I have been asked to post this by one of our users who was having trouble posting anonymously. Thankful that I never had to face these circumstances while I was active as a bank compliance officer, I ask on the anonymous user's behalf for some ideas on how to handle this rather delicate situation:

"I have an employee who is having a medical procedure done. I walked in the bank this morning and noticed flyers were posted around the bank that her family is helping her by selling hamburger plates to help pay for her medical expeses. Not only are there flyers posted but it is displayed on the monitors at the drive thru. She is also selling tickets for a drawing. If someone could please help me by directing me to regulation this is violating and if anyone has input on how they have handled this type of situation discreetly I would greatly appreciate any feed back. Thank you in advance."

There is no law or regulation that would prohibit such actions. Normally, this is handled in the employee handbook or other employee publication outlining the general rules of the road for working at the bank. This normally carries a "no solicitation" clause within the employee guidelines.

If you do it for one, you are going to be stuck doing it for all.

The "tickets for a drawing" piece of the situation is a violation of the prohibition on a bank conducting or promoting a lottery (or allowing anyone else to do so on the bank premises).

Very interesting. Would it be possible for someone to direct me to the regulation that reads about the drawing being "a violation of the prohibition on a bank conducting or promoting a lottery (or allowing anyone else to do so on bank premises)"? I would like to read up on this.

FDIC https://www.fdic.gov/regulations/laws/rules/1000-2200.html


SEC. 20. PARTICIPATION BY STATE NONMEMBER INSURED BANKS IN LOTTERIES AND RELATED ACTIVITIES.--
(a) PROHIBITED ACTIVITIES.--A State nonmember insured bank may not--
(1) deal in lottery tickets;
(2) deal in bets used as a means or substitute for participation in a lottery;
(3) announce, advertise, or publicize the existence of any lottery; or
(4) announce, advertise, or publicize the existence or identity of any participant or winner, as such, in a lottery.
[Codified to 12 U.S.C. 1829a(a)]
[Source: Section 2[20(a)] of the Act of September 21, 1950 (Pub. L. No. 797), as added by section 3 of the Act of December 15, 1967 (Pub. L. No. 90--203; 81 Stat. 610), effective April 1, 1968; as amended by section 602(a)(51) of title VI of the Act of September 23, 1994 (Pub. L. No. 103--325; 108 Stat. 2290), effective September 23,1994]
(b) USE OF BANKING PREMISES PROHIBITED.--A State nonmember insured bank may not permit--
(1) the use of any part of any of its banking offices by any person for any purpose forbidden to the bank under subsection (a), or
(2) direct access by the public from any of its banking offices to any premises used by any person for any purpose forbidden to the bank under subsection (a).
[Codified to 12 U.S.C. 1829a(b)]
[Source: Section 2[20(b)] of the Act of September 21, 1950 (Pub. L. No. 797), as added by section 3 of the Act of December 15, 1967 (Pub. L. No. 90--203; 81 Stat. 610), effective April 1, 1968]
(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, other than a savings promotion raffle, 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--
(A) a random selection;
(B) a game, race, or contest; or
(C) any record or tabulation of the result of one or more events in which any participant has no interest except for its bearing upon the possibility that he may become a winner.
(3) The term "lottery ticket" includes any right, privilege, or possibility (and any ticket, receipt, record, or other evidence of any such right, privilege, or possibility), of becoming a winner in a lottery.
(4) The term "savings promotion raffle" means a contest in which the sole consideration required for a chance of winning designated prizes is obtained by the deposit of a specified amount of money in a savings account or other savings program, where each ticket or entry has an equal chance of being drawn, such contest being subject to regulations that may from time to time be promulgated by the appropriate prudential regulator (as defined in section 5481 of this title).
[Codified to 12 U.S.C. 1829a(c)]
[Source: Section 2[20(c) of the Act of September 21, 1950, as added by section 3 of the Act of Dec. 15, 1967, (Pub. L. No. 90--203; 81 Stat. 610), effective April 1, 1968; as amended by section 3(c) of the Act of December 18, 2014 (Pub.L. 113--251; 128 Stat. 2889)]

OCC https://www.law.cornell.edu/uscode/text/12/25a


(a) Prohibited activitiesA national bank may not—
(1) deal in lottery tickets;
(2) deal in bets used as a means or substitute for participation in a lottery;
(3) announce, advertise, or publicize the existence of any lottery; [1]
(4) announce, advertise, or publicize the existence or identity of any participant or winner, as such, in a lottery.
(b) Use of banking premises prohibitedA national bank may not permit—
(1) the use of any part of any of its banking offices by any person for any purpose forbidden to the bank under subsection (a), or
(2) direct access by the public from any of its banking offices to any premises used by any person for any purpose forbidden to the bank under subsection (a).
(c) DefinitionsAs used in this section—
(1) The term “deal in” includes making, taking, buying, selling, redeeming, or collecting.
(2) The term “lottery” includes any arrangement, other than a savings promotion raffle, 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—
(A) a random selection;
(B) a game, race, or contest; or
(C) any record or tabulation of the result of one or more events in which any participant has no interest except for its bearing upon the possibility that he may become a winner.
(3) The term “lottery ticket” includes any right, privilege, or possibility (and any ticket, receipt, record, or other evidence of any such right, privilege, or possibility) of becoming a winner in a lottery.

Similar language can be found in the Federal Reserve Act prohibiting state member banks from dealing in lottery tickets, etc.

I echo Randy's comments.

Try and deal first with the solicitation issue, hopefully there is a section in the employee handbook that deals with it and provides an procedure for approval and where you can post things like this. In my experience I've seen things like this limited to posting something in the breakroom.

Regarding the drawing, how are other "posters" and such for the community handled? Do they require Compliance approval? Many times chamber of commerce and other organizations have drawings and the bank doesn't care what compliance says about lotteries and the poster is put in the lobby anyway.

I think not seeking approval first is the biggest issue, now you have to undo what's been done. While I feel it's probably completely inappropriate, you may need to consider the employees role to the customers and if this procedure is something that people in the community know about (some type of serious medical condition?) and may be looking to provide assistance to this person? You may have to consider the type of community this branch is in. No matter what, it needs to be approved by management.

We've had fundraisers for employees for different reasons but they are always done quietly inhouse - no advertising/soliciting customers etc. It's usually selling baked goods, pretzels, etc. We have had an occasional raffle of a donated electronic device but again it is kept within our building (employees only).

The part where it says:

((2) The term “lottery” includes any arrangement, other than a savings promotion raffle, 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—

Does this mean that in order to be called a lottery/raffle they must pay money for tickets? If it is just a random drawing where there is no cost involved to participate then it would not fall under these rules???

If it is just a random drawing where there is no cost involved to participate then it would not fall under these rules???

How do you raise money under that theory??

1. Advertising issue: the material being shown to the public should have been approved by the Compliance Officer.
2. The "drawing" is a lottery and prohibited by federal law. Your state may also have laws that would prohibit some aspect of this drawing.
3. Fund raising for ill employees should be kept within the walls of the organization. We know the need must be great, but you have to take into account the precedent that is being set.
4. Perhaps your bank could set up a benevolent fund that employees could contribute to regularly and then dispense it according to some formula. Just a thought.

Since the "cat is out of the bag", now you have to find a way to reel this back in. No winners here, unfortunately.

We had one of our small branches do this for a fellow employee. Not only did they set up AND ADVERTISE a raffle, the item they sold chances on was .... wait for it ...... a SHOTGUN! After I awoke from my stroke, I could only counsel them on future activities and admonish them NOT to advertise in the newspaper and NOT to have the gun on display in the branch.

We have a guideline that no posters or flyers of any kind can be displayed unless approved by SVP of Marketing. We are overwhelmed at certain times of the year with organizations wanting to post flyers. This type of guideline would eliminate this situation.

Related question here. In the Federal Deposit Insurance Act Sec 20 it defines illegal lottery as, and I somewhat paraphrase, "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". With that being said if the participants are asked to donate a dollar that is given to the food bank for example, and for that dollar they get to spin a wheel that has monetary increments from $1.25-$15.00 which they will receive back as money deposited back into their account at whatever bank they happen to bank at, would this not be ok? Since ALL participants will receive more than they advance this would not be a lottery correct?

Based on your description, I think you are correct.

But why? Where is the money coming from and why don't they just give the money directly to the food bank. Why spend $15 for a $1 donation. There has to be more to this story. You also need to review State law very carefully.

It is a promotion of our new popmoney program, showing the ease in how you can send money to people via popmoney. The participants donate the dollar and then they spin the wheel to see what amount they get back. That money is then sent back to them via popmoney on a mobile device. They provide their phone number or e-mail and we send them the money. Also, I have already consulted our state gaming commission and cleared with them that it would not be considered gambling or an illegal lottery, based off the state's requirements.

It wouldn't fly in our state because you would be required to have an account.

I'm so glad I was intrigued with the title and decided to read this thread - this won it all!