Saïd Business School Dean’s Research Drives American Savings Promotion Act
On December 18, 2014, President Obama signed the American Savings Promotion Act (ASPA) into law. The Federal bill grew out of pilot testing and research conducted over the last eight years by Peter Tufano, Dean of Saïd Business School, working in collaboration with Doorways to Dreams (D2D), the social enterprise that he co-founded in 2000 to support the finances of low income Americans by developing innovative financial products and public policies.
The bill removes US federal prohibitions on banks offering Prize Linked Savings (PLS) products, which are savings vehicles where the collective interest of savers is redistributed via a raffle-like draw – similar to National Premium Bonds in the UK.
“My research into household finance and prize linked savings in the UK, South Africa, and the US shows that individuals are willing to give up the certainty of a small payoff from traditional savings accounts for a small chance at a large, potentially life-changing cash prize,” said Tufano.
Tufano’s academic research—working with a number of collaborators—that contributed to this historic change in banking law included a chapter in a 2010 Brookings book that introduced the concept in the context of other savings levers, a 2011 Economics Letters piece that examined the likely consumer demand using market research, and a new working paper documenting the positive savings impact of the South African programme.
Click here to learn more about Dean Tufano and D2D’s influence on this legislation.
