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#1207959 - 06/25/09 02:55 PM Can an FDIC regulated bank sell raffle tickets?
Gandalf Offline
New Poster

Registered: 01/25/06
Posts: 7
We are struggling with this one. We would like to have an organization sell raffle tickets in our vestibule. The FDIC regs prohibits us from selling lottery tickets. But are raffle tickets really lottery tickets? And the fact that WE are not actually selling them does in make it permissible? This is what we are trying to interpret: FDIC Reg Pertaining to Lottery Tickets

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#1208931 - 06/26/09 04:18 PM Re: Can an FDIC regulated bank sell raffle tickets? [Re: Gandalf]
Gandalf Offline
New Poster

Registered: 01/25/06
Posts: 7
Our compliance consultant replied as follows (Like you, I donít understand the basis for this regulation when the Bank is trying to serve the community, but such as it is, we have to comply):

There are really two parts to this:

∑ Are raffle tickets lottery tickets?

∑ Is the Bankís level of involvement in the process enough to come under the prohibition?





As to the first, the sale of raffle tickets have been consistently viewed by the regulatory as a lottery within the prohibition you cited.



As to the second, even though the bank will not be selling lottery tickets, it is providing space and it could be viewed as being within the ďannounce, advertise, or publicize the existenceĒ prohibition., I have never see this specific issue raised on an exam. However, I can tell you for sure, that even mentioning a non-profit organizationís raffle on a bank web site recently has raised an issue with the regulators.

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#1208948 - 06/26/09 04:33 PM Re: Can an FDIC regulated bank sell raffle tickets? [Re: Gandalf]
BrendaC Offline
Power Poster

Registered: 09/18/01
Posts: 6029
Loc: Sweet Home AL
Bottom line is you CANNOT allow the sale of raffle tickets on the bank property
..."may not permit--
(1) the use of any part of any of its banking offices".

If you want to help out the organization you can contribute a savings bond or other item to be raffled.
_________________________
Life without Jesus is like an unsharpened pencil - it has no point.

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#1208959 - 06/26/09 04:45 PM Re: Can an FDIC regulated bank sell raffle tickets? [Re: Gandalf]
Homestar Offline
Diamond Poster

Registered: 02/08/01
Posts: 2180
Loc: US of A
Originally Posted By: Gandalf
Like you, I donít understand the basis for this regulation when the Bank is trying to serve the community, but such as it is, we have to comply.

I think you should just realize that not everyone is as honest as you and a few bad actors spoil it for everyone.
_________________________
"If you want to tell people the truth, make them laugh, otherwise they'll kill you." ~ Oscar Wilde

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#1209552 - 06/29/09 04:14 PM Re: Can an FDIC regulated bank sell raffle tickets? [Re: Homestar]
EdieT Offline
Member

Registered: 05/04/09
Posts: 75
Loc: PA
We will not allow this on bank property.
They may set up the table on the sidewalk outside the bank.

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#1210466 - 06/30/09 08:32 PM Re: Can an FDIC regulated bank sell raffle tickets? [Re: EdieT]
ltackett Offline
Platinum Poster

Registered: 10/16/02
Posts: 981
We plan to raise money for a local organization that helps abused children. In addition to having bake sales, employees paying for "jean day", we hoped to get an item donated from a local company and sell tickets on a chance to win that item. Am I to understand that this is prohibited by the FDIC?

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#1210527 - 07/01/09 08:40 AM Re: Can an FDIC regulated bank sell raffle tickets? [Re: ltackett]
Skittles Offline
10K Club

Registered: 09/10/02
Posts: 12003
Loc: KY
Yes, that is a raffle and is prohibited.
_________________________
The price of discipline is always less than the pain of regret. ĖNido Qubein

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#1211042 - 07/01/09 06:55 PM Re: Can an FDIC regulated bank sell raffle tickets? [Re: Gandalf]
Richard Insley Online
Power Poster

Registered: 10/26/00
Posts: 7550
Loc: Richmond, VA
Originally Posted By: Gandalf
Like you, I donít understand the basis for this regulation when the Bank is trying to serve the community

If memory serves, this prohibition goes back to the beginning of the FDIC. At that time, the only concern was protecting the life savings of depositors. As is still the case, some depositors would consider a lottery ticket a better "investment" than a deposit in the bank. If the same teller sells both, it encourages behavior that is contrary to the purpose of the FDI Act. Even though raffles for charities don't rob depositors of their life savings, the prohibition was written in the strongest terms possible & the edges stretch far enough to cover anything that looks or smells like a lottery.
_________________________
...gone fishing.

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#1211954 - 07/03/09 11:02 AM Re: Can an FDIC regulated bank sell raffle tickets? [Re: Richard Insley]
Andy Z Online

10K Club

Registered: 10/27/00
Posts: 25230
Loc: On the Net
http://calendar.bollearningconnect.com/main.php?view=event&eventid=1243968900993

You can call it what you want and you can say it is for a good cause, but the ends doesn't justify the means, nor does it change the definition of a lottery.
_________________________
AndyZ CRCM
My opinions are not necessarily my employers.
R+R-R=R+R
Rules and Regs minus Relationships equals Resentment and Rebellion. John Maxwell

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#1213581 - 07/07/09 02:07 PM Re: Can an FDIC regulated bank sell raffle tickets? [Re: Andy Z]
mck401 Offline
Diamond Poster

Registered: 05/05/06
Posts: 1168
Loc: Texas
Has an institution been sited for such participation? A lot of members of our community are NOT happy that we don't particpate in such "fundraising/community events".
_________________________
Work less, play more.....why not????

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#1213674 - 07/07/09 03:28 PM Re: Can an FDIC regulated bank sell raffle tickets? [Re: mck401]
BrendaC Offline
Power Poster

Registered: 09/18/01
Posts: 6029
Loc: Sweet Home AL
Find a different way to participate, such as providing items to be raffled, auctioned, used as door prizes, etc.
_________________________
Life without Jesus is like an unsharpened pencil - it has no point.

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#1903521 - 03/07/14 03:25 PM Re: Can an FDIC regulated bank sell raffle tickets? [Re: Gandalf]
pacar Offline
Gold Star

Registered: 07/24/07
Posts: 317
Resurrecting this:

I'm looking at this definition:
(c) Definitions

As used in this section--

(1) The term "deal in" includes making, taking, buying, selling, redeeming, or collecting.

(2) The term "lottery" includes any arrangement whereby three or more persons (the "participants") advance money or credit to another in exchange for the possibility or expectation that one or more but not all of the participants (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 includes--

Specifically, I'm interested in the phrase "receive by reason of their advances more than the amounts they have advanced".

I just walked through our lobby and discovered that we are selling raffle tickets for a Quilt made by a local Seniors Group. The quilt does not have any monetary value ... it's a quilt. So is the winner really receiving 'more than the amount they advanced'?

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#1903523 - 03/07/14 03:26 PM Re: Can an FDIC regulated bank sell raffle tickets? [Re: Gandalf]
Kathleen B Online

10K Club

Registered: 12/27/00
Posts: 17475
Have you priced quilts?
_________________________
Kathleen Blanchard CRCM "Kaybee"
Lending/CRA/HMDA/Mapping/Consulting
www.kaybeescomplianceinsights.com

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#1903524 - 03/07/14 03:28 PM Re: Can an FDIC regulated bank sell raffle tickets? [Re: Gandalf]
pacar Offline
Gold Star

Registered: 07/24/07
Posts: 317
smile Yes ... but I can't take the quilt to the gas station and buy a soda. smile

I don't want to be the bad-guy (again).

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#1903526 - 03/07/14 03:31 PM Re: Can an FDIC regulated bank sell raffle tickets? [Re: Gandalf]
Kathleen B Online

10K Club

Registered: 12/27/00
Posts: 17475
I am not saying shut it down, but if I buy a ticket for $1 or $5, whatever, and I win the quilt, it is certainly worth more than what I paid. It has a value. I could sell it.
_________________________
Kathleen Blanchard CRCM "Kaybee"
Lending/CRA/HMDA/Mapping/Consulting
www.kaybeescomplianceinsights.com

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#1903528 - 03/07/14 03:35 PM Re: Can an FDIC regulated bank sell raffle tickets? [Re: Gandalf]
pacar Offline
Gold Star

Registered: 07/24/07
Posts: 317
The staff is going to hate me. Ugh.

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#1903546 - 03/07/14 04:17 PM Re: Can an FDIC regulated bank sell raffle tickets? [Re: BrendaC]
BankerAndi82 Offline
New Poster

Registered: 09/12/13
Posts: 20
Loc: Midwest
Brenda C
"Find a different way to participate, such as providing items to be raffled, auctioned, used as door prizes, etc."

Our bank was told this was considered participating in a lottery too unless it was done anonymously


Edited by BankerAndi82 (03/07/14 04:19 PM)

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#1903639 - 03/09/14 08:22 AM Re: Can an FDIC regulated bank sell raffle tickets? [Re: Gandalf]
rlcarey Offline
10K Club

Registered: 07/16/01
Posts: 50035
Loc: Galveston, TX
Plus, who's raffles do you decide to sponsor? Local Seniors Group, PETA (People who Eat Tasty Animals) fund raiser, XYZ Motorcycle Club (raising bail money for Joe)?
_________________________
The opinions expressed are my own, take them or leave them.

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#1903670 - 03/10/14 08:52 AM Re: Can an FDIC regulated bank sell raffle tickets? [Re: BankerAndi82]
John Burnett Offline
10K Club

Registered: 10/27/00
Posts: 30460
Loc: Cape Cod
Originally Posted By: BankerAndi82
Brenda C
"Find a different way to participate, such as providing items to be raffled, auctioned, used as door prizes, etc."

Our bank was told this was considered participating in a lottery too unless it was done anonymously


Your bank was provided erroneous information. "Our bank was told" -- by whom, and did he or she provide any citation to a regulation or law backing up the statement?
_________________________
John S Burnett
BankersOnline.com

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#1903700 - 03/10/14 10:00 AM Re: Can an FDIC regulated bank sell raffle tickets? [Re: Gandalf]
RR Joker Offline
10K Club

Registered: 11/15/02
Posts: 16342
Loc: The Swamp
I don't know about the anonymously part, but in Georgia door prizes are restricted:

'Raffle' means any scheme or procedure whereby one or more prizes are distributed by chance among persons who have paid or promised consideration for a chance to win such prize. Such term shall also include door prizes which are awarded to persons attending meetings or activities provided that the cost of admission to such meetings or activities does not exceed the usual cost of similar activities where such prizes are not awarded.
_________________________
My opinion only. Not legal advice.

You will never see what's inside of me - Five Finger Death Punch

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#1903756 - 03/10/14 11:43 AM Re: Can an FDIC regulated bank sell raffle tickets? [Re: John Burnett]
BankerAndi82 Offline
New Poster

Registered: 09/12/13
Posts: 20
Loc: Midwest
IBA and ABA told us this. ABA said that the Federal Deposit Insurance Act Section 20 is very broad and covers everything. We usually donate to a function where community eateries get together and for the price of a ticket, anyone can sample the different foods. We would donate a basket (other banks did this as well)that said it was donated by us and usually included bank promotional items, that would be part of a silent auction.


Edited by BankerAndi82 (03/10/14 11:51 AM)

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