Prize-linked savings legislation passes N.J. Senate
TRENTON, N.J. (5/20/15)--New Jersey Credit Union League-supported (NJCUL) legislation that would authorize New Jersey credit unions and banks to offer prize-linked savings (PLS) accounts passed the state Senate Monday by a 35-0 vote.
S-2495 was sponsored by Sens. Richard Codey (D-Livingston ) and Ronald Rice (D-Newark) (Daily Exchange May 19).
“This legislation opens the door for any New Jersey credit union to provide a tool meant to encourage savings and thrift, particularly among lower-income demographics,” Greg Michlig, NJCUL president/CEO, told News Now. “The idea has been put into practice by credit unions in a number of states and has generated positive results in creating strong savings habits for participating consumers.”
The Assembly version (A-3868) of the bill, sponsored by Assemblymen Herb Conaway (D-Delran), Troy Singleton (D-Laurel), Tim Eustace (D-Bergenfield) and Craig Coughlin (D-Woodbridge), was unanimously approved by the Assembly Financial Institutions and Insurance Committee May 7 and is awaiting a floor vote in the lower House.
Intended to provide incentives for depositors to open and maintain savings accounts, the legislation would authorize New Jersey 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.
The bill also clarifies that a savings promotion conducted as a result of the bill's provisions does not constitute unlawful gambling under the laws of the state and is not subject to any laws concerning legalized games of chance presently in statute.
Thirteen other states have already approved PLS accounts, and similar legislation is pending in Oregon, Illinois, Massachusetts, North Carolina, South Carolina and Texas.