DOBI Publishes Long-Awaited Proposed Prize-Linked Savings Rules

TRENTON N.J. – The NJ Department of Banking and Insurance yesterday published the long-waited proposed implementation rules for NJCUL-requested legislation that authorizes New Jersey credit unions, banks, and thrifts to offer savings promotions, also known as "prize-linked savings accounts." Signed into law in January 2016, the measure had an effective date of July 19, 2016 to allow for necessary rulemaking.

The legislation (S2495/A3868, now P.L.2015, c.236) authorizes depositories in the state to conduct promotions, or “prize-linked savings accounts” in which a minimum deposit in an amount predetermined by the institution qualifies for a chance to win prizes.

The idea has been put into practice in a number of states by non-profits and credit unions, and has been successfully implemented internationally.

Legislation to allow federally chartered financial institutions to offer prize-linked accounts was signed into law by President Obama in December 2014.

The New Jersey law enables state chartered institutions to offer the accounts, and also clarifies that such savings promotion programs conducted by either state or federally chartered institution do not constitute unlawful gambling under state law, and are not subject to any laws concerning legalized games of chance presently in statute.

There is a sixty-day comment period during which interested parties may submit comments on the proposed rules

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