Support Proposition 7, a Proposal to Help Texans Build Their Savings on the November Ballot

///Support Proposition 7, a Proposal to Help Texans Build Their Savings on the November Ballot

Wouldn’t it be great if you were eligible to win a cash prize just for putting money in your savings account? In next month’s election, your vote for Proposition 7 could make this a reality in Texas.  This policy proposal to encourage more Texans to save is much needed in our state and country. Over 46 percent of Americans do not have enough money to cover an unexpected $400 expense.

Proposition 7 makes savings a fun and exciting experience

The Texas Legislature approved the policy proposal (HB 471 and HJR 37), which put Proposition 7 on the November ballot. This proposal gives banks and credit unions the ability to offer chances to win cash prizes for Texans who are making deposits into a savings account. This constitutional amendment is needed because the Texas Constitution prohibits banks from awarding these types of prizes. Half the country already allows banks and credit unions to do this.

Prize-linked savings accounts are normal savings accounts with the added incentive of the chance to win a cash prize for making deposits

  • These accounts have the same fees and offer the same interest as other comparable savings accounts at the financial institution offering the account.
  • The accountholder’s savings are never at risk in the account. Their savings are maintained in the account whether or not they win a prize.

Proposition 7 will help financially insecure households build savings

  • Since 2009, over 75,000 prize-linked savings accounts have been opened nationwide with a collective savings of $175 million and average account savings of over $2,400.
  • 82 to 89 percent of prize-linked savings accountholders are financially vulnerable.
  • 49-59 percent of prize-linked savings accountholders had no emergency savings before saving in the account.

Proposition 7 will benefit financial institutions offering prize-linked savings accounts

  • Prize-linked savings helps financial intuitions acquire new customers. 10 to 15 percent of prize-linked savings account holders became members of their credit union in order to open a prize-linked savings account.
  • Prize-linked savings increases customer interest in other financial products. 62 percent of prize-linked savings account holders said that their financial institution’s prize-linked savings product has made them more interested in using other products offered by their financial institution.

Vote yes on this innovative strategy to help Texans build savings!

Learn more about Proposition 7 here. Early voting starts October 23.

Prop 7 is also supported by our partners at: 

Faith in Texas

Community Development Corporation of Brownsville

Independent Bankers Association of Texas

RAISE Texas

Dallas Women’s Foundation

Texas Impact

Brazos Valley Affordable Housing Corporation

United Way of Southern Cameron County

Lubbock Housing Finance Corporation

Texas AFL-CIO

Texas Credit Union Association

Foundation Communities

United Way of Central Texas

Brazos Valley CDC, Inc.

Laura Rosen joined the Center for Public Policy Priorities in 2010. She is a policy analyst and the coordinator of OpportunityTexas, a joint initiative of RAISE Texas and CPPP to expand household savings in Texas. Laura completed her Master of Public Policy from the University of Michigan in 2010 and received a Bachelor of Business Administration in Finance from the University of Texas at Austin in 2004. Before returning to graduate school, Laura worked as a relationship manager at Wells Fargo and was a Fulbright Scholar in Peru, where she researched microfinance. Laura also serves on the Texas Financial Education Endowment’s Grant Advisory Committee.

1 Comment

  • We can already get benefits by opening various sorts of bank accounts. Anyone’s chances of winning a cash prize for opening their savings account are very small. The main reason why most low income people don’t have savings accounts, is insufficient income to meet their expenses or barely make enough. It won’t do banks a favor if people open accounts to win prizes and then close them! All of the sanctimonizing about how the poor ought to run their lives in the world won’t change these facts.

    Dora Smith 16.10.2017

Leave a comment

Your email address will not be published.