Federal Banking Law that prohibit banks from engaging in a lottery, was revised via the American Savings Promotion Act of 2014 to include that the term lottery does not include “savings promotional raffle”, as codified under law (see applicable law for your banking agency).

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 1002 of the Consumer Financial Protection Act of 2010 (12 U.S.C. 5481).

Consideration: Some interpretations state because the customer is paying “a thing of value” for consideration of a prize it is a lottery.

If the bank allows noncustomers to enter also, and no “purchase is necessary” it may no longer be considered a lottery. Consult your bank’s attorney and consider State law (state law must also allow for this type of activity).

Also be sure that the bank fully discloses any rules for the contest. Additional considerations include federal compliance regulations e.g., Regulation DD which addresses disclosing any minimum deposit amount.

Note: States and local municipalities may have their own rules regarding lotteries, contests and sweepstakes. Contact your appropriate authority for additional guidance.

Reference: OCC 12 USC 25a; FED Section 9a of Federal Reserve Act; FDIC section 20 of Federal Deposit Insurance Act. See also: Consumer Financial Protection Act of 2010 Section 1002 “definitions” for prudential regulator; The American Savings Promotion Act of 2014 (PUBLIC LAW 113–251); and Regulation DD