[Congressional Record Volume 160, Number 131 (Monday, September 15, 2014)]
[House]
[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.

                          ____________________