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I'm Dave Adams is the CEO of the Michigan credit union -- And -- Davis Love to hear what are you doing here within the credit union to promote business for yourself but also provide some savings -- the individuals.
We are absolutely right that we need an incentive.
To say it.
Everybody knows that we should say we should exercise we should do a lot of things so we need incentives.
So here in Michigan we have about eight credit unions that are piloting a program called save to win.
And -- kind of links think it's called prize linked savings when it does that it gives people a chance at winning -- cash prize every time they deposit money at a credit union.
OK so I was reading about it in the wind seems to work -- -- you can correct me if I'm wrong or add to it and then tell us how it is working.
See you put a -- our money and he put point five dollars in that in in as a deposit.
And you can get up to ten chances every month to win how much to win a prize and -- that keeps going up to the more money you put in the greater your chance of winning.
This prize is how much is the prize and that and when people are actually doing this sounds.
Well that's right I mean in Michigan where we're piloting their state credit unions piloting this just since January -- this year.
-- close to four million dollars has gone into savings accounts close to 101000 savings accounts.
Over half of these people are people who have never saved before -- people who like to buy lottery tickets -- like a game of chance I suppose we all do.
And so we're finding this to be a great novel way.
To do two things one appeal to people's desire to gamblers participate in a game of chance.
While doing it in a productive way so people aren't buying lottery tickets are going to casino and squandering money rather they're putting 25 dollars or more.
The average deposit here is 300 dollars and for every 25 dollars deposited.
People get a chance to be in a prize raffle.
Cash -- 500 dollar thousand dollar every week had a chance for an annual prize drawing of a 100000 dollars so that's a pretty big deal.
Why should in the Wall Street Journal did an article on -- I just want to give people an exam for by example of this sticky show was this done.
Dispatcher for at valley parking lot and say she had just a little bit of money to put into savings -- put 25 dollars and I that's what she said are surely had ten dollars to put in -- and I -- I'm -- 25 minimum.
Did you with 25 dollars then the next week she learns where she winds 400 dollars an issue puts at 400 -- back into the savings -- -- Bill also increases your chances to win again so that I am I mean that would make a believer idea fueling -- 25 dollars and put it in and then he won 400 the next week.
Right you know what this is really all about back in the eighties as a society we were saving 10% of our income.
In the ninety's -- drop to 5% in recent years -- drop down to the negative we've been borrowing too much we've been saving too little.
So credit unions are not for profit cooperatives were experimenting with these creative incentives to help people.
Safe and our society economists will tell us that more people who say if the more we save as a nation.
The better prepared we will be to address future events like we're facing now.
-- you hit on the key issue -- We just talk about health care not for not for profit cooperatives -- -- -- -- credit unions are.
That's said what is the incentive for you did you decide you know well it's not profit but what I mean aren't you losing -- mean you're heading up all this money prize money out of it what might edit it.
Credit unions are tax exempt not for profit cooperatives and they are thriving.
In this financial services meltdown that works for us in this economy the reason they are.
Credit has -- ninety million Americans they offer great rates some low fees and they are providing a level of service that others are not providing so what is the incentive.
Credit unions grew out of the depression era they exist for two reasons really to promote draft which is what they're doing with -- when.
And to encourage responsible borrowing credit -- -- landing in this economy.
When others are not when others are unable to land -- the incentive is to help -- members and to help the communities during tough economic times and.
But it's not gonna cost a ton of money doing it demo I mean -- maybe it maybe just not that much when -- had enough for well.
You know credit unions -- or 7800 credit unions in this case we have -- credit is in Michigan -- taking advantage of a unique provision in our state lot.
So the credit unions pool -- resources to come up with the cash prizes and so all the members who participate.
Credits are able to do this cooperatively and and offer -- program that they might not be able to do on their own.
Bruce says he's been by the Nebraska office says that he thinks that idea has merit if -- front and other state can you jump into your program.
Not currently what I would say if there any state lawmakers listening half or staffers.
Michigan has a unique provision in our state -- that allows for this type of prize raffle to be offered most other states.
The only way to do this would be through some type of sweepstakes.
And a disadvantage to a sweepstakes is you can't tie it to some -- some activity.
You have to offer a chance that a prize can't be tied to something like putting money in savings.
A provision in Michigan law specifically allows for a prize -- associated with saving -- -- financial institutions -- other states need to get their laws updated.
In the state of Michigan were piloting a concept that we think.
Will be a novel and center -- a novel idea to help people save more money from.
I might well have we appreciate the idea a lot of our viewers -- -- -- dead David we'll keep up to date with his dad goes from here.
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