PRIA, Government Policy, Made Personal

Summary

National banks must not deal in lottery tickets or in bets that are used instead of a lottery. They also must not announce, advertise, or publicize a lottery or the identity of any participant or winner. Banks may not let anyone use any part of a bank office for those banned activities. They also must not let the public have direct access from a bank to a place where those banned activities happen. Key terms: "deal in" means making, taking, buying, selling, redeeming, or collecting. "Lottery" means an arrangement (other than a savings promotion raffle) where three or more people put up money or credit hoping some will win more than they put in, with winners picked by random choice, a game or contest, or by tabulating event results. "Lottery ticket" means any right or record that shows a chance to win. "Savings promotion raffle" means a contest where the only cost to enter is depositing money into a savings account, each entry has an equal chance, and it is subject to regulator rules. Banks may still accept deposits, cash checks, or provide other normal services to a State that runs a lottery or its officials. The Comptroller of the Currency must make rules to enforce these limits and prevent people from getting around them.

Title 12, §25a

Banks and Banking, Source: USLM XML via OLRC

(a)Prohibited activities

A national bank may not—

(1)deal in lottery tickets;

(2)deal in bets used as a means or substitute for participation in a lottery;

(3)announce, advertise, or publicize the existence of any lottery;

(4)announce, advertise, or publicize the existence or identity of any participant or winner, as such, in a lottery.

(b)Use of banking premises prohibited

A national bank may not permit—

(1)the use of any part of any of its banking offices by any person for any purpose forbidden to the bank under subsection (a), or

(2)direct access by the public from any of its banking offices to any premises used by any person for any purpose forbidden to the bank under subsection (a).

(c)Definitions

As used in this section

(1)

(2)The term “lottery” includes any arrangement, other than a savings promotion raffle, whereby three or more persons (the “participants”) advance money or credit to another in exchange for the possibility or expectation that one or more but not all of the participants (the “winners”) will receive by reason of their advances more than the amounts they have advanced, the identity of the winners being determined by any means which includes—

(A)a random selection;

(B)a game, race, or contest; or

(C)any record or tabulation of the result of one or more events in which any participant has no interest except for its bearing upon the possibility that he may become a winner.

(3)The term “lottery ticket” includes any right, privilege, or possibility (and any ticket, receipt, record, or other evidence of any such right, privilege, or possibility) of becoming a winner in a lottery.

(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 5481 of this title).

(d)Lawful banking services connected with operation of lotteries

Nothing contained in this section prohibits a national bank from accepting deposits or cashing or otherwise handling checks or other negotiable instruments, or performing other lawful banking services for a State operating a lottery, or for an officer or employee of that State who is charged with the administration of the lottery.

(e)Regulations; enforcement

The Comptroller of the Currency shall issue such regulations as may be necessary to the strict enforcement of this section and the prevention of evasions thereof.

Notes & Related Subsidiaries

Editorial Notes

Amendments

2014—Subsec. (c)(2). Pub. L. 113–251, § 3(a)(1), inserted “, other than a savings promotion raffle,” before “whereby” in introductory provisions. Subsec. (c)(4). Pub. L. 113–251, § 3(a)(2), added par. (4).

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 90–203, § 6, Dec. 15, 1967, 81 Stat. 611, provided that: “The

Amendments

made by this Act [adding this section, section 339, 1730c, and 1829a of this title, and section 1306 of Title 18, Crimes and Criminal Procedure] shall take effect on April 1, 1968.” Findings Pub. L. 113–251, § 2, Dec. 18, 2014, 128 Stat. 2888, provided that: “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.”

§25a Participation by National Banks in Lotteries and Related Activities

Summary

Title 12, §25a

Notes & Related Subsidiaries

Editorial Notes

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Amendments

Citations & Metadata