A3868

An Act concerning certain savings account promotions and supplementing Title 17 and Title 5 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. A bank or savings bank may conduct a savings promotion provided that the bank or savings bank:

(1) conducts the promotion in a manner so as to ensure that each entry has an equal chance of winning the designed prize;

(2) fully discloses the terms and conditions of the promotion to each of its account holders;

(3) maintains records sufficient to facilitate an audit of the promotion;

(4) ensures that only account holders 18 years of age and older are permitted to participate in the promotion;

(5) does not require any consideration, other than the requirement that the participant deposit money into a savings account or other savings program to obtain entries in the promotion, to participate in the promotion; and

(6) offers an interest rate and charges fees on any qualifying account that are approximately the same as those on a comparable non-qualifying account.

b. For the purposes of this section, “savings promotion” means a raffle in which the sole consideration required for a chance of winning designated prizes is the deposit of a minimum specified amount of money in a savings account or other savings program.

2. a. A State savings and loan association may conduct a savings promotion provided that the association:

(1) conducts the promotion in a manner so as to ensure that each entry has an equal chance of winning the designed prize;

(2) fully discloses the terms and conditions of the promotion to each of its account holders;

(3) maintains records sufficient to facilitate an audit of the promotion;

(4) ensures that only account holders 18 years of age and older are permitted to participate in the promotion;

(6) offers an interest rate and charges fees on any qualifying account that are approximately the same as those on a comparable non-qualifying account.

3. a. A credit union may conduct a savings promotion provided that the credit union:

(1) conducts the promotion in a manner so as to ensure that each entry has an equal chance of winning the designed prize;

(2) fully discloses the terms and conditions of the promotion to each of its account holders;

(3) maintains records sufficient to facilitate an audit of the promotion;

(4) ensures that only account holders 18 years of age and older are permitted to participate in the promotion;

(6) offers an interest rate and charges fees on any qualifying account that are approximately the same as those on a comparable non-qualifying account.

4. Notwithstanding the provisions of any other law to the contrary, a savings promotion offered pursuant to sections 1 through 3 of P.L. , c. (C. )(pending before the Legislature as this bill) shall not:

a. constitute unlawful gambling under the laws of this State, and shall not subject the participant or the sponsor of the promotion, or any officer, employee, or agent of the sponsor, to any civil or criminal liability under the laws of this State that prohibit gambling; and

b. be subject to any of the provisions of chapter 8 of Title 5 of the Revised Statutes.

5. The Commissioner of Banking and Insurance shall promulgate regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), necessary to effectuate the provisions of this act.

6. This act shall take effect on the 180^th day following enactment, except the Commissioner of Banking and Insurance may take such anticipatory action as may be necessary for the implementation of this act.

STATEMENT

This bill authorizes State-chartered banks, savings banks, savings and loans, and credit unions to conduct savings promotions. The bill defines a “savings promotion” as a raffle in which the sole consideration required for a chance of winning designated prizes is the deposit of a minimum specified amount of money in a savings account or other savings program.

The bill also includes certain consumer protections by requiring the participating financial institution to:

(1) conduct the promotion in a manner so as to ensure that each entry has an equal chance of winning the designed prize;

(2) fully disclose the terms and conditions of the promotion to each of its account holders;

(3) maintain records sufficient to facilitate an audit of the promotion;

(4) ensure that only account holders 18 years of age and older are permitted to participate in the promotion;

(5) not require any consideration, other than the requirement that the participant deposit money into a savings account or other savings program to obtain entries in the promotion, to participate in the promotion; and

(6) offer an interest rate and charge fees on any qualifying account that are approximately the same as those on a comparable non-qualifying account.

The bill also clarifies that a savings promotion conducted pursuant to the bill’s provisions does not constitute unlawful gambling under the laws of this State and is not subject to any laws concerning legalized games of chance under chapter 8 of Title 5 of the Revised Statutes.

The purpose of this bill is to encourage depositors to save by allowing these financial institutions to reward their customers for depositing money into savings accounts with a chance to win prizes.