H.R. 3567, which would, in effect, mandate ATM Blocking, has been sucked up into Congress' payroll tax holiday bill along with some other measures. This creates an omnibus-type bill that addresses a number of issues prior to Congress' one-week adjournment for the Presidents Day holiday.
In addition to the mandate to block ATM transactions that allow TANF recipients to access those funds in liquor stores, casinos and strip clubs, the House-Senate conference committee has added language that will trouble EBT program managers and state agencies for some time to come - at least until the dust settles and we can figure out what it all means.
The bill would ensure recipients would have access to funds "...with minimal fees or charges, including an opportunity to access assistance with no fee or charges. The conference agreement also defines electronic benefits transactions (i.e. EBT) as "...the use of a credit or debit card service, automated teller machine, point-of-sale terminal or access to an online system for the withdrawal of funds or the processing of a payment for merchandise or service." Whew.
This raises a lot of questions. Where do I start? First, the bill would require access to funds with minimal fees or charges. That's noble, but who gets to define "minimal?" What's minimal to you could be maximum to me.
Those receiving assistance would have to be able to "access" their funds at no cost. But that is done today through the use of surcharge-free networks or point-of-sale cash-back transactions. So why include it here?
And what about direct deposit? If a TANF recipient has a bank account, no matter how small, and lives in a state that does direct deposit for TANF, does that count as free access?
Perhaps most troubling of all is the definition of EBT. How does the committee define "debit" card? The traditional industry definition of debit card is an electronic card that is linked to a traditional bank account (a so-called DDA account). That's different that a "prepaid" card where the funds are not deposited in a DDA account, but are held by the card issuer. This would cover, for example, state-issued prepaid cards for unemployment or child support payments. But that's not what the bill says. It says debit cards used for electronic benefits transfers are covered. So if a recipient has his TANF funds directly deposited into his DDA account and then accesses the with a debit card associated with that account, it would appear that he can't be charged for any transaction involving those federal funds.
But how would a state even know about those transactions, since it didn't issue the card? And suppose states try to enforce the ban on accessing TANF funds in a liquor store, casino or strip club by penalizing the cardholders? And suppose one such cardholder is penalized for accessing cash from a liquor ATM, presumably to buy liquor. And suppose another TANF recipient has the money directly deposited into his account and then uses his bank card to withdraw the cash to by liquor? Has the EBT cardholder been denied equal protection, since other program participants can get away with misuse of TANF payments but he or she can't?
States would have two years to comply with the blocking requirement and would be required to report
their results to the Secretary of the Department of Health and Human Services. States that fail to adequately block transactions as required by the bill could see their assistance grant shaved by up to five percent.
They say that the drafting of legislation is a lot like making sausage - you don't want to know what goes into it. This bill is more like scrapple. You don't even what to picture what's inside of it.
In addition to the mandate to block ATM transactions that allow TANF recipients to access those funds in liquor stores, casinos and strip clubs, the House-Senate conference committee has added language that will trouble EBT program managers and state agencies for some time to come - at least until the dust settles and we can figure out what it all means.
The bill would ensure recipients would have access to funds "...with minimal fees or charges, including an opportunity to access assistance with no fee or charges. The conference agreement also defines electronic benefits transactions (i.e. EBT) as "...the use of a credit or debit card service, automated teller machine, point-of-sale terminal or access to an online system for the withdrawal of funds or the processing of a payment for merchandise or service." Whew.
This raises a lot of questions. Where do I start? First, the bill would require access to funds with minimal fees or charges. That's noble, but who gets to define "minimal?" What's minimal to you could be maximum to me.
Those receiving assistance would have to be able to "access" their funds at no cost. But that is done today through the use of surcharge-free networks or point-of-sale cash-back transactions. So why include it here?
And what about direct deposit? If a TANF recipient has a bank account, no matter how small, and lives in a state that does direct deposit for TANF, does that count as free access?
Perhaps most troubling of all is the definition of EBT. How does the committee define "debit" card? The traditional industry definition of debit card is an electronic card that is linked to a traditional bank account (a so-called DDA account). That's different that a "prepaid" card where the funds are not deposited in a DDA account, but are held by the card issuer. This would cover, for example, state-issued prepaid cards for unemployment or child support payments. But that's not what the bill says. It says debit cards used for electronic benefits transfers are covered. So if a recipient has his TANF funds directly deposited into his DDA account and then accesses the with a debit card associated with that account, it would appear that he can't be charged for any transaction involving those federal funds.
But how would a state even know about those transactions, since it didn't issue the card? And suppose states try to enforce the ban on accessing TANF funds in a liquor store, casino or strip club by penalizing the cardholders? And suppose one such cardholder is penalized for accessing cash from a liquor ATM, presumably to buy liquor. And suppose another TANF recipient has the money directly deposited into his account and then uses his bank card to withdraw the cash to by liquor? Has the EBT cardholder been denied equal protection, since other program participants can get away with misuse of TANF payments but he or she can't?
States would have two years to comply with the blocking requirement and would be required to report
their results to the Secretary of the Department of Health and Human Services. States that fail to adequately block transactions as required by the bill could see their assistance grant shaved by up to five percent.
They say that the drafting of legislation is a lot like making sausage - you don't want to know what goes into it. This bill is more like scrapple. You don't even what to picture what's inside of it.
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