COLUMBIA, Md., and FARMERS BRANCH, Texas (5/29/15)--With credit union support, two additional states are on the verge of offering prize-linked savings (PLS) to their residents.
In Maryland, a pro-credit union bill that will allow state credit unions and other financial institutions to establish PLS accounts was recently signed into law by Gov. Larry Hogan.
In Texas, the state Senate passed HB 1628, which would allow credit unions and other financial institutions to conduct savings promotion raffles. The bill, sponsored by Rep. Eric Johnson (D-Dallas) and Sen. Jose Rodriguez (D-El Paso), passed Wednesday 24-6. The bill is now headed to Gov. Greg Abbot’s desk for signature, the Cornerstone Credit Union League reported (Leaguer May 27).
The Texas Credit Union Association (TCUA) has been working with the sponsors to support the bill throughout the spring session. HB 1628 ran into problems in the House due to misperceptions that it would expand gambling. TCUA met with lawmakers explaining that there was no risk to depositors in PLS accounts since there is no payment to participate; the only requirement is to save money.
In Maryland, the Senate version of the legislation was introduced and championed by Sen. Kathy Klausmeier (D-Baltimore County), with the House version sponsored by Del. Luke Clippinger (D-Baltimore City). The bill passed without opposition near the end of the legislature’s session--weeks after the Maryland/DC Credit Union Association, Maryland CASH Campaign and other financial institutions submitted testimony and testified in support of the legislation (Communications Exchange May 27).
With the new law in place, credit unions in Maryland will be able to offer raffle-style programs that encourage sound, consistent saving habits among members.
Intended to provide incentives for depositors to open and maintain savings accounts, the legislation would authorize Maryland and Texas credit unions, banks and savings banks to conduct promotions in which a minimum deposit in an amount predetermined by the institution qualifies for a chance to win prizes.
Thirteen other states have already approved PLS accounts, and similar legislation is pending in New Jersey, Pennsylvania, Illinois, Massachusetts, North Carolina and South Carolina.