You’ve Got To Be In It To Win It?

May 28, 2013 at 7:58 am Leave a comment

I like gambling as much as the next guy, but I have never quite understood the appeal of the state lottery.  When I compare my chances of winning to the taxes I already pay to the great Empire State, not to mention my local school district, I simply don’t like the idea of paying more money to the public fisk than I already do.  If you look at the statistics, there’s plenty of people who don’t share my hesitation.  Almost $60 billion is spent on lottery tickets each year by Americans and I would bet you that lotteries have a disproportionately negative impact on poor Americans.  In fact, the problem is that some of the people most interested in participating in the lottery are those persons who can least afford to.  For example, according to some research, households that make less than $12,400 annually spend 5% of their income on lotteries.  This is money that won’t be put away for a rainy day, a new home or a college education.  Which is why I’ve always had a soft spot for an idea started in Michigan which allows banks and credit unions to raffle off prizes to individuals who open savings accounts.  It’s a great idea — people get to experience the thrill of a lottery but when it is over they haven’t lost a dollar and they have more than a dream to show for their investment.

Legislation to be acted on by the New York State Banks Committee this week, S.5145 (Lanza), would authorize banks and credit unions to run prize-linked savings programs.  Such programs cannot be run without amendments to state law because, with very few exceptions such as the state lottery, it is illegal to make someone pay money to join a raffle.  Incidentally this is why you always hear McDonald’s explain that no purchase is necessary for their giveaways.  Now, are prize-linked savings programs a panacea for savings in either the state or the country?  Of course not, but every person who gets educated as to the value of savings is a person more likely to take the basic steps necessary to move up the financial ladder is this country.

Interchange Exemption Working For Credit Unions

This one goes into the “don’t shoot the messenger” category.  Late last week the Federal Reserve Board released a report concluding that the exemption from the interchange fee cap given to financial institutions with $10 billion or less in assets is working as intended.  According to its survey, these institutions received interchange fee revenue of $0.43 per transaction in 2012.  In addition, there is very little evidence that smaller issuers of debit cards are being discriminated against.  CUNA and NAFCU were quick to question the results.  Let’s face it, we won’t really know the impact of the interchange fee cap on credit unions for a few more years.

Entry filed under: Advocacy, New York State, Regulatory. Tags: , , .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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