Authorizing savings promotion drawings under specified conditions, and making penalties applicable

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 and which receives money for deposit. 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 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 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; the financial institution does not charge a fee to a participant withdrawing money from the participant’s promotion account 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 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.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.