Late last year, a new Missouri law went into effect that allows banks and credit unions to sponsor certain savings promotion programs for their customers. Under these programs, by opening a new savings account or depositing a specified amount of money into an account that is already open, customers will have a chance to win prizes.
The new state statute is derived from the Federal American Saving Promotion Act and is similar to laws enacted by several other states. The purpose of these laws is to encourage savings and increase savings rates to help participating customers build a secure financial future.
Prior to enactment of the new law, requiring participants to maintain a certain balance in an account or deposit money in one in order to enter a sweepstakes, would have been illegal under Missouri law because those actions would be “consideration” required to enter (the same as making a purchase or paying to enter a sweepstakes).
The new Missouri law specifically provides that maintaining a certain balance in an account, depositing money in an account, accepting a lower interest rate than comparable accounts or paying an ordinary and customary fee to maintain an account is not consideration and that savings promotion programs prepared in accordance with the Act do not constitute illegal gambling under Missouri law.
The new statute also specifies that:
a. Participants cannot be required to provide any form of consideration to obtain chances to win a prize;
b. Each entry must have an equal chance of winning a prize;
c. All banks and credit unions must comply with all of the requirements of the American Saving Promotion Act.
This type of new law has been well-received in other states. And, unlike most laws, allowing the use of prize-based savings promotion programs may create a bit of excitement that has not been associated with savings accounts in the past.
If you need any additional information about this new law, you should contact a law firm that has lawyers who are experienced in banking regulations and sweepstakes law issues.