Wisconsin debuts prize-linked savings for credit unions
Wisconsin is the latest state to launch prize-linked savings, and the Wisconsin Credit Union League is urging CUs there to take part.
According to Tara J. Krejcarek, VP of strategic partnerships at the league, the program, known as Saver’s Sweepstakes, was modeled on the WINcentive program in Minnesota and developed in partnership with the Minnesota Credit Union Network.
The Wisconsin program rewards participating credit union members in Wisconsin and Minnesota for saving by automatically entering them to win cash jackpots. The league said annual prize pools are now expected to be “in the five-figure range or larger” as more credit unions take part.
Krejcarek explained that the statutes allowing for prize-linked savings in Minnesota and Wisconsin are “quite similar,” and since the league developed Saver’s Sweepstakes in conjunction with MNCUN, Wisconsin CUs can offer Saver's Sweepstakes accounts to consumers living in either Wisconsin or Minnesota.
Prize-linked savings accounts pay dividends to consumers who use them while automatically entering them in monthly, quarterly and annual drawings for cash and prizes. Each saver earns one entry into the monthly and quarterly sweepstakes for every $25 in month-over-month balance increases, up to six entries per month. Participating Wisconsin credit unions can also offer their own members-only prize opportunities, if they wish.
“This is a tremendous incentive for more Wisconsin consumers to choose credit unions,” Brett Thompson, president and CEO of the Wisconsin Credit Union League, said in a statement. “Credit unions’ activism recently passed legislation to bring prize-linked savings opportunities to Wisconsin, and now our effort is about to pay off – literally – for Wisconsinites and credit unions. Every time a winner is announced or collects a prize – hundreds of times each year – all credit unions gain media attention and opportunities to grow membership and member loyalty through their own marketing channels. Because savers don’t ‘pay’ for chances to win – as they would with lotteries – and credit unions grow from the continual exposure, it’s a no-lose proposition for all.”
Prize-linked savings for credit unions was first developed by the Michigan Credit Union League (and its Save to Win initiative) but has since expanded to states across the country. While Save to Win remains the largest prize-linked savings program in the country, WINcentive also operates in Louisiana and Delaware, in addition to Minnesota.
According to the Wisconsin league, more than $130 million has been saved in 30,000 credit union prize-linked savings accounts in 13 states since 2009. Almost 90 percent of those savers were “financially vulnerable,” but saved more than $2,400, on average.
Approximately two dozen states currently have legislation enacted that permits prize-linked savings, while other states have bills in the works.
“Wisconsin credit unions’ working together will establish the program’s credibility and create synergy that will boost perception and interest, ensuring a Wisconsin [prize-linked savings] program that sustains a long-term visibility and growth opportunity for credit unions while improving members’ financial health – fulfilling credit unions’ statutory mission,” added Thompson.