Indiana House Democratic Caucus

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Riecken incentives would encourage Hoosiers to save for the future

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For immediate release:
Jan. 23, 2014

  

INDIANAPOLIS - Amidst economic instability and hardship for Indiana’s working families, State Representative Gail Riecken (D-Evansville) has authored a bill offering powerful and safe incentives to get more Hoosier families saving.

The Financial Institutions Committee unanimously passed House Bill (HB) 1235 this week in an effort to encourage saving among Hoosier families. The bill allows state charter credit unions to offer savings promotional raffles.

“The point of these raffles is to encourage people to build a savings account so that, in an emergency, people can use their own money instead of high interest commercial products like pay-day loans,” said Riecken.

In these raffles, individuals would be rewarded for making minimum deposits into a savings account or participating in financial literacy programs. With that deposit comes an entry into a raffle, in which participants can earn cash prizes.

“It’s a win-win situation,” Riecken explained. “People will never lose their balance or the interest they’ve accrued, they only have the opportunity to win more money while learning how to save.”

Prompted by numerous committee meetings concerning Hoosiers who have lost their homes due to default mortgages, Riecken said the goal of this bill is to encourage people to save for unpredictable emergencies including job loss or illnesses.

“We have seen a marked decrease in savings over the last four years and this leaves Indiana families with nothing to fall back on when they experience a drop in income or an unexpected expense,” said Riecken. “The intent of this bill is to build saving habits in people who are not used to saving.”

Riecken said the end goal of the bill is to provide an incentive for people to save more in order to help financially vulnerable families become more financially secure.

HB 1235 now moves to the House floor for further consideration.

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