This bill has been amended

Bill S6805A-2013

Authorizes financial institutions to conduct savings promotion prize giveaways

Authorizes financial institutions to conduct savings promotion prize giveaways.

Details

Actions

  • May 12, 2014: 2ND REPORT CAL.
  • May 7, 2014: 1ST REPORT CAL.597
  • Apr 28, 2014: PRINT NUMBER 6805A
  • Apr 28, 2014: AMEND AND RECOMMIT TO BANKS
  • Mar 12, 2014: REFERRED TO BANKS

Meetings

Calendars

Votes

VOTE: COMMITTEE VOTE: - Banks - May 7, 2014
Ayes (16): Griffo, Farley, Bonacic, DeFrancisco, Golden, Marchione, Martins, Marcellino, O'Mara, Ranzenhofer, Valesky, Avella, O'Brien, Breslin, Diaz, Kennedy
Ayes W/R (2): Parker, Gipson
Nays (1): Sanders

Memo

BILL NUMBER:S6805A

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 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, however, 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.


Text

STATE OF NEW YORK ________________________________________________________________________ 6805--A IN SENATE 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
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 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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