred such contests.
Industry officials said incentives are needed to encourage consumers to save for the future.
"This bill, applicable to all financial institutions in the state, meets this goal and will give New Yorkers another tool to manage their personal finances," Michael P. Smith, president and chief executive of the New York Bankers Association, said in an email.
"This important law will encourage New York consumers to save money more often and more regularly," William J. Mellin, president of the Credit Union Association of New York, said in a news release. "Ultimately, prize-linked savings accounts will benefit the working and middle-class families who continually struggle to put money away for the future."
Cuomo's office did not immediately respond to a request for comment.