Senate Study Bill 1124 - IntroducedA Bill ForAn Act 1authorizing savings promotion drawings under specified
2conditions, and making penalties applicable.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1   Section 1.  Section 99B.1, Code 2021, is amended by adding
2the following new subsection:
3   NEW SUBSECTION.  15A.  “Financial institution” means a state
4or federally chartered credit union as defined in 533.102 or
5a state or federally chartered bank as defined in section
6524.103, which is located in this state.
7   Sec. 2.  Section 99B.1, subsection 27, Code 2021, is amended
8to read as follows:
   927.  “Raffle” means a lottery in which each participant buys
10an entry for a chance at a prize with the winner determined by
11a random method and the winner is not required to be present to
12win. “Raffle” does not include a slot machine. “Raffle” does
13not include a savings promotion drawing.

14   Sec. 3.  Section 99B.1, Code 2021, is amended by adding the
15following new subsection:
16   NEW SUBSECTION.  28.  “Savings promotion drawing” means a
17drawing conducted by a financial institution or a group of
18financial institutions in which a designated prize or prizes
19may be won by the deposit of a specified amount of money in a
20savings account, time deposit, or other savings program offered
21through that financial institution or group of financial
22institutions.
23   Sec. 4.  NEW SECTION.  99B.63  Savings promotion drawings.
   241.  For purposes of this section, “participant” means a
25person who is at least eighteen years of age and who has opened
26a savings promotion drawing account at a financial institution.
   272.  A savings promotion drawing may lawfully be conducted
28by a financial institution or group of financial institutions
29without a license under this chapter if all of the following
30conditions are met:
   31a.  The savings promotion drawing includes the distribution
32of the financial institution’s savings promotion drawing rules
33to all participants in the savings promotion drawing.
   34b.  The savings promotion drawing is open to all participants
35as provided in the rules established for the savings promotion
-1-1drawing by the financial institution conducting the savings
2promotion drawing. A savings promotion drawing shall not be
3open to members of the public who are not participants pursuant
4to the savings promotion drawing rules of the financial
5institution. A participant shall not submit more than ten
6entries for participation in a savings promotion drawing in a
7calendar month.
   8c.  The financial institution conducting the savings
9promotion drawing maintains records regarding the savings
10promotion drawing and the number of participants.
   11d.  The savings promotion drawing is conducted in a fair and
12honest manner. The financial institution shall not conduct
13a savings promotion drawing in a manner that jeopardizes the
14financial institution’s safety and financial soundness or
15misleads its participants.
   163.  a.  A financial institution shall provide an annual
17report to the credit union division of the department of
18commerce or banking division of the department of commerce, as
19applicable, for each year in which the financial institution
20conducts a savings promotion drawing. If multiple financial
21institutions combine efforts to conduct one more collective
22savings promotion drawings between participants, the
23participating financial institutions may file a joint annual
24report.
   25b.  The annual report shall include the number of savings
26promotion drawings conducted during the year, the date the
27savings promotion drawings were conducted, a description and
28value of the prize or prizes offered, the names and addresses
29of participants who won prizes, a copy of the savings promotion
30drawing rules, and the names and addresses of two witnesses to
31the savings promotion drawing.
   324.  Prizes awarded in a savings promotion drawing may be in
33cash or any other form of property. A financial institution
34shall not award a monthly prize in a savings promotion drawing
35that exceeds two hundred fifty dollars in value. A financial
-2-1institution shall not award a quarterly prize in a savings
2promotion drawing that exceeds five thousand dollars in value.
3A financial institution shall not award an annual prize in a
4savings promotion drawing that exceeds ten thousand dollars in
5value.
   65.  A financial institution or group of financial
7institutions may compensate employees of the financial
8institution, or may hire a third-party operator, to conduct a
9savings promotion drawing pursuant to this section.
10EXPLANATION
11The inclusion of this explanation does not constitute agreement with
12the explanation’s substance by the members of the general assembly.
   13This bill allows a financial institution or multiple
14financial institutions to conduct savings promotion drawings
15without a license under specified conditions.
   16The bill defines “financial institution” to mean a state or
17federally chartered credit union or bank which is located in
18Iowa. The bill defines “savings promotion drawing” to mean
19a drawing conducted by a financial institution or group of
20financial institutions in which a designated prize or prizes
21may be won by the deposit of a specified amount of money in a
22savings account, time deposit, or other savings program. The
23bill defines “participant” to mean a person who is at least 18
24years of age and who has opened a savings promotion drawing
25account at a financial institution.
   26The bill allows a financial institution or group of
27financial institutions to conduct a savings promotion drawing
28without licensure if all of the following conditions are
29met: the drawing includes the distribution of the financial
30institution’s drawing rules to all participants; the drawing
31is open to all participants as provided in the drawing rules,
32but must not be open to members of the public who are not
33participants pursuant to the drawing rules; participants
34shall not submit more than 10 entries for participation in a
35savings promotion drawing in a calendar month; the financial
-3-1institution maintains records regarding the drawing and the
2number of participants; and the drawing is conducted in a
3fair and honest manner, without jeopardizing the financial
4institution’s safety and financial soundness or misleading its
5participants.
   6The bill requires a financial institution to provide an
7annual report to the credit union division of the department of
8commerce or banking division of the department of commerce, as
9applicable, for each year in which the financial institution
10conducts a savings promotion drawing. If multiple financial
11institutions conduct a drawing, the financial institutions may
12file a joint annual report. The annual report shall include
13the number of drawings conducted during the year, the date
14the drawings were conducted, a description and value of the
15prizes offered, the names and addresses of participants who
16won prizes, a copy of the drawing rules, and the names and
17addresses of two witnesses to the drawing.
   18The bill provides that prizes awarded in a savings promotion
19drawing may be in cash or any other form of property. A
20financial institution shall not award a monthly prize in
21a savings promotion drawing that exceeds $250 in value, a
22quarterly prize that exceeds $5,000 in value, or an annual
23prize that exceeds $10,000 in value. The bill provides that a
24financial institution may compensate employees of the financial
25institution, or may hire a third-party operator, to conduct a
26drawing.
   27Under Code section 99B.4, a person who knowingly fails to
28comply with Code chapter 99B commits a serious misdemeanor. A
29serious misdemeanor is punishable by confinement for no more
30than one year and a fine of at least $430 but not more than
31$2,560.
-4-
jda/rn