PORTLAND, Ore. (4/4/14)--Washington credit unions are celebrating the one-year anniversary of their right to offer prize-linked saving accounts with some gaudy numbers. Through February, 834 members had opened "Save to Win" accounts at Washington credit unions, with total deposits of nearly $785,000. The average saved per account is about $940.
"Creating solid financial management behaviors in households across our nation and in the Northwest is critically important to the financial stability of every family," said Troy Stang, Northwest Credit Union Association (NWCUA) president/CEO. "The concept of linking savings with the chance of winning prizes has proven successful in several other well-developed nations around the globe, and studies in this country have proven the same."
Under the "Save to Win" concept, credit unions create a kind of lottery in which players can win cash prizes just by saving money--and make it impossible for them to lose a dime, the NWCUA reported (Anthem April 1). All of the money members deposit in the 12-month certificate program stays in their accounts, because the prize pool is funded by other credit union resources. Strategic Link, the NWCUA's wholly owned subsidiary, funds the prize pool.
As members build their assets, they're also eligible to win--each $25 deposit earns an entry into monthly and annual drawings, and members can earn up to 10 chances to win every month.
Typically, the monthly drawings award multiple $50 prizes. But on April 14, three $5,000 monthly prizes will be awarded in Washington. And later this month, the winner of the state's first $5,000 annual prize will be announced.
The Michigan Credit Union League brought the concept to the U.S. in 2009; Nebraska and North Carolina soon added their own programs. Six Washington credit unions signed on when the program debuted in April 2013:
This week, Peninsula Community FCU, Shelton, Wash., became the seventh Washington participant, launching its "Save to Win" program at a celebratory breakfast in Belfair attended by U.S. Rep. Derek Kilmer (D-Wash.). Kilmer was a state senator when he sponsored the Washington legislation that cleared the way for "Save to Win" in 2011.
A bill that would allow financial institutions in New York to establish prize-linked savings accounts cleared that state's Assembly last week, and an identical version of the bill has been introduced in the state Senate. Legislation authorizing a work group to study the possibility of allowing prize-linked savings accounts under authority of the Oregon State Lottery failed to gain support in the just-concluded legislative session in Salem, but Pam Leavitt, the NWCUA's policy adviser for legislative affairs, said she expects the issue to come up again in 2015.