 Welcome, everybody. I'm Justin King. I work in the Asset Building Program here at the New America Foundation. Thank you very much for taking the time to be here today. As you might know, our work in the Asset Building Program is geared towards helping more Americans, particularly low and moderate income Americans, build greater savings, assets, and develop ownership. Along with others in our field, we put a lot of emphasis on taking ideas to promote savings to scale. And in order to reach scale, obviously, you need systems that touch vast numbers of people, and you can either create those systems or you can piggyback on them. And I don't think it's a mystery which approach is easier. So it's a pleasure to be here just one day after April 15th, tax day, a day that touches the lives of nearly all Americans, and a day that the asset building field has long identified as a key moment for turning the tax filing opportunity into an opportunity where all Americans can assess their financial security and use it as an opportunity to build savings and build wealth going forward. Our event today is cosponsored by the Doorways to Dreams Fund. D2D is a nonprofit that does leading, innovative work to promote savings, including savings at tax time. And it's a pleasure to work with them, and our relationship stretches back many years now. Our event today is called Jackpot, using lotteries to promote personal savings. And our purpose here is to investigate beyond tax time another potentially scalable, innovative technique for promoting savings, giving people prizes. First, I should say a word about why it's necessary to contemplate ideas like this one. America's at the bottom end of a 30 year decline in the measurable personal savings rate. 40 plus percent of Americans don't have enough savings to get by at the poverty line if their family were to lose their income to get by for three months. And 30 percent of Americans simply don't have a savings account. This matters because savings is incredibly beneficial and important for families. As our colleague David John of the Heritage Foundation recently said, when families hit a bump in the road, savings is the difference between sleeping in their own bed and sleeping in their car. So in addition to the short term, savings make a huge difference in the long term. The act of saving itself can change the way that people think about their own future. It can change their behavior, which leads to better outcomes, including better educational outcomes for kids and increased economic mobility. Yet many millions of Americans find savings beyond their reach in spite of placing a high value on the goal. A financial planning association survey from some years back famously found that 21 percent of Americans and 38 percent of those with incomes below $25,000 a year believed that winning the lottery was the most practical way to achieve a secure retirement. But what if they're not entirely wrong? What if we could use the appeal of gambling, the appeal of the lottery, the raffle or the sweepstakes to promote saving? Peter Tufano, the founder of D2D, wrote, in 2003, Americans spent nearly $80 billion on legalized forms of gambling. Perhaps this interesting gaming and prizes could be leveraged to help motivate savings and asset building. Given this potential, prize link savings deserve greater study and consideration in the U.S. We hope to begin this process by conducting research to evaluate the introduction of a prize link product by private sector financial institutions. The Treasury should also move forward on this front. That was written in 2006 in a paper called Reinventing the Savings Bond that was published by the New America Foundation. So here we are, seven short years later, and it seems an appropriate time to check in and see what's come of all the research and all of that, all those big promises from years ago. And without spoiling things too much, I want to say that there has been a tremendous amount of progress. There's been a good amount of research. There's been significant practice that's happened in different states. And if I can say so, I think there's a sense of momentum as more states are examining this approach and ways that it can be beneficial to their citizens and to their economies. Now there are barriers. States take their monopoly on the lottery pretty seriously. And it's incumbent on advocates to show not just the need for promoting savings, but that these are tools that are useful and beneficial. So I'm really thrilled with the panel we have today from D2D is our friend Joanna Smith-Romani, who will share with us some of the recent research and history of prize link savings from the Heritage Foundation is our friend and colleague Stuart Butler, who's been a strong advocate of savings innovations for many years, and will share some of the international perspective on PLS and apply it to our domestic context. State Representative Mae Flexer from Connecticut is here, who's a leading advocate for a bill that comes up for a vote tomorrow that would allow prize link savings in her great state. So we're very happy to have all of you here. We know we have a substantial audience watching online. If you're a member of our virtual audience, you can participate in the conversation using the hashtag jackpotpls. And now let me say I'm very honored to be able to introduce Representative Derek Kilmer from the sixth district of Washington State, Representative Kilmer is a first term representative in a district that includes Tacoma and all of Olympian Olympic National Park. His career prior prior to coming to DC was focused squarely on economic development for the people in the communities that he lived in and represented as a state senator. As a state senator, he continued his work on economic development and became the lead budget writer within the state Senate. He also took the time to investigate the concept of prize link savings, decided that this is something that would be useful and beneficial for his citizens and for his state's economy and pushed through a law allowing prize link savings programs to be put into place in Washington State. He's here now serving in the glorious mess that his Congress were delighted to have him and look forward to hearing about his experience in Washington State and whether he sees opportunities to take these kinds of initiatives that he championed at the state level national. Please join me in welcoming Representative Kilmer. Thanks so much. I was told to speak just for about 15 minutes and I'm going to do something a little unusual. I'm going to speak for less than that and then show a brief video and wrap up a little bit. This is the second most challenging speaking engagement I've ever had. The first most challenging speaking engagement that I had was in front of the children of South Colby Elementary School in Port Orchard, Washington. I was their veterans day speaker. Pre-school through fifth grade, 20 minutes. And I walk into this gymnasium and there's, you know, preschool through fifth grade, 20 minutes. And I went up to one of the teachers and said, you know, I'm screwed. You know, what do I do? And she gave me the best advice I've ever gotten in my entire time in public service. She said, here's the deal. Say whatever it is you got to say. Say it in whatever amount of time you got to say it in. But if you see any of the kids start picking their noses, wrap it up. Which frankly, I just think is good words to live by. So if you feel like I'm running a little long, you know what to do. I want to give a little bit of context for how I got into this. And actually, the person who got me into this is in the room, my friend from college, Nick Maynard. But let me step back a little earlier than that. I grew up in timber country of Washington State in a town called Port Angeles. And when I was going through school was right around the time the timber industry was taking it on the chin. I saw a lot of my friends' parents lose their jobs. A lot of my neighbors lose their jobs. They had a huge impact on me. And so when I met Nick in college, I was actually looking at how do you help timber towns in Washington State. So it got me into working in economic development professionally. And now I represent a district that has both a substantial amount of challenges in terms of developing our rural economy. And it also has Tacoma, which has some challenges in the area that's known as the hilltop. And South Tacoma in terms of developing assets and trying to build that local economy. When I was serving in our state legislature, I reached out to Nick mostly to check in, because he was a friend from college that I tried to occasionally keep in touch with. And he talked to me about the organization that he was working for and involved with asset building. And I said, well, give me an example of what you're up to. And he shared this concept of price link savings, which I thought was a really cool idea. And I said, well, I'd love to partner with you guys to do something about it. You heard some of the statistics around why this matters. You know, a third of Americans have no savings at all. And in areas like that, which I represent, that means one of two things. Either people end up potentially sleeping in their cars, but or they rely on credit cards or payday loans to deal with unexpected costs and face really substantial repayment rates. You know, we see why savings matter in areas like mine. You know, it can help us weather those financial ups and downs. Helps us weather job losses like we've seen way too much of in recent years. It helps you weather medical emergencies. You know, it also enables you to sock some money away for big investments. And it's a way to invest for the future, whether that be an education or retirement or something else. You know, more broadly, you know, if you look in the aggregate, our country is lagging on this. You know, we ranked 26th among the OECD countries, which puts us right near the bottom. It also means that we are more dependent on borrowing money from abroad, which doesn't serve our national interest as well. So that's that's sort of why this matters. So what we did at the in Washington state was we passed a law that simply allows financial institutions to offer new product to encourage savings. So let me give you an example of how this will work. Six of Washington state's credit unions recently debuted what they're calling save to win accounts. Credit union members are entered into a cash prize drawing for every $25 of savings deposit. If you make it, if you make more deposit, you get more chances to win. You don't lose anything in the process. The worst thing that can happen to you is you suck away a bunch of money. All savings deposits remain in the members accounts and the prizes are paid from a separate pool of funds. In Washington state, the prize pool is funded for three years by a strategic link, which is a subsidiary of our Northwest Credit Union Association. There's going to be multiple monthly drawings that offer savers the opportunity to win from 50 bucks to $5,000 and there will be an annual grand prize drawing of $5,000 offered next year. You know, the initial feedback back we've gotten has been actually really really positive. Twin Star Credit Union and Fiber Federal Credit Union together have already opened 60 accounts in just the past few weeks. I know that the Connection Credit Union has been working with the with the social service provider in our neck of the woods called Kitsap Community Resources and with American Financial Resources to make sure that these products are targeted towards the folks that we're intending to serve here so that they can actually build some assets. So it's been a very good start even though we just kicked this off and we'll be seeing more from participants over the next many months. One of the things I was asked about was I was asked to give a presentation on the lessons learned from this and this morning I was talking with my chief of staff and said, you know, it's odd. I actually did a video on lessons we learned from this and I thought maybe I should just show the video. So are you all cool watching like a eight minute video? Okay. So I don't know who I point to to say show the video but you? The man behind the curtain. Hello everyone I'm Derek Kilmer a Washington State Senator and sponsor of a new law here in Washington to allow prize link savings. I'm sorry I can't be with you today but I'm here in Olympia working on our state budget which means I'm both too busy to be with you and I'm acutely aware of the fact that my state can't afford to buy a plane ticket for me to be there. It struck me that it might be a little bit boring for you guys to sit and watch me yammer away on a screen. So in an effort to spice things up a little I figured I would give you the top 10 things I learned in sponsoring a prize link savings bill. Okay are you ready? Here are the top 10 things I learned in sponsoring a prize link savings bill. Number 10 it's really good to keep in touch with friends from college. The dirty secret that most legislators won't tell you that I will tell you is that very few of us have good ideas of our own. Some of us just know smart people. I was lucky enough to get in touch with Nick Maynard from Doorway to Dreams. He's a buddy of mine from college. I asked him what he was up to and he said that he was working on trying to help people build assets and make their way out of poverty. In that conversation a couple of years ago he told me what many of you already know. Too many of our families have borrowed more than we've saved. In fact one third of Americans report no savings at all. Many of us depend on higher interest forms of money like payday lenders and credit cards. He also reinforced to me the value of savings. Savings help us weather financial ups and downs like illness or as is too often the case these days job loss. It enables us to sock some money away for significant purchases. It was a really good and a really important conversation. So my first lesson my number 10 is pick up the phone and call that old buddy from college. Little caveat here do not call a former girlfriend or boyfriend from college. I tried that a few years ago just really awkward. Number nine come up with a simple smart way to solve the problem. So how did we propose solving the problem? Well after conferring with Nick we passed a new law to allow our financial institutions to offer new products to provide incentives for savings. The law referred to it as prized linked savings. The local newspapers refer to it as rewards for thrift. As an old Dire Straits fan I like to think of it as money for nothing. Let me give an example of how it works in some states. Person could open a 12 month CD with an initial deposit as low as twenty five dollars and is able to make additional deposits throughout the year. As they do their savings are in interest and as they save they earn chances to win cash prizes. No matter what you call it the idea is to make savings fund. Number eight it's important to have the right prize. We thought it made a lot of sense to have incentives to save but there was a lot of debate about what the incentives should be. There were three ideas that were rejected prior to landing on cash prizes. Our first idea for an incentive was a chance to babysit my five-year-old. This is my daughter Sophie. She's super cute and I thought it would be really fun for people to have the opportunity to hang out with her. For some reason people didn't think that would be a cool prize. Second we were thinking something entertaining or maybe sports oriented so I proposed a DVD of the greatest hits from the 2011-2012 NBA season. Apparently not a winner. Third I suggested providing folks with a deep fried Snickers bar. Seriously I tried one at the Washington State Fair this year and it was so good. My doctor says I'm not supposed to eat them but I'm telling you I would save so much money if I was given a deep fried Snickers bar. Having rejected my cool ideas we moved on to cash prizes. While cash doesn't taste as good as a deep fried Snickers bar and isn't as cute as my daughter a small cash prize can let you take your family out for a movie. A big cash prize can help pay the rent or have an even greater impact. As the great philosopher Puff Daddy once wrote it's all about the Benjamins. Number seven repeat after me this is not a new government program. You live in a state like mine you've been going through enormous budget problems. Last time I looked 48 of the 50 states had budget shortfalls. The two that didn't were Montana and North Dakota and it's because they stand on mineral deposits. I've been digging in my backyard but nothing. Just a bunch of sand. In light of those budget challenges I found that there's not a lot of appetite among Democrats or Republicans to create new government programs when we're cutting the bejeebers out of everything else. The good thing here is that this is not a new government program. It was simply a proposal to allow the private sector financial institutions to offer a new product to help people save. At some point it had to become a bit of a mantra. This is not a new government program. Repeat after me this is not a new government program. All right number six. Unfortunately due to recent budget reductions the number six most important thing I learned in sponsoring a prize-length savings law had to be eliminated from the list. Please know that I worked hard to ensure that number seven and number five picked up the slack. Number five the thing about a win-win is that nobody wants to lose. We started off this effort by forming a coalition of folks who were naturally supportive of this idea. The asset building coalition worked on anti- poverty efforts already so they were natural participants. The credit unions too were on board from the start. They sought as an opportunity to provide a valuable service and create more clients. But we found that other folks were interested too sometimes in a supportive way and sometimes in a concerned way and sometimes in a supportive but concerned way. It became a little like the whack-a-mole game from Chuck E. Cheese's. The first mole that needed whack and were the financial institutions. Initially we focused our bill solely on credit unions but got some pushback from the banks. So we amended our proposal to include them. That gave our state department of financial institutions some heartburn. In the end we included all financial institutions if and when the federal government gives the green light for banks to participate. In addition a number of folks were anxious because they perceived this proposal to be an expansion of gambling. We tried to explain that these were promotions without any losers. The worst thing that happens is that you can save some dough. Nevertheless we had to do a substantial amount of outreach to our state gambling commission and to the Native American tribes in our state. By the end everyone was cool with the idea but it took some work and a lot of outreach to everybody. All right number four. The number four thing I learned particularly in doing so much outreach to everyone is that there is a fundamental difference between reply and reply all. Not going into the details here but I really encourage you to be careful with the email. Number three. Data talks. As we pursued this legislation we got a lot of good data from states that had already enabled price link savings. Several states already authorized these programs and the data are compelling. In location after location you see an increase in savings account and increase in the amount saved more low-income account holders. Whenever we brought some data to the party people from all political philosophies saw real value. Another little caveat here. Do not and I repeat. Do not make up the data. I've seen this attempted. It doesn't work out. Number two. You know what does work? What does work is when things get tough you just give in and eat a deep fried Snickers bar. Man I will tell you those things are so good. All right number one and finally the most important thing I learned was that if you propose a program that cost the state nothing is proven to help people save and build wealth. Doesn't expand gambling. Has no losers and creates a lot of winners. Then you have a pretty good chance of succeeding. I know that not every state has had this experience but I think the more states that do enable price link savings accounts the more other states will want to give them a try. All right thanks so much for listening. Now go call that old friend from college. It's better me talking right? I mean yeah the the Snickers is actually really good. Let me just say in closing I mentioned in the video one of the challenges that we're seeing in a number of states who are trying to tackle this is this this fact that banks aren't able to participate. So we've been doing some outreach here to see if this concept can be expanded to to to banks as well. And we're looking closely at whether whether there's an opportunity for national legislation. I think it's still ought to be up to the states to adjust their laws to allow banks and credit unions to offer these types of products. But if the federal government can at least set the table for them to to do it better and do it easier I think that makes some sense. I also think we need to be vigorous in looking at the experience of the states that have done this. As my state it weighs into this Michigan, North Carolina, Nebraska. I think it again data talks and the more we look at the the experiences of those states and can learn from them to figure out how to make this better we will we will benefit from that. So with that I don't see too many people picking their noses but I want to I was told to leave a couple minutes for questions and I'm happy to answer any questions that you all might have. Yes sir. Someone actually wants to hear what I have to say. The I'm curious what kind of research has been done on the I mean there's a lot of ways to offer lotteries. Big prizes not very many. Lots of small prizes. One idea that has seen floated around which I find intriguing is this thing called a regret lottery where you set up an objective. So you have to increase your savings by X percent and everybody's name is drawn from the lottery but only those who succeeded at meeting objective actually get the prize. So they they regret having not gotten the prize and maybe they're a little embarrassed not having gotten the prize. I'm not saying that that particular strategy but I'm curious how much thought went into you kind of alluded to it. I mean with your you know the daughter in the Snickers bar but I'm sure that also there was some thinking related to actually on this money side what to offer. In our state the conversation has been driven by the credit unions actually they're determining how best to structure this and my guess is the folks from doorway to dreams might have more analysis of this. You know it's you know I think you're getting at the issues of intermittent positive reinforcement so. Hi I'm Will Jorada with the CDFI fund. You talked a little bit about how you've had to work with native communities. Can you expand a bit more about the process. Yeah there was initial initially concern from the tribal communities in our state largely because many of them have have tribal gaming and it's important to their tribal economic development and so they raise some concerns is seeing that this might be a potential competitor to them. As we walk through what this is and more importantly what this isn't their comfort level went up substantially and part of that was simply you know it's it's it's a requirement of any of us who sponsor legislation to try to do an adequate job of explaining it. So in the end the conversation was was actually pretty smooth. Some were almost all of them were just neutral on it. And we had a couple who particularly in light of some of the poverty that we've seen in rural parts of of our state. Some were pretty bullish about it. All right. Have you. So in some models this gets back to another model question a little bit in some models people are asked to give up a portion of the interest or the interest that they would be earning on these types of accounts. Now you know the House Federal Credit Union is offering people a quarter of a percentage point of interest right now in this environment that may not be seen as sort of giving up very much. Yeah. But do you know the details of of whether folks in Washington State are being asked to give up something or is it the same as any other savings and why wouldn't I do it. Yeah. In our state we actually left that up to the left that up to the credit unions to determine how they how they wanted to how they wanted to structure it and what they thought would actually encourage savings. You know I think that may you know there's a there's a lot of variables involved there including what the interest rate is at any given time. We had that conversation as we were drafting the legislation decide you know what do we want to do we want to define that variable up front and in the end we let it we left it up to to those that were going to run this Alex Kauffman from the Federal Reserve Board. I just was wondering is it currently in Washington or any other states is it possible for like non bank non credit union finance financial institutions to offer this sort of thing like thinking about like online stuff like you know PayPal or storefront financial institutions things like that. As I think about the legislation that we passed in my state I don't think that those would be eligible for it. I don't know about the other states. Is it only credit unions. Yeah they have to be a certified financial institution of the state of Washington. So you mentioned looking some things here in I guess on the federal level in the UK these are called premium bonds and they're sold online and through the post office. We all know the post office here is in dire straits for something to do. I wondered if you were looking at seeing if the post office would be a distribution point. I hadn't looked at that but it's interesting. All right I'm getting the hook. Thanks everybody. Thank you Congressman Kilmer. We really appreciate it and very excited to have him here today and looking forward to see sort of where the possibilities for this lie. I actually think that we had a couple of questions that segued us very nicely into our next panel where we're going to dig in deeper with some content experts who know a little bit more about some of these items. So if I can ask Representative May Flexer and Stuart Butler and Joanna Smith-Romandy to come and join me that would be terrific. I actually think we're going to just sit down and have a conversation and Representative Flexer if you'd take us away that would be great. Well thank you all for inviting me here to speak with you this morning. My name is May Flexer. I'm a State Representative in Connecticut and this year I think we're going to have great success with passing legislation to allow prize link savings in our state. This idea in Connecticut initially came from a number of different legislators. Some of us had learned about it through Joanna and Dorway's The Dreams at a conference of the National Conference of State Legislatures. Others had introduced similar legislation in the past and had not found success and so this year we all came together to put this legislation forward. I represent a portion of Connecticut where it's a rural area and it's where people really struggle to get by and oftentimes people might think that Connecticut is a place where there's a lot of wealth but I would argue that Connecticut is unfortunately a place where there's a wide gap between the haves and the have nots and so a program like this is especially important to me and to my constituents and to the other legislators who have introduced this legislation. We luckily have a really broad coalition of folks that are introducing this this year and we were able to start having conversations as early as last summer and fall with our leadership and with key stakeholders in order to build momentum and to find the success that we've had thus far and hopefully we're going to continue to see when the House votes on this legislation tomorrow. We've been able to garner the support of credit unions from throughout the state and community banks and also from natural allies, advocates for economic security have come to the table and helped us with this legislation and we've also faced some concern from anti-gambling groups. We've tried to address some of their concerns. One of the things we're doing in our legislation is to make a requirement that you can't participate in this program unless you're over the age of 18 and we've tried to have serious conversations as Representative Kilmer stated that there are no losers in this program that this really does encourage people to save and when having conversations with folks who have concerns about gambling behavior I've shared my own experience. When I was a kid I remember my mom constantly telling us as she bought lottery tickets that she was going to win and we were going to go to Disney World. Well, guess what? We never went to Disney World and perhaps if she'd taken that $5, $10 she spent every week on lottery tickets and put it in a prize-link savings account perhaps we would have one day gone to Disney World. With or without actually winning the prize. So we are excited about this legislation. It is enabling. It allows credit unions in Connecticut and community banks to offer savings promotional raffles under special conditions. There's going to be regulations put together by our state Department of Banking and those raffles are going to be subject to audits and that basically sums up the legislation. It's enabling. We're looking forward to a finite success tomorrow in the House. We have broad bipartisan support in both the House and the state Senate and once the bill passes the House and hopefully passes the Senate we look forward to working with all of those stakeholders to actually put this program in place at our credit unions and community banks. Thank you. That's great. Thank you so much. Stuart, we had a question about premium bonds in the UK. You've done a lot of work looking at the international context. What can you tell us? Yes. And thank you for inviting me to speak today. I'm very supportive of this whole approach. And I'll talk a little bit about that as well as sort of generally how we sort of think about prize-linked savings. My particular interest is in the whole area of economic mobility. Why do some people move up the economic ladder while others don't? And I think it's fair to say that when you look at the distribution of wealth and income in this country the problem is not that Warren Buffett saves too much and invests too much. The problem is, as we've heard, it's the bottom third of the population that is saving nothing and investing nothing. And that's what we've got to focus on in terms of dealing with this. And also that that population, as we've heard, is more inclined to think about protecting the future by gambling in some way rather than a systematic savings and investment strategy. You've also heard that when people do, in fact, have a habit of savings, not only does it build up wealth and therefore give them protections from shocks and also allows them to invest in many things to improve their situation, but it's also linked to other patterns, too. People who save regularly tend to have longer time horizons. They tend to delay gratification. They tend to do things that not only result of the savings itself, but also encourages them to act in ways that will make it more likely that they will acquire the human capital and so on to move up the economic ladder. So it's really important to focus on how to build a habit of savings. And I think when you do this, it's very important to recognize that there are two sides to the brain. There's the left side to the brain, the logic, rational side, which is very important to appeal to. It's very important to look at things like financial literacy to try to explain to people and convince them that it really makes sense to put money aside and so on. And a lot of people and a lot of organizations do this. And it's very important as a part of the equation. Organizations like ERN in San Francisco focus on low income people to encourage them to save and so on. But it's also important to look at the right side of the brain, the emotional side. And for a lot of people, that works a lot better to get them to do things that are in their self-interest than talking to them rationally. Although both, of course, are necessary. And the critical thing about this approach that we're talking about today is that essentially, it recognizes this factor of the right side of the brain, the impulse, the desire to gamble and so on. And says, how can we actually turn that impulse into a positive goal that establishes a long-term habit change? That's actually what this is doing. And there are various ways to do this, to accomplish this. We have a draft paper outside that you're very welcome to pick up, which just looks at a whole range of approaches, including the international side. And I think when you look at this, you can look at these sort of appeal to the right brain in terms of three different general approaches. One is sort of what we've heard a little bit about already, ideas like save to win, which I know which you're going to hear a lot more about in a moment, which basically say, let's pool the earnings you would have on a traditional savings in a credit unit. Let's pool that. And then let's sort of entice people by saying, you've got a chance to kind of win the whole amount or win a big chunk rather than getting a boring, small interest on what you are saving. And that's one strategy, which as I said, you'll hear a lot more about in a moment. A second strategy is to use the bond system, the idea of investing in a bond for a long period, to lock in capital for a period and take the interest you would normally have on a bond and turn that into a pool of prizes that can be distributed to people in a certain way. And that's what the British premium bond system does. In this case, like any bond, the principle is kept intact. You don't lose it like you would in a lottery. But just like a lottery, the potential winnings are pooled together and then distributed. And there's been an interesting kind of experimentation there. This is a program that began in 1957. Interesting ways of calibrating savings, the returns rather, the prizes, to see what is the way in which it's more likely to induce people to actually save. And in the UK, they have big prizes, not like the Powerball here, but a million pounds, which to British people is a lot of money. But it also has a lot of smaller prizes that seem to be very effective in inducing people to save. In fact, when I was in the UK in December, visiting my brother and my nephews, my nephew Felix was very excited because that morning, he'd got in the mail one of his prizes from the premium bond. And I actually have a picture of it here to show that I'm telling the truth, for 25 pounds, which he kind of could count on every, you know, maybe about every quarter. And he was texting all his friends and they were going to go out to the pub and he was going to stand them some drinks on this 25 pounds. And I really got him kind of excited. I remember when my father, back in the 60s, started buying premium bonds. And every month, we would all gather around the television to see who was going to get the big prize. He also got small prizes and he was very excited. Now, I was a smart ass teenager at the time. And I said to my dad, well, this isn't particularly rational. It would be just as good to put the money aside in a savings account and so on and so on. But I was talking to the wrong side of his brain. What he was interested in was the thrill of the chance of making, of getting a winning like that. And indeed, when the premium bonds were introduced in Britain, they were described as savings with a thrill, you know, left brain, right brain, savings with a thrill. And that was, that's very important in terms of understanding why these things are so attractive. Well, now, 40% of all adults in the United, sorry, of all adults and children in the United States in the UK actually have premium bond accounts. And we now have over 70 billion, the equivalent of 70 billion dollars invested in this. It's been a huge growth area. So that's second form. Using the bond mechanism, combining it with a lottery in order to induce people to save. And the third is kind of really interesting because it's not exactly the same as a lottery. But the idea of combining savings or debt reduction with a sweepstakes model. Sweepstakes are not lottery. Sweepstakes are when, you know, when you maybe go somewhere looking for cars or something, you can enter a sweepstakes. You don't have to buy anything. You just have to show up. And then you've got the chance of winning a prize. Sweepstakes are therefore a little different from lotters, but are the same kind structure of trying to induce people to save in some way. They're legal everywhere already, which is a big advantage of that. They induce savings even though they're not pooling the money or in any way using that interest as prizes. What they do is use essentially advertising revenue going in line with the savings to finance prizes of various kinds, not just money, but actual sort of physical prizes as well. And they use essentially a point system to give you chances to enter the sweepstakes. So the more you build up savings, the more you get points, which then allows you to enter the sweepstake, which is financed from advertising because you have to see the adverts when you do this. And that's how that's financed. So it's a subtly different form. And an organization called SaveUp has pioneered this in the last 12 months. And we've already seen a huge expansion in both savings. And they also build in a debt reduction sort of element to the equation as well. So you can get points by reducing debt or expanding savings. So this is a variant on the general theme that we're talking about today. So when you look at this, there can be various ways of doing this, of basically combining this, the saving strategy, the logic of that, the rationality with this appeal to an emotion to encourage people to do things which is in their self-interest and will make it more likely they will succeed in the future. And that's why I think these approaches are so important. When you look at what it takes to cause people to move up the economic ladder, there are many things. Not just what we're talking about here. It is things like education. It is things like strong communities, families, and so on. But there's no question that encouraging people to save systematically and build a habit of saving and do that by appealing, as I said, to both sides of the brain is absolutely critical in terms of encouraging people to be enabled to achieve the American opportunity and the American dream. That is so important today. Thank you. So Joanna, Stewart's given us some of the bigger context, other countries and the different models that are out there. And we've had other folks tell us a little bit about, we've mentioned, some of the other states. Can you sort of fill those pieces in for us and tell us what's happened where this momentum has come from and where we think it's going? Yeah, sure. I'd be happy to. So we've been working with the prizing savings concept, we call it, at Doorways to Dreams Fund since 2006, 2007, really working to launch an actual pilot in the United States in 2008. And where it comes from us is this need that we need to change people's engagement and people's relationship with savings. It's just not working the way we do it now, frankly. And our point of view is that you need big, audacious ideas to do that. And so we are stealing from international experience to translate that into what works in the US. And there's been an enormous amount of momentum, Justin, as you mentioned. Since 2009, when the first kind of saved to win, and we have plenty of research on the experience and saved to win on our website, has launched. We've had six states pass enabling legislation. We are looking to our seventh, right to my left. Four states have launched a product to the tune of over 42,000 accounts and $74 million saved. So significant impact for those of you who work in the asset building world, think about what it would take to get another kind of savings product, match savings account, tax time savings, whatever it is to scale like this. I mean, this is a lot of people, a lot of dollars saved. And frankly, from a public policy perspective, we think it's doing its job. Roughly 50% to 79%, depending on the state, of account holders have some financial, financially vulnerable characteristic. They don't already have savings. They are actually low to moderate income. They have never saved before. There are different ways that we categorize them. We actually have a recent report sitting outside there for you if you want to look more into that. But to think about it, more than half of account holders before they were saving were financially vulnerable. That's really good public policy in action and public policy impact. We also see that a third are actually LMI. So low to moderate income, this is a product offer on the market. It's very important that it is attractive to a variety of diverse set of consumers. Otherwise, it just won't be sustainable, really, from a market economics perspective. But the fact that, given that context, we still have a large percentage of folks who are a low to moderate income says to me, product features are right and they're successful. And the public policy is doing what it's supposed to do. And over 50%, at least in Nebraska, where we've been asking this question, don't have any other financial reserve. I mean, oh my goodness. They had nothing. They came into this account and now they're sitting on average with $500, $700, $1,000 in an account. That is money between you and financial catastrophe for your family. So we think it's really successfully building into an emergency savings product, which is also very exciting to see kind of on the market, easily accessible, but with the fun. And that's why folks are joining. Some of the other work that we're doing now to say, OK, we've learned this lesson. It's been four years working in the primarily credit union industry. Huge success. A lot of commitment from credit unions in North Carolina, Nebraska, Michigan, Washington state, and all of their credit union leagues is, you know, where else do we go from here to get to scale? To that end, it has been no secret that we have been very bullish on this idea of what role could the lottery play. So in our crazy D to D brains, we sort of look at the world and say, what assets already exist? What infrastructure already exists? Where is it overlaying in the marketplace that we want to be at? And I have to tell you, the lottery is like a straight on bullseye. We have a recent report out there about our new work in the lottery space and a lot of the research that we've done, new research on consumer interest in this. But when you think about it, the lottery has over 240,000 retail outlets in the country that is at least four times what you see in financial institution branches. They have legal authority to offer games of chance, which is an enormous hiccup in trying to get financial institutions to be able to offer this. They already are in neighborhoods where financially vulnerable folks conduct business or work or live. And they know how to do fun. And they are attractive to people and already are a source of financial planning for many consumers. So again, we're looking at new channels. We're working with a handful of states to really figure out, OK, this is an idea. What does it mean in practice? What does it mean in concept? We have scratch. I don't even have one on me. But we have these lottery scratchers that we mocked up for everyone. Oh, thank you, Stuart. So that you can really conceive of this idea of what would it mean to scratch and save your way into financial security and good times. So it's a real scratcher. Really, please scratch it. You can see if you won, but everyone wins a candy bar because everyone wins in prizling savings. But really doing our best to help visualize, conceptualize, and of course build a business model for how the case would work. But we're excited about the access that would be expanded through lottery. We're really encouraged by the access that's being expanded through the credit union sphere. And we're really looking to leadership, like Congressman Kilmer and others, to say, well, how do we create a more inclusive regulatory environment such that all financial institutions, not just credit unions, have an open space to play? And so we're eager to work with the federal level to really say, one, government should be pro-savings. It just totally makes sense from a policy perspective. And we need to figure out what's making it hard for lottery to offer savings, what's making it's hard for banks to offer prizling savings. And that when we're thinking about all savings policy, frankly, not just prizling savings policy, saving needs to be immediately gratifying. It has to have features that do that or people won't do it. Savings has to be fun. It just is, right? There are a lot. I mean, good grief. We just saw such a terrible tragedy yesterday. We need things in our life that are fun, that help us engage, that bring lightness to it, especially when finances are such a heavy topic. Savings has to be engaging, or you just don't continue to do it, right? You deposit once you go away. That doesn't build anything. And savings needs to continually have fresh and new pieces to it, features to it, ways it interacts with you, or you're just going to stop. That's great. I want to dig into sort of the path forward. But let's take a step back before we do that a little bit. Can you tell us a little bit more about why you, the decisions that you guys have made in designing the bill in Connecticut? You know, Stuart sort of laid out these sort of different approaches. Have you recommended a specific approach in Connecticut, or like Washington State leaving that up to the credit unions and other participants to say, this is the model that we're going to adopt. And we'll see what emerges from sort of a marketplace of ideas. Our legislation in Connecticut is very similar to what Representative Kilmer talked about in Washington in terms of empowering credit unions and community banks to engage in this type of programming. The parameters in the bill do require certain regulations through the Department of Banking and qualify who can run these types of programs. But we are hoping that they're going to sort of run themselves. Although I would say that one of the, we intend, as legislators, we intend to be a part of that conversation of setting the program up going forward while we think that you can't legislate every nuance a program like this may need. We're hoping to be at the table as the credit unions and banks start to set up these programs. Can you legislate fun? No, no, no. But is there, you know, is there, are there aspects of this where you were suggesting or encouraging participants to to to think outside of the box and to do that? Or do you think that sort of the idea in and of itself is going to lend itself to creative marketing? We think the idea is going to lend itself to creative marketing. And, you know, one of the concerns that we had gotten actually from anti-gambling organizations was specifically about the marketing. And so one of the, and they wanted us to legislate that. And we thought that went beyond the parameters of what we were trying to do. But one of the ways we've tried to allay those concerns is by saying that we will be at the table to make sure that the marketing for these programs is responsible, does promote both fun and savings, but does so in an appropriate way. And what's the what's the mechanism for you guys to remain at the table? Is there a review? Is there a board that's supposed to gather? It's more of an informal agreement that we are to continue to be a part of the conversation. Right. I thought it really interesting that one of the measures that you had to take in order to inoculate this proposal from some of the anti-gambling opponents, I think you said, was to make sure that no one under 18 can participate. That's really interesting. We've talked a great deal about sort of children savings accounts and the possibility that's offered when you get kids invested in saving early. And I think a lot of the folks here on the panel and maybe in the audience would sort of agree that there's a lot of promise there. And I'll be very interested to see, I understand sort of the decision you made at this point, I'll be very interested to see if this leads in the future to productive experimentation on the possibilities of connecting kids to savings accounts early. Let's transition a little bit and let's talk a little bit about the path forward. Stuart, I don't want to put words in your mouth. The one would say that the traditional heritage approach to this would be for people like Representative Flexer to do what they're doing, to have the states be the arbiters of this as an idea and the fact that there are five, six, and maybe soon seven states that have adopted this is proof that that approach is working. I also see Joanna's point that government should be prosavings as one that we consider to be valid. And there's tax reform staring us in the face. And through the tax system, the government, particularly the federal government, essentially defines the entire universe of retirement savings products as far as most Americans are concerned and has a lot of impact on other aspects of savings. And something that's sort of come to light recently a little bit is the extent to which a focus on retirement savings only can be self-defeating. And people who have all of their savings tied up in a long-term account like a 401k may end up losing a lot of money when they have to crack open that 401k to meet emergency savings needs. So there's a bit of attention there. And then I also see a savings bond program that's flailing. It's not as robust as it once was. And I see that as one of our questioners asked earlier, what about the post office? The post office is prohibited by active Congress from competing in the financial services marketplace. So I see a variety of areas where national action could address these questions and where there is sort of precedent for the federal government's involvement in promoting savings, sometimes not very well. And so talk to me a little bit about what you see with the path forward. A lot of questions there. Yeah, I started talking. I think generally, as you heard from Representative Flexa that really what you want to try to do in this is to encourage as much innovation and experimentation as possible, not just from the distribution of prizes, for example, which is one area, but also what kinds of products are offered. And all other things being equal, you'd obviously want that to be as locally, you know, as further down the system as possible. But you're also correct that there are certain things at the federal level that either get in the way of this or can, in fact, inconsistent with good general policy and tax policy can help this as well. I mean, for example, a lot of financial institutions are chartered at the federal level rather than the state level. So if you don't have compatible legislation at the federal level to enable federally chartered institutions to go in a similar direction, you're going to have a problem. You're also going to have a political problem because then you're going to see some institutions in a state saying, well, why should I, you know, these state chartered banks can do this and I can't. So I'm going to try to oppose it. So for both, you know, good practical political reasons as well as consistency, you'd want to have similar strategies at the state level. And that's one of the things that's very important. We talk a little bit about it in the paper that I mentioned outside in terms of the origins of the restrictions, which is related to gambling and so on. Also, tax policy is very important. You're actually correct that in order to induce people, encourage people to save and to invest, generally, you do want to remove the double taxation elements in the general code. IRAs and retirement savings accounts and actually also, of course, educational savings accounts do this in limited areas today by not double taxing money you put in your IRA or 401K plan. We favor it heritage, like a lot of people do, widening that generally to savings and say, if you save, then the savings themselves are not double taxed. No matter what you use it for. So that would encourage people to save for emergencies, to save, to have enough money to move to get a better job and all sort of things. So that's very important. And then, of course, also, as you alluded to, the distribution network of what one can do to encourage that. Enabling, of course, financial institutions to offer these kinds of products is a huge increase in the availability of outlets. But, of course, if you look by neighborhood, by income level and so on, you're going to tend to see fewer financial institutions in neighborhoods where you really want to encourage this. So it is important to have other institutions able to do that. I think the lottery system is a real possibility and a good idea. 7-11s, lots of institutions in neighborhoods have taken on a lottery component and they've got the basis for doing this. There's a number of issues to address there, but I think that makes a lot of sense. I'm also very interested in things like having intermediary institutions like churches and other organizations actually sort of do combined savings systems. One of the things we learn from the research is, very often, research generally, is if you tend to do something in tandem with other people, you're more likely to do it, whether it be going on a diet or having fun, or savings. And so when you see kind of pooled savings of that nature done through an institution, that's probably more likely to get people to keep doing things in a habitual way. So it's very important, I think, when you look at the federal level as well as the state level, to say, what are the impediments to institutions pooling savings, encouraging people to go into these prize-linked saving systems? Maybe the prize goes to the church rather than you. It still can encourage people to save. So it's really important, I think, to look at that. And I think people on the cutting edge of this that are thinking this through are looking at those kinds of aspects, too, the use of intermediary institutions as really important as part of this inducement and collective kind of savings vehicles that then have this sort of a thrill aspect of the prize as the core inducement to get people to sign up in the first place. Joanna, you talked a lot about sort of the path forward before. But Stuart raised something really interesting, which is 7-Elevens, right? And using different outreach tools and platforms to sort of connect with people. Can you talk a little bit about, in the states that have led the way on this, what's been done in the way of outreach and publicity? Have each of the participants been sort of on their own in terms of making the most of the they can of the product they offer? Or have there been any coordinated campaigns? Sure. So it's varied slightly. But effectively, the credit unions are working together cooperatively on the singularly branded product. So it actually has all been saved to win in all these states. But the North Carolina credit unions work together. The Michigan credit unions work together and so on. Have one marketing campaign. They do a lot of work internally to market to existing members. That's purposeful. When we first started in Michigan, the credit unions that were participating sort of did an audit of their own membership and said, all right. So they're connected to financial services, check. But are they actually more financially secures a result? Question mark, no check. And said, essentially, there's just a lot of work we can do to shore up our own membership before we even go to the public, right? Which I think was really thoughtful. I think in our asset building world, we say a lot about, well, are people connected or not? That's not enough. That is step one. Are they using it? Are they building emergency savings? Are they building financial reserves? That's probably the more important question, right? Are they getting access to the right product that's engaging them in a way that's leading to a better outcome? So a lot of the marketing has been internal. We've been doing tests with different credit unions on how do you do texting? How do you do email reminders? You know, what is the sort of social media aspect? How do you keep people engaged, keep it fun, keep it more than just depositing to get folks very sort of committed and loyal to the product? And it's had varying success. I mean, it's an area to learn from. There's a whole new buzzword in this world called gamification, you know, around all of these experiences. We have quite a bit of experience in not just through prizling savings but through our financial entertainment work, which is really, you know, how do you totally reframe an experience so that you don't even know what you're learning through it. But you know, you're sort of getting it on the other end. My colleague, Nick, and our executive director call it broccoli with chocolate or something like that. Sounds disgusting. But it's better than broccoli. So, but, you know, really thinking about these principles and not in a trite gimmicky way, but in a long term relationship building, relationship management way. And that's what's been going on with the credit unions. A lot of testing, exploring, figuring out images. It's all really creative and super fun. That's great. Stuart. I just have a very quick point about that. That really important issue, the gamification and so on. One of the things, for example, that save up does that I mentioned earlier is you can do all sorts of things which are strictly games. They have nothing to do with prizes. And the logic of that is that getting people to kind of visit the site and engage in a game also has the byproduct of getting them to be more likely to kind of rack up points by reducing debt and so on. So it is very important to kind of see this really is an investigation of the left brain. Side of the brain. It's what induces people to form habits and to be more likely to expose themselves to inducements to do good things rather than bad things. That's really what this is about. And so the whole research on behavioral economics, on how brain function, you know, really is critical to understanding all these kinds of products and how they're structured. And there's a lot more to be done in this area. And there will be. And I think you'll see a continuous refinement of these kinds of products based on really very hard science about how people make decisions or don't make decisions or more inclined to do repeated things that are positive rather than negative. That's what a lot of this is really about. You know, that's interesting. You know, I think, you know, there's a there's a comparison that can be made with almost what it sounds like people are hoping will happen with what actually has happened in a lot of other areas of the financial services marketplace. You think about the explosion sort of prepaid debit cards, right, and the vast array of features and products and fees and experimentation that's going on in that space. And a lot of that, we would argue, has some troubling aspects to it for the consumer. You see sort of celebrity-branded cards that have really no value for the consumer in comparison to other products in the marketplace other than the affiliation with the celebrity. And there's real sort of questions about how we ought to move forward in that space, but we are seeing an incredible amount of experimentation and we do hope that, you know, with appropriate regulation from the CFPB and consumers hopefully applying some lessons that there will be products that really work for people in that space in the long run. Maybe the same thing here. I think it's right to be very concerned about what you just said. On the other hand, you know, you can imagine what you might call the gateway strategy. What you're trying to do is to, you may not ideally want a person to take the first step that they take by a celebrity-based card or get a card, but at least they're doing that step and that may be the inducement. And then what you really want to do is to try to follow up with then how do you communicate with this person in such a way that you get them to make a rather more rational second step decision. And I think that's a lot of what this is about. And you've got to see it in stages that way. You're trying to get people ultimately to form a habit which is completely rational and sensible and so on. But getting people to make the first steps, sometimes you got to do in a kind of creative way which is not necessarily ideal, but at least gets to take the first step down a very important road that they're not taking at all right now. Right, that's a great point. I would like to open it up to our audience for questions at this point. If folks would be so kind as to wait for the microphone, identify themselves and use a question mark at some point, that would be tremendous. And also I'd like to sort of offer up the opportunity as we engage in conversation to our panelists to ask questions of each other with the same rules applying. Do we have questions in the audience? Hi, I'm Barbara Littman with the Federal Reserve Board. I wanted to ask Representative Flexer about conversations that you may have had with the Bankers Association in your state and what their position on this was from a competitive perspective. And am I allowed a second quick one to Joanna? Can you talk about the interest among financial institutions in developing this as a source of small deposits? So initially our effort in Connecticut was going to be focused on credit unions and that was the part of the industry that we reached out to first and got their cooperation on. And then banks became interested in the concept as well. And so we've been able to change our legislation to include community banks, state chartered banks. And we know that there's conversations happening at the federal level with the FDIC in terms of potentially enabling federally chartered banks to take part in this. And if those conversations continue to be productive and that moves forward, we'll be sure to amend our legislation to make sure that those types of financial institutions can participate as well. I think they're clearly frustrated by that, but they know that we can't necessarily fix that for them. Yeah, I'll just add on to that and then answer the second question. D2D is of course agnostic on the kind of financial institution that offers this product. And it is our hope that it is inclusive. And we've seen in all the states we've worked with some level of interest from non-credit union financial institutions. So banks, state, and federally chartered. But it is our understanding from legal counsel that there's something we've all sort of alluded to, very clear federal regulations around this for even state chartered banks. This becomes a political issue when we're trying to pass laws if only credit unions can actually offer it. But it also becomes sort of a consumer access issue where you really want consumers to be able to get similar kinds of products at similar institutions. And this truly is something that federal regulators and federal policymakers can do something about. And it may not require literally an act of Congress. It could simply be opinions and investigation by regulators. But at this point we're all operating based on legal opinion. And legislators such as Representative Flexor sort of left out there trying to negotiate and all they want is for people to save in their state. And so it's a pretty challenging situation that we believe there are some pretty prudent common sense ways to fix. In terms of your question, Barbara, about other financial institutions and deposits, it's a, in the financial institution world right now, at least on the credit union side, there is this sort of general lack of interest in deposit taking. They have a ton of deposits. And so it has been, I think that has impacted the results that we see in states. I mean, I am still incredibly impressed with 40,000 accounts and millions and millions of dollars on deposit, mostly by low income consumers. But it is true right now that because of their balance books, they don't really want as many deposits. And so that has impacted sort of the willingness of some financial institutions to participate in the program. That is very cyclical. If you're in that world, you know that and things change. For those that have participated, they're sort of taking the long view that says, one, these aren't actually very big deposits. Like collectively, from an impact perspective, they are, but on their books, they don't feel so big. From a mission perspective, we've got to do this. This is part of our charter, our goals. And third, financially secure customers mean borrowers in the future. And those are profit customers to us. And so what we really need to do is get, you know, build more financially secure members, customers now that can use our suite of products later. More questions from the audience? In the back. And then Hannah, come to the front a little bit afterwards. Will Gerardo from CDFI fund again? It sounds like the transactions involve you having to go into a brick and mortar of some sort. Is there an adaptation for mobile technologies of being able to have funds transferred online, have funds transferred from your pay stub to go directly into this? So, you know, there could be. I mean, technology is such a key driver in all access issues with financial services. For many of the credit unions that we've been working with on the Save to Win product, people are setting up automatic, you know, movement from accounts. So it just happens every month or splitting their paycheck. So that's happening without bricks and mortar. I have been very surprised in a good way at actually the amount of still branch-based traffic credit unions have. So they just are kind of a bricks and mortar place. And I do believe that this product requires a little bit of an explanation in a sales pitch, right? So you sort of need to be in the presence of someone. But in terms of future technology, I mean, that's a lot of the work that we're doing in our, not the paper out there, but a paper we have online called Playing the Savings Game. We go into some detail about different distribution channels that we're exploring, really to get to a national scale, one of which is thinking about prepaid cards and what you then do sort of online to create the engagement. The technology of the lottery system is endless. You know, right now in Minnesota, they are testing at pilot locations whether or not you can get a lottery ticket when you pay for your gas. Are you kidding me? That's amazing. Why can't you also impulsively buy savings while you buy gas? I don't know who would, but I think it's very cool to test it. But essentially that the lottery spends, and this is gonna be a technical term, bajillion of dollars, investing in these amazingly sophisticated financial infrastructure that at this point we are just using to transmit lottery sales. But in other countries, they're using for a wide variety of other activities that we could really harness here. So there's super cool technology out there. There's a lot of really creative cutting edge stuff as Stuart mentioned. And we just, we are in a position in the US where we really have to figure out the regulatory side and how these things mingle and interact. I can just sort of add to that. I think you're actually on the right track there. And as you heard, I mean, the technology is developing to such a pace that all kinds of things are possible. For example, when you look at, we now have regular apps that allow you to monitor what's in your account. I mean, you know, apps like Mint and so forth. So well, SaveUp uses that, for example, uses that technology to know whether you're saving or reducing debt as an indicator, whether you get points to go into a sweepstake. There's nothing is involved. You don't have to do anything. It's simply an online kind of mechanism. When you look at the prepaid card kind of notion, you think about prepaid phone cards, everywhere in lots of neighborhoods where people don't have online accounts and so on, there are various ways of using the smart card model in this way. So people, instead of taking, they buy something and there's a 50 cents worth of change. Well, it can go directly onto a card, for example. I mean, the technology I think is endless to make this easier and easier for people to do without going somewhere or opening an account in a traditional sense. And I think that's where a lot of the important growth is going to come, particularly for people who right now don't have accounts. The idea of walking in, for a lot of people, the idea of walking into a bank and sitting down with somebody and doing something like this is so almost alien to their normal life. They just don't do it. They're actually afraid of it in many cases, afraid of going into institutions. So these devices that allow this process to be linked to something they're quite familiar with and comfortable with is indeed the kind of the beginning of what I call the gateway. Getting them to do something in such a way that it's completely natural, normal, and so on and then over time may cause them to kind of gravitate towards more sophisticated uses of this model and larger deposits and so on. That's the way I think, it's that first step, which is so critical. I mean, that's what you see with people who don't save. It's not that people save a tiny amount. It's that they don't save at all. Once they start to save, then a habit forms and that builds up over time. So it's that first interaction, which is so critical in terms of the way the brain works in this sort of thing. And that's why I think you're right. The technology allows all kinds of ways of doing that, including the game first step, nothing to do with savings, but gets you to start being familiar with a site to then start exploring it further and then doing the other things. That's what's so important here. And then the other thing that technology allows us to do is automation, which for a lot of us takes this, takes that first step and turns it into a lifetime habit without rest, it illuminates everything else. I think we have one more question in the audience up front here. Maybe we'll hold on for one second. We'll grab a microphone for you. Thank you. First, yeah, it's new to me. So I need a little structure. You're talking about credit unions. It used to be a thing where you had to be a member of a credit union to use a credit union. I'm assuming that's no longer the case. I would like to know just on a literal individual basis how this would work. Do I walk into a credit union, which I already have. All right, I don't have. Ask for a form. Then do I initially give them money? And this money, if I don't take anything out to use, is going to build up interest. And is it going to be matched? I still don't get how this works. Is it going to be matched by the credit union? And is the credit union relying on hundreds and hundreds of people to do this, that they're going to make money off of this product? See, I need a little more of a literal. Yeah, that's a great. And what happens with the prize, right? Does the prize go straight into the account? Do you get mailed a check? Do you get mailed a debit card with a lot of fees on it? Thank you very much, Virginia. What happens, Joe? So there are a bunch of different, thank you for that question. There are all these different models. But to simplify it, I'll explain the way that we have been piloting and testing in the United States in partnership with all of these credit unions. Real quickly, you still have to be a member to join a credit union. Many of them now have very broad membership guidelines so that credit unions now are more open and more accessible to more people. Including someone who lives in the state. Yeah, so it depends on the credit union. Many credit unions are, if you live, work, breathe, worship, I'm not joking, like those words, then you can be a member. So it's actually much easier to become a member than it used to be of a credit union. That's my credit union story. In terms of the product, the product that they have decided to test and use is what's called a balanced building CD. So it's a certificate of deposit. You open it for $25. It has a term, one year, from whenever you opened it to a year later. The money is tied up for that year. But you can continue to deposit to that account, which is pretty unique for a CD. Typically, you put all your money in up front. You come back to it in a year or five years. You decide if you're going to roll it over or take it out. In this case, you can continue to build it. But the money is held so that you can't just withdraw all of it. For every $25 you deposit into this account, you get a chance to win a grand prize and monthly prizes. If you deposit into the account in a given month, you have a chance to win those monthly prizes. If you don't deposit that month, you can't win the monthly prizes. You can still win a grand prize. So the goal with the monthly prizes is to engage you every month in depositing. Otherwise, you're missing chances to win. You're just leaving money on the table. But to get you to build it really big and to keep it in there the full year, you've got a big old prize at the end, because that's what attracts you to the account to begin with. In the US, most of these accounts have been earning interest. At the big-scale business model of it, you look to the UK for a really successful example, where you have the premium bond. Those bonds are all being pooled by one institution, the government. They do not earn interest. So essentially, the interest that isn't being earned by the individual is turned into prizes. There's a pooled set of funds that then distribute prizes out monthly to bondholders. And people are essentially making their decision for themselves that they are comfortable with the probabilistic chance of winning, because that's more fun, has more prizes, is probably better winnings, than they guarantee of a low interest rate. So you're deciding if you want to guarantee versus probabilistic, and this interest rate environment, frankly, you'd sort of be a fool to not go with probabilistic, because interest rates are so terrible. But you see over decades in the UK that even with interest rates changing, it still actually has incredibly high demand because of the thrill, most likely in the community aspect of it. Well, now, why this... The impression I get is there needs to be permission from some financial entity. I didn't quite get that. Why? Why can't the credit... Good question. I have the same question. Why can't we do this thing? It seems so reasonable, and it really isn't gambling. It is your money. But actually in this country, we have an enormously complicated, complex web of regulations around any games of chance and then what financial institutions can do. So these are separate regulations that are interacting pretty poorly around this product. So you both have to be allowed to offer a game of chance, which is incredibly regulated and almost uniquely monopolized by states, like state governments. And then you have what financial institutions are actually authorized to do, which in this case, banks at all different levels are prohibited from offering games of chance. So that's really the core issue. And one of the fascinating history lessons that I've learned through learning more about this is that the reason that that is the case is that the lottery is the state's effort to take away a money-making institution from organized crime. And if you watch any gangster movie, somebody is running the numbers. The numbers is a neighborhood lottery back in the day that used to be a terrific money-maker for organized crime. And the state stepped in and said, we want people to, people need to have access to this. Yeah, exactly, we'll take the money. Right, that's the skeptics approach to it. Right, that's right. So it really is, and these rules are in place for crime prevention and state revenue generation. And what's the law of unintended consequences is also banks can't offer this interesting savings product to people. Yeah, I think the unintended consequences is exact. We have history in this country, which sort of explains why you have certain laws that might not seem completely rational. I'd also just make the point that timing is everything in a lot of issues like this. And for the reasons I already mentioned, this is a particularly good time economically for this because you've got both low inflation and low interest rates. So when you put money into, say, a bond or something like this for a period of years with no interest, you're neither losing much in way of interest nor are you losing capital. If we had high inflation, then locking up a bond for several years with no interest would mean that your capital would deteriorate. Still may be sensible to do it, but that's what would happen. So this is a particularly good period for this kind of way of getting people to invest. And it's important not to lose that opportunity, both economically and politically to move it forward. We've one more question about halfway back. And then I think we will wrap it up. Hi, I'm Zara Kessler from Bloomberg. I guess it's for Representative Flexer. You just said that the kind of the great thing about lotteries is you get a lot of revenue for your state and, or you can, not necessarily a lot, but states do make a lot of money off of those other lotteries in 7-Eleven. So kind of devil's advocate question is why offer this next to it. That's a great question. And it's a tricky question for me. And as you might have been able to tell from my earlier remarks, I'm not a huge fan of the lottery. I know I cannot walk into the Connecticut General Assembly and suddenly eliminated. But I think it is perhaps a conflicting message to offer these two programs side by side, but perhaps we can get more and more people putting money into these types of savings accounts and spending less money on the lottery. And if those revenues go down, then so be it. Yeah, but from a state point of view, and the federal government for that matter, if you look at the bond version of this as a state or federal version, then what you're really doing is supplementing the traditional lottery, which is sort of money straight into the cash flow of the state. You're in parallel creating a system which encourages long-term investment in the state. This is most appropriate for a state thinking about long-term capital investments, roads, bridges, education, and so on to have a pool of funds through a bond system that is what they do anyway. This is what we have in finance of bonds and taxes and so on as two separate methods of financing state activities. So it's not really, even though states initially, I think might say, well, wait a minute, this is now competing, we're competing with ourselves. They're not really doing that because it's a different form of investment in the state. It's addressing long-term investment as opposed to cash flow for the state. So I think that in the long run, it makes a lot of sense for the public finance of the state that's already thinking about lotters to diversify in this way into a bond variant of the basic lottery. No, it's the goal of the program, right? The goal of the program is to get families saving so that they can build their own economic security. And that's something that the state very clearly has an interest in doing. Because in the long run, you can see a world where families that are more economically secure, more financially secure, even though they may be relatively low income, could very well be less dependent on public assistance and other forms of the uses of state revenue. Oh, go ahead, yeah. Just real quickly on that, I mean, it could also be in addition from good public policy in terms of the security, the financial security of state residents, what we see in the UK is that, I think that Stewart was also saying it's a lower cost of borrowing for them, essentially. Like they can, if they have, as a public institution, offer savings bonds with a PLS layer that they're not paying interest on, they don't have to borrow as much money from someone else. So from a purely, whatever about the outcome of our residents perspective, this actually just might be a good financial decision for the public entity who's trying to raise cheaper cost of funds for themselves. And the other thing just real quick is if folks are interested in this in our lottery paper out front, we did do a national survey and we're trying to get at, if you had a savings ticket alongside a regular lottery ticket, is this competitive with this take away? And this isn't sort of conclusive and we need a real world example of this and we hope to have one soon. But these aren't the same product and these aren't the same proposition for a lottery customer and they're very different prizes and very different stakes. And we actually believe that they aren't mutually exclusive and they could be side by side and both could be successful. The same way in the UK, you actually have lottery now as well as the premium bond. When premium bond was first introduced, you didn't have lottery, now you have both and both remain successful. So we shouldn't go into this with an either or, right? It's a question of how do you diversify what you're offering? How do you reach consumers? What's good public policy? But we believe all of it can be intertwined successfully. This is obviously a deep area and you sort of scratch and dig more into this, you find more layers to it. I think we're very encouraged to see the growth that's happened across the different states. Thank you for your work doing that. And thank you to the audience for joining us here today for your great questions. And please join me in thanking all of our panelists for a good session. Thank you.