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Iowa CUs ask state legislature to allow prize-linked savings
DES MOINES, Iowa (3/25/11)--Iowa credit unions have put forth a proposal in the state legislature to allow credit unions and banks to offer saving accounts linked to prize drawings. Despite opposition from the Iowa Bankers Association, the legislation--Senate File 490--passed the Iowa Senate Tuesday by a 30 to 20 vote and moves to the Iowa state House for approval (The Des Moines Register March 21). Consumers’ need to find innovative ways to save has never been more pressing, Patrick S. Jury, president of the Iowa Credit Union League, said in a statement, the paper reported. Credit unions need to change their traditional ways of thinking to change consumer behavior, he added. The state bankers have criticized the effort to increase consumer savings by saying they don’t think the possibility of winning a prize should be the basis for encouraging consumers to make decisions about how they are going to save, an Iowa Bankers Association spokesperson, told the newspaper. Iowa credit unions want to start their program based on a similar one in Michigan in which members who open a “Save to Win” account have their name enter into a drawing for monthly cash prizes between $100 and $1,000. Then, once a year, a drawing is held for a $100,000 grand prize. Participants in the program are allowed to withdraw from the account once a year--but two withdrawals disqualifies them from being in the raffle, Justin Hupfer, league vice president of government affairs, told the paper. Prize money generally comes from credit unions’ operating budgets, Hupfer added. To read, the article, use the link.
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