Governor Jerry Brown of California has signed SB 1055 into law, making it the 29th state to pass prize-linked savings legislation. This measure authorizes state- and federally-chartered banks and credit unions located in California to offer prize-linked savings accounts to their depositors.
Commonwealth has spent well over a decade researching and exploring strategies that motivate people towards positive financial behavior, with much of our work focused on addressing the nation’s savings crisis. Prize-linked savings accounts provide incentives for people to save more, making the act of saving fun while also encouraging a habit that will help California families become more secure and resilient in the face of financial shocks.
Financial institutions see benefits when introducing these products as well. They have proven to increase deposits at institutions by attracting first-time savers, generate positive earned media from local and national outlets, and make customers more excited about their institution and more likely to use other products. SB 1055 allows financial institutions located in California to create innovative and unique prize-linked savings products that can help them connect more deeply with their customers as they celebrate their winnings and move along the path to financial security.
Commonwealth has helped states across the country pass legislation allowing for prize-linked savings products, and California, as the largest state in the country by population, is a major step towards our goal of reaching all fifty states. If you are affiliated with a bank or credit union in California and want to learn more about how your institution can launch a prize-linked savings product, please contact us. You can learn more about prize-linked savings policy and progress on our website.