senate Bill S6805B

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

See Assembly Version of this Bill:
A9037A
Versions:
S6805
S6805A
S6805B
Legislative Cycle:
2013-2014
Law Section:
Banking Law
Laws Affected:
Add §9-v, amd §§96, 234, 383 & 454, Bank L

Sponsor Memo

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.

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

                                 6805--B
    Cal. No. 597

                            I N  S E N A T E

                             March 12, 2014
                               ___________

Introduced  by  Sens.  LANZA, KENNEDY, RITCHIE -- 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 -- reported favorably from said commit-
  tee, ordered to first and second report,  amended  on  second  report,
  ordered  to a third reading, and to be reprinted as amended, retaining
  its place in the order of third reading

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.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13805-06-4

S. 6805--B                          2

  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
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

S. 6805--B                          3

  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  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 one year after it shall have become a
law.

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