[Pages H7504-H7506]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

AMERICAN SAVINGS PROMOTION ACT

Mr. FITZPATRICK. Mr. Speaker, I move to suspend the rules and pass
the bill (H.R. 3374) to provide for the use of savings promotion raffle
products by financial institutions to encourage savings, and for other
purposes, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:

H.R. 3374

Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ``American Savings Promotion
Act''.

SEC. 2. FINDINGS.

Congress finds that--
(1) the annual savings rate in the United States was 4.1
percent in 2012;
(2) more than 40 percent of American households lack the
savings to cover basic expenses for 3 months, if an
unexpected event leads to a loss of stable income;
(3) personal savings provide Americans with the financial
resources to meet future needs, including higher education
and homeownership, while also providing a safety net to
weather unexpected financial shocks;
(4) prize-linked savings products are typical savings
products offered by financial institutions, like savings
accounts, certificates of deposit, and savings bonds, with
the added feature of offering chances to win prizes based on
deposit activity;
(5) the State of Michigan was the first State to allow
credit unions to offer prize-linked savings products, and in
2009 launched the first large-scale prize-linked savings
product in the United States;
(6) the States of Connecticut, Michigan, Maine, Maryland,
Nebraska, North Carolina, Rhode Island, and Washington all
have laws that allow financial institutions to offer prize-
linked savings products;
(7) in the States of Michigan and Nebraska, more than
42,000 individuals have opened prize-linked savings accounts
and saved more than $72,000,000;
(8) prize-linked savings products have been shown to
successfully attract non-savers, the asset poor, and low-to-
moderate income groups, providing individuals with a new tool
to build personal savings; and
(9) encouraging personal savings is in the national
interest of the United States.

SEC. 3. AMENDMENT TO DEFINITIONS OF ``LOTTERY''.

(a) National Banks.--Section 5136B(c) of the Revised
Statutes of the United States (12 U.S.C. 25a(c)) is amended--
(1) in paragraph (2), by inserting ``, other than a savings
promotion raffle,'' before ``whereby''; and
(2) by adding at the end the following:
``(4) The term `savings promotion raffle' means a contest
in which the sole consideration required for a chance of
winning designated prizes is obtained by the deposit of a
specified amount of money in a savings account or other
savings program, where each ticket or entry has an equal
chance of being drawn, such contest being subject to
regulations that may from time to time be promulgated by the
appropriate prudential regulator (as defined in section 1002
of the Consumer Financial Protection Act of 2010 (12 U.S.C.
5481)).''.
(b) Federal Reserve Banks.--Section 9A(c) of the Federal
Reserve Act (12 U.S.C. 339(c)) is amended--
(1) in paragraph (2), by inserting ``, other than a savings
promotion raffle,'' before ``whereby''; and
(2) by adding at the end the following:
``(4) The term `savings promotion raffle' means a contest
in which the sole consideration required for a chance of
winning designated prizes is obtained by the deposit of a
specified amount of money in a savings account or other
savings program, where each ticket or entry has an equal
chance of being drawn, such contest being subject to
regulations that may from time to time be promulgated by the
appropriate prudential regulator (as defined in section 1002
of the Consumer Financial Protection Act of 2010 (12 U.S.C.
5481)).''.
(c) Insured Depository Institutions.--Section 20(c) of the
Federal Deposit Insurance Act (12 U.S.C. 1829a(c)) is
amended--
(1) in paragraph (2), by inserting ``, other than a savings
promotion raffle,'' before ``whereby''; and
(2) by adding at the end the following:
``(4) The term `savings promotion raffle' means a contest
in which the sole consideration required for a chance of
winning designated prizes is obtained by the deposit of a
specified amount of money in a savings account or other
savings program, where each ticket or entry has an equal
chance of being drawn, such contest being subject to
regulations that may from time to time be promulgated by the
appropriate prudential regulator (as defined in section 1002
of the Consumer Financial Protection Act of 2010 (12 U.S.C.
5481)).''.
(d) Federal Savings and Loan Associations.--Section 4(e)(3)
of the Home Owners' Loan Act (12 U.S.C. 1463(e)(3)) is
amended--
(1) in subparagraph (B), by inserting ``, other than a
savings promotion raffle,'' after ``arrangement''; and
(2) by adding at the end the following:
``(D) Savings promotion raffle.--The term `savings
promotion raffle' means a contest in which the sole
consideration required for a chance of winning designated
prizes is obtained by the deposit of a specified amount of
money in a savings account or other savings program, where
each ticket or entry has an equal chance of being drawn, such
contest being subject to regulations that may from time to
time be promulgated by the appropriate prudential regulator
(as defined in section 1002 of the Consumer Financial
Protection Act of 2010 (12 U.S.C. 5481)).''.

SEC. 4. CRIMINAL PROVISIONS.

(a) In General.--Chapter 61 of title 18, United States
Code, is amended by adding at the end the following:

``Sec. 1308. Limitation of applicability

``(a) Limitation of Applicability.--Sections 1301, 1302,
1303, 1304, and 1306 shall not apply--
``(1) to a savings promotion raffle conducted by an insured
depository institution or an insured credit union; or
``(2) to any activity conducted in connection with any such
savings promotion raffle, including, without limitation, to
the--
``(A) transmission of any advertisement, list of prizes, or
other information concerning the savings promotion raffle;
``(B) offering, facilitation, and acceptance of deposits,
withdrawals, or other transactions in connection with the
savings promotion raffle;
``(C) transmission of any information relating to the
savings promotion raffle, including account balance and
transaction information; and
``(D) deposit or transmission of prizes awarded in the
savings promotion raffle as well as notification or
publication thereof.
``(b) Definitions.--In this section--
``(1) the term `insured credit union' shall have the
meaning given the term in section 101 of the Federal Credit
Union Act (12 U.S.C. 1752);
``(2) the term `insured depository institution' shall have
the meaning given the term in section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813); and

[[Page H7505]]

``(3) the term `savings promotion raffle' means a contest
in which the sole consideration required for a chance of
winning designated prizes is obtained by the deposit of a
specified amount of money in a savings account or other
savings program, where each ticket or entry has an equal
chance of being drawn, such contest being subject to
regulations that may from time to time be promulgated by the
appropriate prudential regulator (as defined in section 1002
of the Consumer Financial Protection Act of 2010 (12 U.S.C.
5481)).''.
(b) Technical and Conforming Amendment.--The table of
sections for chapter 61 of title 18, United States Code, is
amended by adding after the item relating to section 1307 the
following:

``1308. Limitation of applicability.''.

SEC. 5. RACKETEERING.

Chapter 95 of title 18, United States Code, is amended--
(1) in section 1952, by adding at the end the following:
``(e)(1) This section shall not apply to a savings
promotion raffle conducted by an insured depository
institution or an insured credit union.
``(2) In this subsection--
``(A) the term `insured credit union' shall have the
meaning given the term in section 101 of the Federal Credit
Union Act (12 U.S.C. 1752);
``(B) the term `insured depository institution' shall have
the meaning given the term in section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813); and
``(C) the term `savings promotion raffle' means a contest
in which the sole consideration required for a chance of
winning designated prizes is obtained by the deposit of a
specified amount of money in a savings account or other
savings program, where each ticket or entry has an equal
chance of being drawn, such contest being subject to
regulations that may from time to time be promulgated by the
appropriate prudential regulator (as defined in section 1002
of the Consumer Financial Protection Act of 2010 (12 U.S.C.
5481)).'';
(2) in section 1953--
(A) in subsection (b), by striking ``or (5)'' and inserting
``(5) equipment, tickets, or materials used or designed for
use in a savings promotion raffle operated by an insured
depository institution or an insured credit union, or (6)'';
and
(B) by striking subsections (d) and (e) and inserting the
following:
``(d) For purposes of this section--
``(1) the term `foreign country' means any empire, country,
dominion, colony, or protectorate, or any subdivision thereof
(other than the United States, its territories or
possessions);
``(2) the term `insured credit union' shall have the
meaning given the term in section 101 of the Federal Credit
Union Act (12 U.S.C. 1752);
``(3) the term `insured depository institution' shall have
the meaning given the term in section 3 of the Federal
Deposit Insurance Act (12 U.S.C. 1813);
``(4) the term `lottery'--
``(A) means the pooling of proceeds derived from the sale
of tickets or chances and allotting those proceeds or parts
thereof by chance to one or more chance takers or ticket
purchasers; and
``(B) does not include the placing or accepting of bets or
wagers on sporting events or contests;
``(5) the term `savings promotion raffle' means a contest
in which the sole consideration required for a chance of
winning designated prizes is obtained by the deposit of a
specified amount of money in a savings account or other
savings program, where each ticket or entry has an equal
chance of being drawn, such contest being subject to
regulations that may from time to time be promulgated by the
appropriate prudential regulator (as defined in section 1002
of the Consumer Financial Protection Act of 2010 (12 U.S.C.
5481)); and
``(6) the term `State' means a State of the United States,
the District of Columbia, the Commonwealth of Puerto Rico, or
any territory or possession of the United States.''; and
(3) in section 1955--
(A) in subsection (b)--
(i) by redesignating paragraph (2) as paragraph (4);
(ii) by redesignating paragraph (3) as paragraph (6);
(iii) by inserting after paragraph (1) the following:
``(2) `insured credit union' shall have the meaning given
the term in section 101 of the Federal Credit Union Act (12
U.S.C. 1752).
``(3) `insured depository institution' shall have the
meaning given the term in section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813).''; and
(iv) by inserting after paragraph (4), as redesignated, the
following:
``(5) `savings promotion raffle' means a contest in which
the sole consideration required for a chance of winning
designated prizes is obtained by the deposit of a specified
amount of money in a savings account or other savings
program, where each ticket or entry has an equal chance of
being drawn, such contest being subject to regulations that
may from time to time be promulgated by the appropriate
prudential regulator (as defined in section 1002 of the
Consumer Financial Protection Act of 2010 (12 U.S.C.
5481)).''; and
(B) in subsection (e)--
(i) by striking ``shall not apply to any bingo'' and
inserting the following: ``shall not apply to--
``(1) any bingo'';
(ii) by striking the period and inserting ``; or''; and
(iii) by adding at the end the following:
``(2) any savings promotion raffle.''.

The SPEAKER pro tempore (Mr. Bentivolio). Pursuant to the rule, the
gentleman from Pennsylvania (Mr. Fitzpatrick) and the gentlewoman from
California (Ms. Waters) each will control 20 minutes.
The Chair recognizes the gentleman from Pennsylvania.

General Leave

Mr. FITZPATRICK. Mr. Speaker, I ask unanimous consent that all
Members have 5 legislative days within which to revise and extend their
remarks and submit extraneous materials for the Record on H.R. 3374, as
amended, and currently under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Pennsylvania?
There was no objection.
Mr. FITZPATRICK. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I would like to thank Mr. Kilmer, Mr. Cotton, and Ms.
Tsongas for their efforts in drafting the legislation that is before us
this evening.
The American Savings Promotion Act is bipartisan legislation that
would remove Federal barriers and allow financial institutions to offer
savings promotion raffles.
Studies show that Americans are not saving enough, whether for an
emergency or for their retirement. This lack of savings is more
pronounced among those with lower incomes. H.R. 3374 seeks to reverse
this trend and encourage savings by offering depositors chances to win
prizes based on their deposit activity.
This legislation would simply amend Federal law to allow depositors
to enter into a lottery in lieu of accruing interest, with the number
of raffle tickets based on the size of their deposit.
The American Savings Promotion Act is a commonsense bill that will
provide consumers greater access to the financial services they want
and need. Allowing financial institutions the ability to provide
innovative products is a simple way to encourage consumers to open
savings accounts, incentivize saving, and foster healthier financial
habits.
Mr. Speaker, I urge adoption of this bipartisan legislation, and I
reserve the balance of my time.
Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 3374, the American Savings
Promotion Act, which has been offered by my colleague from Washington
(Mr. Kilmer). This bill is an example of the innovation Democrats bring
to addressing the concerns of the chronically unbanked.
Building on the success of credit unions offering such programs, this
bill enables banks to offer similar products, vastly increasing the
reach of this creative savings product.
Prize-linked savings accounts encourage customers to set aside
savings by combining the more mundane task of setting aside money with
the excitement of playing the lottery. Customers are always eligible to
withdraw the principal of their savings account but forego accrued
interest for the chance of winning all of the interest of participants
in the program.
Such programs have been offered in South Africa, resulting in more
than $200 million being set aside in savings accounts by more than
750,000 individuals who had largely not set up a bank account. In
Washington State, credit unions that offer such accounts have found
that these accounts are helping to build an ethic of frugality.
Today, credit unions are permitted to offer such programs if State
law permits them, which includes four States: Washington, Michigan,
Nebraska, and North Carolina. However, even though these States permit
prize-linked savings accounts, Federal banking laws prevent banks from
offering them because of a decades-old prohibition on participation in
a lottery.

{time} 2015

Mr. Kilmer's bill retains the general prohibition against lotteries
but permits banks to offer prize-linked savings if the bank's State
also allows them.

[[Page H7506]]

It is not a secret that this country does not save enough, that we
are not preparing for the unexpected or even for how we will afford
college tuition expenses or retirement. We also know that, once someone
begins to pile on debt, it can be nearly impossible to dig out. Mr.
Kilmer's bill enables our constituents to say ``no'' to debt by
encouraging good savings habits.
I reserve the balance of my time.
Mr. FITZPATRICK. Mr. Speaker, I continue to reserve the balance of my
time.
Ms. WATERS. Mr. Speaker, I yield such time as he may consume to the
gentleman from Washington (Mr. Kilmer), the author of the bill.
Mr. KILMER. I thank the gentlewoman for yielding.
I would also like to thank Chair Capito and Ranking Member Meeks, as
well as Chairman Hensarling and Ranking Member Waters, for their
efforts to move the American Savings Promotion Act to the floor of the
House today.
Mr. Speaker, my legislation would remove Federal barriers that today
prevent some financial institutions from being able to offer innovative
financial products, known as prize-linked savings accounts. These safe,
regulated financial products are designed to make savings fun. The more
you save, the more chances you have to win. As a Dire Straits fan, I
called this idea the ``Money for Nothing'' concept. If you make
deposits, you get more chances to win, and even if you don't win, you
get to keep the money you saved.
Many families understand the importance of saving money to help them
manage expected costs like college or retirement and unexpected costs
that they might face, whether it is a trip to the emergency room or
repairing their cars, but we know too many Americans struggle to set
aside a little bit of cash every month. Nearly a quarter of Americans
report they wouldn't be able to come up with at least $2,000 in 30
days. Another 19 percent said they could, but they would have to begin
pawning or selling their possessions or taking out payday loans.
The idea behind prize-linked savings accounts is based on the
recognition that people are significantly motivated by rewards, and
when it comes to saving money, the idea of earning pennies on the
dollar just isn't all that attractive to a lot of folks, particularly
those who don't have a lot to save in the first place. Prize-linked
savings accounts seek to step into that gap and provide savers with a
product that keeps folks excited about saving by offering cash prizes.
The research shows that prize-linked savings accounts are actually
working to boost savings. The National Bureau of Economic Research
recently published an analysis of these accounts, finding that the data
``demonstrate clearly'' that individuals save at a higher rate when
they are offered the use of prize-linked savings accounts.
Unfortunately, under Federal law, only some financial institutions are
able to offer these products.
My legislation, which I am proud to have worked on with
Representative Tom Cotton, alongside Senators Jerry Moran and Sherrod
Brown, would clear away the Federal obstacles so that more financial
institutions can offer these products. It accomplishes this without
establishing a new government program, without spending scarce Federal
dollars, and without preempting State laws.
Over the past 4 years, an estimated 50,000 account holders have saved
more than $94 million using prize-linked savings accounts. Even if
those members don't win a big cash prize, they are strengthening their
financial cushions to withstand whatever life throws at them while
developing a habit of saving.
Mr. Speaker, I urge my colleagues to support the American Savings
Promotion Act.
Ms. WATERS. Mr. Speaker, I yield back the balance of my time.
Mr. FITZPATRICK. Mr. Speaker, I would just like to thank
Representative Cotton of Arkansas for his leadership on this bill and
for the leadership of his cosponsors. I urge my colleagues to pass the
bill as submitted.
I yield back the balance of my time.
Mr. FITZPATRICK. Mr. Speaker, I submit the following correspondence
between the Financial Services Committee and the Judiciary Committee on
H.R. 3374, as amended.

House of Representatives,

Committee on the Judiciary,

Washington, DC, September 12, 2014.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services, Washington, DC.
Dear Chairman Hensarling, I am writing concerning H.R.
3374, the ``American Savings Promotion Act,'' which was
referred primarily to your Committee, and additionally to the
Committee on the Judiciary.
As a result of your having consulted with the Judiciary
Committee on the provisions in our jurisdiction and in order
to expedite the House's consideration of H.R. 3374, I agree
to discharge our Committee from further consideration of this
bill so that it may proceed expeditiously to the House floor
for consideration. The Judiciary Committee takes this action
with our mutual understanding that by foregoing consideration
of H.R. 3374 at this time, we do not waive any jurisdiction
over the subject matter contained in this or similar
legislation, and that our Committee will be appropriately
consulted and involved as the bill or similar legislation
moves forward so that we may address any remaining issues in
our jurisdiction. Our Committee also reserves the right to
seek appointment of an appropriate number of conferees to any
House-Senate conference involving this or similar
legislation, and asks that you support any such request.
I would appreciate your response to this letter confirming
this understanding, and would request that you include a copy
of this letter and your response in the Congressional Record
during the floor consideration of this bill.
Sincerely,
Bob Goodlatte,
Chairman.
House of Representatives,

Committee on Financial Services,

Washington, DC, September 12, 2014.
Hon. Bob Goodlatte,
Chairman, Committee on the Judiciary, Washington, DC.
Dear Chairman Goodlatte: Thank you for your letter of even
date herewith regarding H.R. 3374, the American Savings
Promotion Act.
I am most appreciative of your decision to forego
consideration of H.R. 3374 so that it may move expeditiously
to the House floor. I acknowledge that although you are
waiving formal consideration of the bill, the Committee on
the Judiciary is in no way waiving its jurisdiction over any
subject matter contained in the bill that falls within its
jurisdiction.
In addition, if a conference is necessary on this
legislation, I will support any request that your committee
be represented therein.
Finally, I shall be pleased to include your letter and this
letter in the Congressional Record during floor consideration
of H.R. 3374.
Sincerely,
Jeb Hensarling,
Chairman.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Pennsylvania (Mr. Fitzpatrick) that the House suspend
the rules and pass the bill, H.R. 3374, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.

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