senate Bill S6805A

Amended

Authorizes financial institutions to conduct savings promotion prize giveaways

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 12 / Mar / 2014
    • REFERRED TO BANKS
  • 28 / Apr / 2014
    • AMEND AND RECOMMIT TO BANKS
  • 28 / Apr / 2014
    • PRINT NUMBER 6805A
  • 07 / May / 2014
    • 1ST REPORT CAL.597
  • 12 / May / 2014
    • 2ND REPORT CAL.
  • 13 / May / 2014
    • AMENDED 6805B
  • 13 / May / 2014
    • ADVANCED TO THIRD READING
  • 20 / May / 2014
    • SUBSTITUTED BY A9037A

Summary

Authorizes financial institutions to conduct savings promotion prize giveaways.

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Bill Details

Versions:
S6805
S6805A
S6805B
Legislative Cycle:
2013-2014
Law Section:
Banking Law
Laws Affected:
Add §9-v, amd §§96, 234, 383 & 454, Bank L

Votes

16
1
16
Aye
1
Nay
2
aye with reservations
0
absent
0
excused
0
abstained
show Banks committee vote details

Sponsor Memo

BILL NUMBER:S6805A

TITLE OF BILL: An act to amend the banking law, in relation to author-
izing financial institutions to conduct savings promotion prize give-
aways

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 is
obtained by the deposit of specified amount of money in a saving
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;

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

Section 2: amends various sections of the Banking Law to authorize each
banking organization to conduct a savings promotion. In addition,
authorizes the Superintended to promulgate rules and regulations, howev-
er, requires consultation with the State Gaming Commission before
proposing any newly enacted rules or regulations.

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 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: This is new legislation.

Fiscal Implications For State And Local Governments: None to the State.

Effective Date: This act will take effect the 180th day after it shall
become law.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 6805--A

                            I N  S E N A T E

                             March 12, 2014
                               ___________

Introduced  by  Sen.  LANZA  -- read twice and ordered printed, and when
  printed to be  committed  to  the  Committee  on  Banks  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

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

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The banking law is amended by adding a new section 9-v to
read as follows:
  S 9-V.   SAVINGS PROMOTION PRIZE GIVEAWAY.    A  BANKING  ORGANIZATION
ORGANIZED  UNDER  OR  SUBJECT TO THE PROVISIONS OF THIS CHAPTER, FEDERAL
CREDIT UNION, FEDERAL SAVINGS BANK, FEDERAL  SAVINGS  AND  LOAN  ASSOCI-
ATION,  OR  NATIONAL BANK ASSOCIATION MAY CONDUCT A SAVINGS PROMOTION IN
ACCORDANCE WITH THE PROVISIONS OF THIS SECTION, TO THE EXTENT IT IS  NOT
PROHIBITED BY FEDERAL LAW OR REGULATION.
  1. DEFINITIONS. AS USED IN THIS SECTION THE FOLLOWING TERMS SHALL HAVE
THE FOLLOWING MEANINGS:
  A. THE TERM "SAVINGS PROMOTION" MEANS A CONTEST OR PROMOTION SPONSORED
BY  A  BANKING ORGANIZATION, FEDERAL CREDIT UNION, FEDERAL SAVINGS BANK,
FEDERAL SAVINGS AND LOAN ASSOCIATION, OR NATIONAL  BANK  ASSOCIATION  IN
WHICH  A  CHANCE  OF WINNING DESIGNATED PRIZES IS OBTAINED BY ITS DEPOS-
ITORS FOR THE PURPOSES OF ENCOURAGING DEPOSITORS TO BUILD  AND  MAINTAIN
SAVINGS DEPOSITS.
  B.  THE  TERM  "QUALIFYING  ACCOUNT"  MEANS  A  SAVINGS ACCOUNT, SHARE
ACCOUNT, SHARE CERTIFICATE, OR OTHER SAVINGS PRODUCT OR PROGRAM  OFFERED
BY  A  BANKING ORGANIZATION, FEDERAL CREDIT UNION, FEDERAL SAVINGS BANK,
FEDERAL SAVINGS AND  LOAN  ASSOCIATION,  OR  NATIONAL  BANK  ASSOCIATION
THROUGH  WHICH  DEPOSITORS MAY OBTAIN CHANCES TO WIN PRIZES IN A SAVINGS
PROMOTION.
  C. THE TERM "NON-QUALIFYING ACCOUNT" MEANS A  SAVINGS  ACCOUNT,  SHARE
ACCOUNT,  CERTIFICATE  OF  DEPOSIT,  OR OTHER SAVINGS PRODUCT OR PROGRAM
OFFERED BY A BANKING ORGANIZATION, FEDERAL CREDIT UNION, FEDERAL SAVINGS

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13805-04-4

S. 6805--A                          2

BANK, FEDERAL SAVINGS AND LOAN ASSOCIATION, OR NATIONAL BANK ASSOCIATION
THAT IS NOT A QUALIFYING ACCOUNT.
  2.  RULES  OF  OPERATION. A. PARTICIPANTS IN A SAVINGS PROMOTION SHALL
NOT BE REQUIRED TO PROVIDE ANY CONSIDERATION IN ORDER TO OBTAIN  ENTRIES
TO WIN. FOR PURPOSES OF THIS PARAGRAPH, PARTICIPANTS SHALL NOT BE DEEMED
TO  HAVE PROVIDED CONSIDERATION DUE TO THE REQUIREMENT THAT THEY DEPOSIT
MONEY IN A QUALIFYING ACCOUNT TO OBTAIN ENTRIES TO WIN, SO LONG AS:  (I)
THE  INTEREST  RATE  ASSOCIATED  WITH ANY SUCH QUALIFYING ACCOUNT IS NOT
REDUCED WHEN COMPARED  WITH  OTHER  COMPARABLE  NON-QUALIFYING  ACCOUNTS
OFFERED  BY  ANY  BANKING  ORGANIZATION,  FEDERAL  CREDIT UNION, FEDERAL
SAVINGS BANK, FEDERAL SAVINGS AND  LOAN  ASSOCIATION  OR  NATIONAL  BANK
ASSOCIATION, TO ACCOUNT FOR THE POSSIBILITY OF DEPOSITORS WINNING SPECI-
FIED  PRIZES;  AND  (II)  NO BANKING ORGANIZATION, FEDERAL CREDIT UNION,
FEDERAL SAVINGS BANK, FEDERAL SAVINGS AND LOAN ASSOCIATION, OR  NATIONAL
BANK  ASSOCIATION  MAY  CHARGE  A  FEE  FOR  ENTRY.  ALL FEES CHARGED IN
CONNECTION WITH SUCH QUALIFYING ACCOUNT SHALL  BE  COMPARABLE  WITH  ALL
FEES   CHARGED   IN  CONNECTION  WITH  OTHER  COMPARABLE  NON-QUALIFYING
ACCOUNTS, IF ANY, OFFERED BY ANY BANKING  ORGANIZATION,  FEDERAL  CREDIT
UNION,  FEDERAL  SAVINGS  BANK, FEDERAL SAVINGS AND LOAN ASSOCIATION, OR
NATIONAL BANK ASSOCIATION.
  B. A SAVINGS PROMOTION SHALL BE CONDUCTED SUCH THAT EACH ENTRY IN  THE
SAVINGS PROMOTION HAS AN EQUAL CHANCE OF BEING DRAWN.
  C.  PARTICIPANTS  IN  A  SAVINGS PROMOTION SHALL NOT BE REQUIRED TO BE
PRESENT AT A PRIZE DRAWING IN ORDER TO WIN.
  D. THE OFFERING OF A SAVINGS PROMOTION SHALL  BE  SUBJECT  TO  SECTION
THREE  HUNDRED  SIXTY-NINE-E  OF  THE  GENERAL  BUSINESS LAW IN THE SAME
MANNER AS OTHER PROMOTIONS REGULATED THEREUNDER.  FOR  PURPOSES  OF  THE
GENERAL  BUSINESS  LAW AND THE PENAL LAW, A SAVINGS PROMOTION OFFERED IN
ACCORDANCE WITH THIS CHAPTER SHALL NOT BE DEEMED TO ENTAIL CONSIDERATION
OR THE PROMOTION OF GAMBLING OR A LOTTERY.
  S 2. Section 96 of the banking law is amended by adding a new subdivi-
sion 15 to read as follows:
  15. TO ENGAGE IN A "SAVINGS  PROMOTION"  IN  ACCORDANCE  WITH  SECTION
NINE-V OF THIS CHAPTER AND SUBJECT TO ANY REGULATIONS PROMULGATED BY THE
SUPERINTENDENT.   THE SUPERINTENDENT SHALL CONSULT WITH THE STATE GAMING
COMMISSION BEFORE PROPOSING ANY SUCH REGULATIONS OR ANY AMENDMENTS THER-
ETO. SUCH REGULATIONS SHALL ENSURE THAT:
  A. NO PARTICIPANT IN A SAVINGS PROMOTION IS CHARGED ANY FEE THAT WOULD
CONSTITUTE, DIRECTLY OR INDIRECTLY, CONSIDERATION FOR  PARTICIPATION  IN
SUCH SAVINGS PROMOTION; AND
  B.  NO  PARTICIPANT IN A SAVINGS PROMOTION FOREGOES, DIRECTLY OR INDI-
RECTLY, ANY INTEREST THAT WOULD  CONSTITUTE  CONSIDERATION  FOR  PARTIC-
IPATION IN SUCH SAVINGS PROMOTION.
  S  3. Section 234 of the banking law is amended by adding a new subdi-
vision 26 to read as follows:
  26. TO ENGAGE IN A "SAVINGS  PROMOTION"  IN  ACCORDANCE  WITH  SECTION
NINE-V OF THIS CHAPTER AND SUBJECT TO ANY REGULATIONS PROMULGATED BY THE
SUPERINTENDENT.   THE SUPERINTENDENT SHALL CONSULT WITH THE STATE GAMING
COMMISSION BEFORE PROPOSING ANY SUCH REGULATIONS OR ANY AMENDMENTS THER-
ETO. SUCH REGULATIONS SHALL ENSURE THAT:
  A. NO PARTICIPANT IN A SAVINGS PROMOTION IS CHARGED ANY FEE THAT WOULD
CONSTITUTE, DIRECTLY OR INDIRECTLY, CONSIDERATION FOR  PARTICIPATION  IN
SUCH SAVINGS PROMOTION; AND
  B.  NO  PARTICIPANT IN A SAVINGS PROMOTION FOREGOES, DIRECTLY OR INDI-
RECTLY, ANY INTEREST THAT WOULD  CONSTITUTE  CONSIDERATION  FOR  PARTIC-
IPATION IN SUCH SAVINGS PROMOTION.

S. 6805--A                          3

  S  4. Section 383 of the banking law is amended by adding a new subdi-
vision 17 to read as follows:
  17.  TO  ENGAGE  IN  A  "SAVINGS PROMOTION" IN ACCORDANCE WITH SECTION
NINE-V OF THIS CHAPTER AND SUBJECT TO ANY REGULATIONS PROMULGATED BY THE
SUPERINTENDENT.  THE SUPERINTENDENT SHALL CONSULT WITH THE STATE  GAMING
COMMISSION BEFORE PROPOSING ANY SUCH REGULATIONS OR ANY AMENDMENTS THER-
ETO. SUCH REGULATIONS SHALL ENSURE THAT:
  A. NO PARTICIPANT IN A SAVINGS PROMOTION IS CHARGED ANY FEE THAT WOULD
CONSTITUTE,  DIRECTLY  OR INDIRECTLY, CONSIDERATION FOR PARTICIPATION IN
SUCH SAVINGS PROMOTION; AND
  B. NO PARTICIPANT IN A SAVINGS PROMOTION FOREGOES, DIRECTLY  OR  INDI-
RECTLY,  ANY  INTEREST  THAT  WOULD CONSTITUTE CONSIDERATION FOR PARTIC-
IPATION IN SUCH SAVINGS PROMOTION.
  S 5. Section 454 of the banking law is amended by adding a new  subdi-
vision 37 to read as follows:
  37.  TO  ENGAGE  IN  A  "SAVINGS PROMOTION" IN ACCORDANCE WITH SECTION
NINE-V OF THIS CHAPTER AND SUBJECT TO ANY REGULATIONS PROMULGATED BY THE
SUPERINTENDENT.  THE SUPERINTENDENT SHALL CONSULT WITH THE STATE  GAMING
COMMISSION BEFORE PROPOSING ANY SUCH REGULATIONS OR ANY AMENDMENTS THER-
ETO. SUCH REGULATIONS SHALL ENSURE THAT:
  A. NO PARTICIPANT IN A SAVINGS PROMOTION IS CHARGED ANY FEE THAT WOULD
CONSTITUTE,  DIRECTLY  OR INDIRECTLY, CONSIDERATION FOR PARTICIPATION IN
SUCH SAVINGS PROMOTION; AND
  B. NO PARTICIPANT IN A SAVINGS PROMOTION FOREGOES, DIRECTLY  OR  INDI-
RECTLY,  ANY  INTEREST  THAT  WOULD CONSTITUTE CONSIDERATION FOR PARTIC-
IPATION IN SUCH SAVINGS PROMOTION.
  S 6. This act shall take effect on the one hundred eightieth day after
it shall have become a law.

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