INDIANAPOLIS (7/9/14)--Indiana recently joined the growing list of states in which credit unions have the authority to offer prize-linked savings (PLS) accounts when Gov. Mike Pence formally signed into law HB 1235.
From left: John McKenzie, Indiana Credit Union League (ICUL) president; Carrie Summers, ICUL director of advocacy; State Rep. Gail Riecken (D-Evansville); Connie Gustafson, Indiana Department of Financial Institutions general counsel; Indiana Gov. Mike Pence; Chris Beaumont, ICUL vice president of governmental affairs; Kristi Lowell, vice president of brand strategy and development, FORUM CU, Fishers, Ind.; Doug True, FORUM president/CEO and ICUL vice chair; State Rep. Woody Burton (R-Whiteland); and State Rep. Eric Koch (R-Bedford) (Indiana Credit Union League photo)
Nationally, credit unions have led the development of PLS programs by creating savings accounts and other financial literacy tools that reward members who save money by offering chances to win prizes. The programs have been developed as a way to help encourage people to save money and develop good spending and debt management habits.
In Indiana, legislative changes were required to ensure that PLS programs would be in compliance with state gaming laws. Previously, PLS programs had to be offered with a "no purchase necessary," sweepstakes-type approach. This meant that members had to be offered a chance to win prizes, even if they did not make deposits or otherwise participate in the programs.
In late 2013, State Rep. Gail Riecken (D-Evansville) approached the Indiana Credit Union League about helping her to draft legislation that would authorize credit unions to offer PLS programs without a sweepstakes approach. The legislation also was designed to clarify that credit unions' PLS programs would not fall under Indiana's gambling, lottery, promotions or charity gaming laws.
The league worked with Rep. Riecken to draft legislation that would create PLS programs that would be consistent with already-existing PLS programs in other states and those currently being offered by Indiana credit unions as sweepstakes. Although the bill did temporarily get caught up in some minor controversy related to other charity gaming legislation, HB 1235 received wide support from legislators as it moved through the process in the spring session and passed in its final form the day before session ended.
Other states that have passed PLS legislation include Connecticut, Maryland, Nebraska, North Carolina, Washington, Maine and Rhode Island. New York has passed a bill that is currently awaiting the signature of Gov. Andrew Cuomo.