12 U.S.C. § 25a — Participation by national banks in lotteries

Page 20 TITLE 12—BANKS AND BANKING § 25 1 So in original. The word ‘‘or’’ probably should appear. this section [amending this section, sections 1817, 1831e, and 4519 of this title, sections 78c and 80a–6 of Title 15, Commerce and Trade, and section 286hh of Title 22, Foreign Relations and Intercourse] shall take effect 2 years after the date of enactment of this Act [July 21, 2010].’’ EFFECTIVE DATE Section effective 120 days after Nov. 12, 1999, see sec- tion 161 of Pub. L. 106–102, set out as an Effective Date of 1999 Amendment note under section 24 of this title. § 25. Omitted Editorial Notes CODIFICATION Section, act July 1, 1922, ch. 257, § 2, 42 Stat. 767, re- pealed all acts extending the period of succession of na- tional banking associations for 20 years, and made paragraph Second of section 24 applicable in that re- spect. § 25a. Participation by national banks in lotteries and related activities (a) Prohibited activities A national bank may not— (1) deal in lottery tickets; (2) deal in bets used as a means or substitute for participation in a lottery; (3) announce, advertise, or publicize the ex- istence of any lottery; 1 (4) announce, advertise, or publicize the ex- istence or identity of any participant or win- ner, as such, in a lottery. (b) Use of banking premises prohibited A national bank may not permit— (1) the use of any part of any of its banking offices by any person for any purpose forbid- den to the bank under subsection (a), or (2) direct access by the public from any of its banking offices to any premises used by any person for any purpose forbidden to the bank under subsection (a). (c) Definitions As used in this section— (1) The term ‘‘deal in’’ includes making, tak- ing, buying, selling, redeeming, or collecting. (2) The term ‘‘lottery’’ includes any arrange- ment, other than a savings promotion raffle, whereby three or more persons (the ‘‘partici- pants’’) advance money or credit to another in exchange for the possibility or expectation that one or more but not all of the partici- pants (the ‘‘winners’’) will receive by reason of their advances more than the amounts they have advanced, the identity of the winners being determined by any means which in- cludes— (A) a random selection; (B) a game, race, or contest; or (C) any record or tabulation of the result of one or more events in which any partici- pant has no interest except for its bearing upon the possibility that he may become a winner. (3) The term ‘‘lottery ticket’’ includes any right, privilege, or possibility (and any ticket, receipt, record, or other evidence of any such right, privilege, or possibility) of becoming a winner in a lottery. (4) The term ‘‘savings promotion raffle’’ means a contest in which the sole consider- ation required for a chance of winning des- ignated prizes is obtained by the deposit of a specified amount of money in a savings ac- count or other savings program, where each ticket or entry has an equal chance of being drawn, such contest being subject to regula- tions that may from time to time be promul- gated by the appropriate prudential regulator (as defined in section 5481 of this title). (d) Lawful banking services connected with op- eration of lotteries Nothing contained in this section prohibits a national bank from accepting deposits or cash- ing or otherwise handling checks or other nego- tiable instruments, or performing other lawful banking services for a State operating a lottery, or for an officer or employee of that State who is charged with the administration of the lot- tery. (e) Regulations; enforcement The Comptroller of the Currency shall issue such regulations as may be necessary to the strict enforcement of this section and the pre- vention of evasions thereof. (R.S. § 5136B, formerly § 5136A, as added Pub. L. 90–203, § 1(a), Dec. 15, 1967, 81 Stat. 608; renum- bered R.S. § 5136B, Pub. L. 106–102, title I, § 121(a)(1), Nov. 12, 1999, 113 Stat. 1373; amended Pub. L. 113–251, § 3(a), Dec. 18, 2014, 128 Stat. 2889.) Editorial Notes AMENDMENTS 2014—Subsec. (c)(2). Pub. L. 113–251, § 3(a)(1), inserted ‘‘, other than a savings promotion raffle,’’ before ‘‘whereby’’ in introductory provisions. Subsec. (c)(4). Pub. L. 113–251, § 3(a)(2), added par. (4). Statutory Notes and Related Subsidiaries EFFECTIVE DATE Pub. L. 90–203, § 6, Dec. 15, 1967, 81 Stat. 611, provided that: ‘‘The amendments made by this Act [adding this section, sections 339, 1730c, and 1829a of this title, and section 1306 of Title 18, Crimes and Criminal Procedure] shall take effect on April 1, 1968.’’ FINDINGS Pub. L. 113–251, § 2, Dec. 18, 2014, 128 Stat. 2888, pro- vided that: ‘‘Congress finds that— ‘‘(1) the annual savings rate in the United States was 4.1 percent in 2012; ‘‘(2) more than 40 percent of American households lack the savings to cover basic expenses for 3 months, if an unexpected event leads to a loss of stable in- come; ‘‘(3) personal savings provide Americans with the fi- nancial resources to meet future needs, including higher education and homeownership, while also pro- viding a safety net to weather unexpected financial shocks; ‘‘(4) prize-linked savings products are typical sav- ings products offered by financial institutions, like savings accounts, certificates of deposit, and savings bonds, with the added feature of offering chances to win prizes based on deposit activity; Page 21 TITLE 12—BANKS AND BANKING § 25b ‘‘(5) the State of Michigan was the first State to allow credit unions to offer prize-linked savings prod- ucts, and in 2009 launched the first large-scale prize- linked savings product in the United States; ‘‘(6) the States of Connecticut, Michigan, Maine, Maryland, Nebraska, North Carolina, Rhode Island, and Washington all have laws that allow financial in- stitutions to offer prize-linked savings products; ‘‘(7) in the States of Michigan and Nebraska, more than 42,000 individuals have opened prize-linked sav- ings accounts and saved more than $72,000,000; ‘‘(8) prize-linked savings products have been shown to successfully attract non-savers, the asset poor, and low-to-moderate income groups, providing individ- uals with a new tool to build personal savings; and ‘‘(9) encouraging personal savings is in the national interest of the United States.’’ § 25b. State law preemption standards for na- tional banks and subsidiaries clarified (a) Definitions For purposes of this section, the following definitions shall apply: (1) National bank The term ‘‘national bank’’ includes— (A) any bank organized under the laws of the United States; and (B) any Federal branch established in ac- cordance with the International Banking Act of 1978 [12 U.S.C. 3101 et seq.]. (2) State consumer financial laws The term ‘‘State consumer financial law’’ means a State law that does not directly or in- directly discriminate against national banks and that directly and specifically regulates the manner, content, or terms and conditions of any financial transaction (as may be au- thorized for national banks to engage in), or any account related thereto, with respect to a consumer. (3) Other definitions The terms ‘‘affiliate’’, ‘‘subsidiary’’, ‘‘in- cludes’’, and ‘‘including’’ have the same mean- ings as in section 1813 of this title. (b) Preemption standard (1) In general State consumer financial laws are pre- empted, only if— (A) application of a State consumer finan- cial law would have a discriminatory effect on national banks, in comparison with the effect of the law on a bank chartered by that State; (B) in accordance with the legal standard for preemption in the decision of the Su- preme Court of the United States in Barnett Bank of Marion County, N. A. v. Nelson, Florida Insurance Commissioner, et al., 517 U.S. 25 (1996), the State consumer financial law prevents or significantly interferes with the exercise by the national bank of its pow- ers; and any preemption determination under this subparagraph may be made by a court, or by regulation or order of the Comp- troller of the Currency on a case-by-case basis, in accordance with applicable law; or (C) the State consumer financial law is preempted by a provision of Federal law other than title 62 of the Revised Statutes. (2) Savings clause Title 62 of the Revised Statutes and section 371 of this title do not preempt, annul, or af- fect the applicability of any State law to any subsidiary or affiliate of a national bank (other than a subsidiary or affiliate that is chartered as a national bank). (3) Case-by-case basis (A) Definition As used in this section the term ‘‘case-by- case basis’’ refers to a determination pursu- ant to this section made by the Comptroller concerning the impact of a particular State consumer financial law on any national bank that is subject to that law, or the law of any other State with substantively equiv- alent terms. (B) Consultation When making a determination on a case- by-case basis that a State consumer finan- cial law of another State has substantively equivalent terms as one that the Comp- troller is preempting, the Comptroller shall first consult with the Bureau of Consumer Financial Protection and shall take the views of the Bureau into account when mak- ing the determination. (4) Rule of construction Title 62 of the Revised Statutes does not oc- cupy the field in any area of State law. (5) Standards of review (A) Preemption A court reviewing any determinations made by the Comptroller regarding preemp- tion of a State law by title 62 of the Revised Statutes or section 371 of this title shall as- sess the validity of such determinations, de- pending upon the thoroughness evident in the consideration of the agency, the validity of the reasoning of the agency, the consist- ency with other valid determinations made by the agency, and other factors which the court finds persuasive and relevant to its de- cision. (B) Savings clause Except as provided in subparagraph (A), nothing in this section shall affect the def- erence that a court may afford to the Comp- troller in making determinations regarding the meaning or interpretation of title LXII of the Revised Statutes of the United States or other Federal laws. (6) Comptroller determination not delegable Any regulation, order, or determination made by the Comptroller of the Currency under paragraph (1)(B) shall be made by the Comptroller, and shall not be delegable to an- other officer or employee of the Comptroller of the Currency. (c) Substantial evidence No regulation or order of the Comptroller of the Currency prescribed under subsection (b)(1)(B), shall be interpreted or applied so as to invalidate, or otherwise declare inapplicable to a national bank, the provision of the State con-