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Is a Bank allowed to provide instant win cards to individuals in a community? The individuals receive the instant win card, scratches the number and then comes to the Bank to reveal what prize the number on the card receives. If a Bank is allowed to provide instant win cards what disclosures must be included?
Section 20(a) of the Federal Deposit Insurance Act prohibits bank participation in a lottery. The definition of lottery involves people paying money for the possibility of receiving a larger amount of money. For more information: https://www.fdic.gov/regulations/laws/rules/1000-2200.html
It is not clear if you program constitutes a lottery or not. Even if the program is permissible under federal law have your counsel check state law.
I am unaware of any disclosures related to this type of activity.
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