BERGEN COUNTY, N.J. — Encouraging people to save money for the future is the spirit behind new legislation recently signed into law.
Legislation sponsored by Assembly Democrats Herb Conaway (D-Burlington), Troy Singleton (D-Burlington), Tim Eustace (D-Bergen/Passaic) and Craig Coughlin (D-Middlesex) allows banks to conduct promotions that encourage consumers to open savings accounts.
The new law (formerly A-3868) authorizes state-chartered banks, savings banks, savings and loans and credit unions to conduct savings promotions. The law defines a “savings promotion” as “…a raffle in which the sole consideration required for a chance of winning designated prizes is the deposit of a minimum specified amount of money in a savings account or other savings program.”
The sponsors note the intent of the law is to encourage residents to utilize savings accounts by allowing financial institutions in New Jersey to reward their customers for depositing money with a chance to win prizes.
“Whether they’re looking to fund a home, a car or simply a rainy day account, all New Jersey residents can benefit from saving,” said Eustace. “By facilitating these promotions, this legislation will help emphasize the importance of savings accounts.”
In addition to incentivizing saving, the law also protects consumers by requiring participating financial institutions to:
- conduct the promotion in a manner so as to ensure that each entry has an equal chance of winning the designed prize;
- fully disclose the terms and conditions of the promotion to each of its account holders;
- maintain records sufficient to facilitate an audit of the promotion;
- ensure that only account holders 18 years of age and older are permitted to participate in the promotion;
- not require any consideration to participate in the promotion other than the requirement that the participant deposit money into a savings account or other savings program;
- and offer an interest rate and charge fees on any qualifying account that are approximately the same as those on a comparable non-qualifying account.
The new law takes effect on July 17, 2016.
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