Kansas Senate measure allows prize-linked savings accounts

The Kansas Senate sits in session, Tuesday, Feb. 23, 2016, at the Statehouse in Topeka.

? The Kansas Senate has approved a measure that allows for savings accounts that offer raffle-like winnings to a certain number of depositors.

Prize-linked accounts are already legal in 16 other states. Depending on how a program is set up, random winners could receive a few hundred dollars, or even a few thousand, while not risking any of their principal deposit, The Wichita Eagle reported.

It’s unclear how the raffles would be set up in Kansas. The current legislation would leave that up to individual banks and credit unions and would call on the state bank commissioner and credit union administrator to set the rules, while following some general guidelines under state law.

The legislation approved by the Senate 40-0 on Tuesday now heads to the House.

Sen. Rick Wilborn, R-McPherson, Senate Majority Leader Terry Bruce, R-Hutchinson, and Sen. Elaine Bowers, R-Concordia, co-sponsored the measure.

“This is an intriguing way to try to entice people to save,” Bowers said. “In the early years of our business, a down payment for buying a vehicle was important, and more people had savings accounts, but not so much now.”

Solana Rice of the Corporation for Enterprise Development, a national nonprofit organization, said prize-linked accounts are about getting them to put something away regularly.

“About 44 percent of U.S. households don’t have enough savings to cover three months of expenses should they lose their income,” Rice said. “Millions of families are living in liquid asset poverty, and what we’ve seen is that prize-linked savings accounts are a great way to help low-income people build savings.”