HSB 57 (LSB 1274YC (2) 89)

HOUSE FILE _____ 

BY  (PROPOSED COMMITTEE ON STATE GOVERNMENT BILL BY CHAIRPERSON KAUFMANN)

A BILL FOR

An Act authorizing savings promotion drawings under specified conditions, and making penalties applicable.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 99B.1, Code 2021, is amended by adding the following new subsection:
   NEW SUBSECTION.  15A.  “Financial institution” means a state or federally chartered credit union as defined in 533.102 or a state or federally chartered bank as defined in section 524.103, which is located in this state. 
    Sec. 2.  Section 99B.1, subsection 27, Code 2021, is amended to read as follows:
   27.  “Raffle” means a lottery in which each participant buys an entry for a chance at a prize with the winner determined by a random method and the winner is not required to be present to win. “Raffle” does not include a slot machine.  “Raffle” does not include a savings promotion drawing.
    Sec. 3.  Section 99B.1, Code 2021, is amended by adding the following new subsection:
   NEW SUBSECTION.  28.  “Savings promotion drawing” means a drawing conducted by a financial institution or a group of financial institutions in which a designated prize or prizes may be won by the deposit of a specified amount of money in a savings account, time deposit, or other savings program offered through that financial institution or group of financial institutions.
    Sec. 4.  NEW SECTION.  99B.63  Savings promotion drawings.
   1.  For purposes of this section, “participant” means a person who is at least eighteen years of age and who has opened a savings promotion drawing account at a financial institution.
   2.  A savings promotion drawing may lawfully be conducted by a financial institution or group of financial institutions without a license under this chapter if all of the following conditions are met:
   a.  The savings promotion drawing includes the distribution of the financial institution’s savings promotion drawing rules to all participants in the savings promotion drawing.
   b.  The savings promotion drawing is open to all participants as provided in the rules established for the savings promotion drawing by the financial institution conducting the savings promotion drawing. A savings promotion drawing shall not be open to members of the public who are not participants pursuant to the savings promotion drawing rules of the financial institution. A participant shall not submit more than ten entries for participation in a savings promotion drawing in a calendar month.
   c.  The financial institution conducting the savings promotion drawing maintains records regarding the savings promotion drawing and the number of participants.
   d.  The savings promotion drawing is conducted in a fair and honest manner. The financial institution shall not conduct a savings promotion drawing in a manner that jeopardizes the financial institution’s safety and financial soundness or misleads its participants. 
   3.  a.  A financial institution shall provide an annual report to the credit union division of the department of commerce or banking division of the department of commerce, as applicable, for each year in which the financial institution conducts a savings promotion drawing. If multiple financial institutions combine efforts to conduct one more collective savings promotion drawings between participants, the participating financial institutions may file a joint annual report.
   b.  The annual report shall include the number of savings promotion drawings conducted during the year, the date the savings promotion drawings were conducted, a description and value of the prize or prizes offered, the names and addresses of participants who won prizes, a copy of the savings promotion drawing rules, and the names and addresses of two witnesses to the savings promotion drawing. 
   4.  Prizes awarded in a savings promotion drawing may be in cash or any other form of property. A financial institution shall not award a monthly prize in a savings promotion drawing that exceeds two hundred fifty dollars in value. A financial institution shall not award a quarterly prize in a savings promotion drawing that exceeds five thousand dollars in value. A financial institution shall not award an annual prize in a savings promotion drawing that exceeds ten thousand dollars in value.
   5.  A financial institution or group of financial institutions may compensate employees of the financial institution, or may hire a third-party operator, to conduct a savings promotion drawing pursuant to this section.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill allows a financial institution or multiple financial institutions to conduct savings promotion drawings without a license under specified conditions.
   The bill defines “financial institution” to mean a state or federally chartered credit union or bank which is located in Iowa. The bill defines “savings promotion drawing” to mean a drawing conducted by a financial institution or group of financial institutions in which a designated prize or prizes may be won by the deposit of a specified amount of money in a savings account, time deposit, or other savings program. The bill defines “participant” to mean a person who is at least 18 years of age and who has opened a savings promotion drawing account at a financial institution.
   The bill allows a financial institution or group of financial institutions to conduct a savings promotion drawing without licensure if all of the following conditions are met: the drawing includes the distribution of the financial institution’s drawing rules to all participants; the drawing is open to all participants as provided in the drawing rules, but must not be open to members of the public who are not participants pursuant to the drawing rules; participants shall not submit more than 10 entries for participation in a savings promotion drawing in a calendar month; the financial institution maintains records regarding the drawing and the number of participants; and the drawing is conducted in a fair and honest manner, without jeopardizing the financial institution’s safety and financial soundness or misleading its participants.
   The bill requires a financial institution to provide an annual report to the credit union division of the department of commerce or banking division of the department of commerce, as applicable, for each year in which the financial institution conducts a savings promotion drawing. If multiple financial institutions conduct a drawing, the financial institutions may file a joint annual report. The annual report shall include the number of drawings conducted during the year, the date the drawings were conducted, a description and value of the prizes offered, the names and addresses of participants who won prizes, a copy of the drawing rules, and the names and addresses of two witnesses to the drawing.
   The bill provides that prizes awarded in a savings promotion drawing may be in cash or any other form of property. A financial institution shall not award a monthly prize in a savings promotion drawing that exceeds $250 in value, a quarterly prize that exceeds $5,000 in value, or an annual prize that exceeds $10,000 in value. The bill provides that a financial institution may compensate employees of the financial institution, or may hire a third-party operator, to conduct a drawing.
   Under Code section 99B.4, a person who knowingly fails to comply with Code chapter 99B commits a serious misdemeanor. A serious misdemeanor is punishable by confinement for no more than one year and a fine of at least $430 but not more than $2,560.