Thanks in large part to the advocacy efforts of the Heartland Credit Union Association, credit unions in both Kansas and Missouri will soon be able to offer prize-linked savings (PLS) programs to their members.
Missouri Gov. Jay Nixon (D) signed HB 2125, which includes the Missouri Savings Promotion Act, on June 13. The bill was approved and finally passed by a vote of 149-4 in the Missouri House of Representatives last month, during the final week of the state legislative session. Credit unions and the HCUA sent letters to the governor in support of the legislation. The bill will become law on August 28.
Kansas Gov. Sam Brownback (R) officially approved SB 390, the Kansas Savings Promotions Act legislation in Kansas last month. The bill goes into effect on July 1. Kansas U.S. Senator Jerry Moran (R) sponsored the federal legislation passed in 2014 that broadened accessibility to PLS programs.
PLS accounts encourage positive savings behavior by offering savers entries into cash-prize raffles each time they save a certain amount of money. Most PLS programs hold raffles monthly, quarterly, and annually. Even if members don’t receive the cash prize, they still win by building healthier savings accounts.
“Credit unions are focused on helping people save, and this will provide more opportunities for consumers to save in both Kansas and Missouri,” saidBrad Douglas, president/CEO of the Heartland Credit Union Association. “These programs have been a valuable tool for credit unions across the country, and we look forward to working with our credit unions to help members get in the habit of saving money and building a financial safety net.”
Missouri U.S. Sen. Claire McCaskill (D), who is the ranking member on the U.S. Senate Special Committee on Aging, is expected to highlight PLS accounts during a June 15 hearing titled “Closing the Gap: Innovations to Promote Americans’ Financial Security.” Kansas and Missouri credit unions will be on hand in Washington, D.C. for the HCUA Hike the Hill.
Nineteen states now authorize financial institutions to offer this product, including South Carolina, Louisiana, New Jersey, Michigan, Rhode Island, Maine, Washington, North Carolina, Nebraska, Maryland, Connecticut, Indiana, New York, Arkansas, Illinois, Minnesota, Oregon and Virginia.