The Iowa House has killed a bill that would allow prize-linked savings raffles such as Save to Win. And the Iowa Credit Union League is blaming banks.
"The banks have killed a bill that we believe would help people save and manage their financial futures," Justin Hupfer, vice president of government affairs for the Iowa Credit Union League, told the Des Moines Register.
The IOwa league ran newspaper ads last week asking Iowans to call their state representatives to get the legislation passed. The ads attacked Iowa banks for opposing the bill.
"It's pretty simple: They don't think you should be rewarded for saving more," the ad said. "The bankers' greed to increase profits and limit all competition is getting in the way of common sense efforts to help Iowa families."
Iowa's House State Government Committee approved the bill but it was not put on the House's unfinished-business calendar.
"There did not appear to be support in the House for this measure," Majority Leader Linda Upmeyer said. "Personally, I found it difficult to reconcile that type of system with what we're working towards - financial literacy and increasing personal savings."
The Iowa Bankers Association submitted a letter to the paper saying that using raffles as an incentive for saving is "counterintuitive to our state's financial literacy efforts."
"Unlike most Iowans, credit unions are exempt from paying state and federal income tax. Offering a $100,000 raffle prize to one lucky winner is not an appropriate use of the credit unions' tax exemption," the bankers group said. "The solution to a better financial future starts by empowering Iowans with financial education, not by offering a game of chance."
Hupfer said the credit unions will try again next year to get House approval of the legislation.
"The banks have killed a bill that we believe would help people save and manage their financial futures," said Justin Hupfer, vice president of government affairs for the Iowa Credit Union League.
Some other states, including Washington and North Carolina, are also considering bills that would allow programs such as Save to Win.