tag:blogger.com,1999:blog-46130733378369303882024-02-07T05:10:23.741-08:00Payment TrendsUnknownnoreply@blogger.comBlogger42125tag:blogger.com,1999:blog-4613073337836930388.post-39837040951909109802013-07-29T05:00:00.000-07:002013-07-30T10:05:35.490-07:00CFPB Turns Two with a Bang – What Now?<div dir="ltr" style="text-align: left;" trbidi="on">
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The C<a href="http://www.consumerfinance.gov/">onsumer Financial Protection Bureau</a> (CFPB or the
Bureau) hit its second birthday this week in grand style. Has it really been
just two years? I don’t believe I would be in minority in feeling CFPB has been
around much longer given all the <a href="http://www.mofo.com/files/uploads/images/summarydoddfrankact.pdf">Dodd-Frank rules </a>it has cranked out and all
the press it has received over the controversial recess appointment of Rich
Cordray in January 2012. But, who’s counting, right?<o:p></o:p></div>
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Speaking of <a href="http://en.wikipedia.org/wiki/Richard_Cordray">Rich Cordray</a>, his recent formal Senate
confirmation was perhaps the biggest birthday present of all to the Bureau.
Majority Leader Harry Reid (D-NV) had to threaten the Senate with the “<a href="http://blog.constitutioncenter.org/2013/07/in-defense-of-the-filibuster/">nuclear option</a>” (a change of Senate rules to allow “majority” rule) over several
stalled Obama nominees to key administration positions. The Senate was
close to DEFCON 1 before a handful of Republicans told Harry to take his finger
off the button because they would allow votes on the nominees. Cordray was the
first nominee to get confirmed. House and Senate republicans have been pressing
for structural changes to CFPB pretty much after the ink was dry on the
Dodd-Frank Act. Senate Republicans were united in 2012 and 2013 that no CFPB
Director nominee would be confirmed unless the CFPB became a commission (like
the FTC or FCC) and received its appropriations from Congress and not the
Federal Reserve. Two federal courts even called into the question the <a href="http://blogs.wsj.com/washwire/2013/06/24/supreme-court-move-complicates-cordray-confirmation/">“recess” appointment of Cordray</a> as they ruled that President Obama’s recess appointments
to the National Labor Relations Board were unconstitutional. The Supreme Court
even agreed to hear the case in October. All this legal uncertainty is fairly
moot given the Senate’s confirmation (and the Supreme Court’s recent proclivity
to threading the needle on touchy constitutional issues). <o:p></o:p></div>
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But, enough about history. What does the future hold for the
Bureau? I don’t buy quite into the hype by some that the Bureau is coming out
swinging against banks now that Cordray has lost his “recess” tag. I expect the
Bureau will be sensitive and responsive to the concerns from Capitol Hill. It
will certainly be responsive to the Government Accountability Office (GAO) as
it begins to examine its data collection practices. As requested by Sen. Mike
Crapo (R-ID), ranking Republican on the Senate Banking Committee, GAO will
review identity, account and transaction data the Bureau collects during its
supervision of banks or through other direct request. The Bureau claims that
the transaction data is de-linked with any personally-identifiable information.
We’ll see what GAO comes up with (presumably in 2014). <o:p></o:p></div>
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The Bureau also released its updated regulatory agenda
through the end of the year. Expect to see a notice of proposed rule-making on
extending Reg E protections to general-reloadable prepaid cards in addition to
new proposed rules on debt collection and payday loans. I suspect CFPB will
continue to tinker with the Dodd-Frank mortgage rules to take effect in January
2014. It certainly doesn’t want to be tagged with tanking the housing market if
no one can get a loan. If you really want to peer into CFPB’s future, follow
its consumer complaint portal progress reports. CFPB has stated that the trends
it sees through the complaint portals will drive its enforcement and regulatory
agenda. <o:p></o:p></div>
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Industry and CFPB need to work together more than ever to
ensure balance is struck between consumer protection and a healthy financial
services industry. Consumers are hurt if the pendulum swings too hard one way.
Keep checking with this blog for progress reports. <o:p></o:p></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-6751713237766789552013-06-07T11:50:00.001-07:002013-06-07T11:50:10.845-07:00The “Preemption Problem” – How TANF Blocking Could Get Out of Hand<div dir="ltr" style="text-align: left;" trbidi="on">
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It’s been about 15 months since Congress passed a bill that
included a requirement that welfare cash assistance (TANF) be blocked at ATMs and
point-of-sale devices located in liquor stores, casinos and adult entertainment
establishments. The law specified that states submit TANF blocking plans to the
federal government by 2014 or be subject to reductions in the program’s block
grant assistance. <o:p></o:p></div>
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Last April, the U.S. Department of Health and Human Services
sought public to understand the challenges states and vendors may have
implementing these plans. EFTA wrote DHHS and the <a href="http://www.acf.hhs.gov/programs/ofa/">Office of Family Assistance</a> in
June. HHS has yet to publish any final rule.<o:p></o:p></div>
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Congress did not invent the TANF blocking idea. As in most
cases of federal law making, Congress adopted the approach taken in some states
(California notably here). Congress must decide during the legislative process
whether <a href="http://definitions.uslegal.com/p/preemption/">to preempt </a>the states from passing stronger (and in many cases
different) laws than the federal standard. It’s not the chicken and egg debate,
but more of a the ceiling and floor debate. With apologies to Bard William
Shakespeare, to preempt or not to preempt, that is the question. In the case of
TANF blocking, Congress opted to preempt current and future states laws on TANF
blocking. Thus, we have a floor and not a ceiling.<o:p></o:p></div>
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Many state legislatures were already well into their
respective sessions when the TANF blocking law was enacted last year. So, state
legislative action on TANF blocking was light in 2012 at best. However, 2013
has been a different story. State legislatures have had time to prepare for the
issue and may have viewed enacted legislation as an important step in
certifying to HHS that a TANF blocking plan indeed does exist. That’s all well
and good. But, Houston, we are beginning to see a problem.<o:p></o:p></div>
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Certain states have proposed to expand the scope of the
current federal law. This makes compliance and operational execution more and
difficult and costly for companies who contract with states to deliver
Electronic Benefit Transfer (EBT) cards services. Let’s take the case of
Indiana. Last year, Indiana passed a law merely requiring signage at ATMs and
POS terminals that cash assistance could be not be drawn at the following
locations: liquor stores, race tracks, off-track betting sites, casinos, gun
stores, nightclubs, bars and bingo halls.<o:p></o:p></div>
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<span style="mso-spacerun: yes;"> </span>Just recently, Gov.
Mike Pence <a href="http://openstates.org/in/bills/2013/SB559/">signed into law a bill</a> requiring ATM and POS owners, vendors and
third party processors to disable access to EBT benefits at these venues or
suffer stiffen penalties (possibly even criminal penalties). To make matters
more difficult, the Indiana law is giving a very short (and impossible)
timeframe to comply with the law (July 1, 2013). One state greatly expanded the
scope the banned locales, imposed harsher penalties and gave an impossible
compliance timeframe. One state down and 49 more to go.<o:p></o:p></div>
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I’m not predicting Armageddon here. I’m not suggesting that
limiting access to public assistance funds at certain locations isn’t a worthy
debate. Legislators and businesses providing EBT services to states serving
needy individuals need to be active dialogue on what works best and is most
cost-effective. Complying with a patch-quilt of state laws is never easy.
There’s a solution out there and it’s not in arbitrary deadlines and stiff
penalties.<o:p></o:p></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-79500176861120210352013-03-01T11:30:00.003-08:002013-03-01T11:30:48.610-08:00A Landmark Day in Payments-No, not the Sequester<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: "Arial","sans-serif"; font-size: 11.0pt;">Mandatory budget cuts, known as <a href="http://en.wikipedia.org/wiki/2013_Sequestration">the sequester</a>,
are scheduled to go into effect later today.<span style="mso-spacerun: yes;">
</span>While this is dominating the news, another issue of importance to EFTA
members also goes into effect.<span style="mso-spacerun: yes;"> </span>Beginning
today <b style="mso-bidi-font-weight: normal;">ALL</b> federal benefit payments
will be made electronically, as the government will cease to make benefit
payments by check. <o:p></o:p></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4QhedZI8ybhMLZPku1ZwTN0BgWkz7nN-4kAJiAybKCevzsshQijChHCqjcdN4h9-9RkLlJnhw6JgwWwVYB9PZZj5xtkaRKpgGvX6JSBQGNbZtX8smdc6GHqLDs1nr5WUkBf_PsnQ14cY/s1600/Treasury.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="134" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEi4QhedZI8ybhMLZPku1ZwTN0BgWkz7nN-4kAJiAybKCevzsshQijChHCqjcdN4h9-9RkLlJnhw6JgwWwVYB9PZZj5xtkaRKpgGvX6JSBQGNbZtX8smdc6GHqLDs1nr5WUkBf_PsnQ14cY/s200/Treasury.jpg" width="200" /></a><span style="font-family: "Arial","sans-serif"; font-size: 11.0pt;">In December 2010, Treasury adopted a <a href="http://fms.treas.gov/news/press/electronic_benefits_rule.html">final rule</a> to gradually end the practice of issuing paper checks for federal benefit
payments. In May 2011, all people newly applying for benefits had to opt for
either direct deposit or Treasury’s recommended prepaid card (<a href="http://www.usdirectexpress.com/edcfdtclient/index.html">DirectExpress®</a>).<span style="mso-spacerun: yes;"> </span>Benefit programs at issue here are: Social
Security, Supplemental Security Income, Veterans Affairs, Railroad Retirement,
Office of Personnel Management and Department of Labor (Black Lung).<o:p></o:p></span></div>
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<span style="font-family: "Arial","sans-serif"; font-size: 11.0pt;">Other important federal benefit programs are
not affected directly by the Treasury mandate but have already made great
strides in eliminating the issuance of paper checks. These are <a href="http://www.fns.usda.gov/snap/">Supplemental Nutrition Assistance Program</a> (SNAP), formerly known as food stamps (Agriculture
Department), <a href="http://www.hhs.gov/recovery/programs/tanf/index.html">Temporary Assistance for Needy Families (</a>TANF) (Health and Human
Services) and <a href="http://www.dol.gov/dol/topic/unemployment-insurance/index.htm">Unemployment Insurance</a> (Labor).<o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: 12.0pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 11.0pt;">Treasury
has established a<a href="http://www.godirect.org/"> website</a> that includes more
information on the March 1 deadline. <o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: 12.0pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 11.0pt;">Returning
the issue of sequestration, its impact on the financial services industry and
EFTA members ought to be minimal. The Federal Reserve, FDIC and OCC are all
exempt from budget cuts. Thus, bank examinations and most rule-making should
not be impeded. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: 12.0pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 11.0pt;">Although
the Consumer Financial Protection Bureau (CFPB) receives its funding from the
Federal Reserve, according to a February 22 article in The Hill newspaper, the
CFPB will face cuts of $34M from its $448M budget. On the program front, SNAP
and TANF are exempted from automatic cuts but not the Women, Infant &
Children (WIC) program. <o:p></o:p></span></div>
<div style="margin-bottom: .0001pt; margin-bottom: 0in; margin-left: 0in; margin-right: 0in; margin-top: 12.0pt;">
<span style="font-family: "Arial","sans-serif"; font-size: 11.0pt;">Sequestration
issues could be addressed in March when Congress addresses the continuing resolution
to fund the government through the end of the fiscal year (September 30, 2013). Never a
dull moment in our nation’s Capitol.<o:p></o:p></span></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-63674794666386091142013-02-08T07:47:00.000-08:002013-02-08T07:47:47.571-08:00Handicapping the CFPB in 2013<div dir="ltr" style="text-align: left;" trbidi="on">
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2013 began with a bang for the <a href="http://www.consumerfinance.gov/">Consumer Financial Protection Bureau</a>. In January, the Bureau released several mortgage-related final rules as
mandated by the <a href="http://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_Reform_and_Consumer_Protection_Act">Dodd-Frank Act. </a>The <a href="http://video.cnbc.com/gallery/?video=3000134004">mortgage industry</a> has been in a mad rush to
put together webinars to detail ability-to-repay, appraisal reform and
high-cost mortgage requirements. It is not an exaggeration to note these
mortgage rules consumed much of the Bureau’s bandwidth in its brief existence. <o:p></o:p></div>
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So, just as the Bureau comes up for air, it gets rocked by
an somewhat related court case concerning another federal agency, the <a href="http://online.wsj.com/article/SB10001424052970203513604577141411919152318.html">National Labor Relations Board.</a> How are the two agencies connected by this court case?
Let’s hit the rewind button.<o:p></o:p></div>
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It’s no deep Washington secret that current presidents are
having a more difficult time getting various federal nominees through the US
Senate. It’s also no secret that modern presidents have utilized “recess”
appointments more and more (as permitted by the U.S. Constitution). Enter the
controversial CFPB and the quest to have the Senate confirm a Director as
required by Dodd-Frank. The Bureau existed for almost 18 months without a
confirmed Director. <a href="http://www.consumerfinance.gov/leadership-calendar/">Elizabeth Warren</a> ran the CFPB during its incubation period as
a special advisor to the President. Having a director in place was important to
the Bureau because it would assume certain authority (such as the authority to
supervise non-bank entities like debt collectors and credit bureaus) only with
a confirmed Director. <o:p></o:p></div>
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It became very apparent to President Obama and others the
Senate would not have 60 votes necessary to bring the nomination of Elizabeth
Warren to the Floor for a vote. In 2011, President Obama nominated former Ohio
Attorney General <a href="http://www.nytimes.com/2012/01/05/us/politics/richard-cordray-named-consumer-chief-in-recess-appointment.html?pagewanted=all">Rich Cordray</a> to be the CFPB Director. The Senate Banking
Committee approved Cordray’s nomination out of committee, but many Republican senators wanted to consider structural changes to the CFPB before moving on
Cordray’s nomination. For example, altering the Bureau from control by a single
Director to a five-member commission. And making the Bureau subject to <a href="http://overlawyered.com/2013/02/the-self-funding-unaccountable-cfpb/">annual Congressional appropriations</a> versus receiving its funding from the Federal
Reserve. Senate Democrats believe the Bureau is just fine as Dodd-Frank created
it, so Cordray’s nomination was at a stalemate in the late stages of 2011.<o:p></o:p></div>
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On January 4, 2012, President
Obama rolled the dice. Believing the Senate was in “recess,” the President
<a href="http://www.americanthinker.com/2013/02/unconstitutional_recess_appointments_extend_beyond_nlrb.html">appointed</a> Cordray as the director of the CFPB. At the same time he made recess
appointments of three nominees to the NLRB. The legal community hit an uproar
shortly thereafter on both sides of the issue. In April 2012, a Washington
state-based company, <a href="http://www.bakerlaw.com/alerts/noel-canning-v-nlrb-the-decision-its-potential-impact-and-the-future-of-the-national-labor-relations-board-2-4-2013/">Noel Canning</a>, was the lead plaintiff in the case against
the Administration’s NLRB recess appointments. In January of this year the U.S.
Circuit Court of Appeals (DC) unanimously<a href="http://www.mondaq.com/unitedstates/x/220014/employee+rights+labour+relations/Noel+Canning+v+NLRB+DC+Circuit+Holds+NLRB+Recess+Appointments+Unconstitutional"> ruled against President’s Obama recess appointments to the NLRB</a>. <o:p></o:p></div>
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The three-judge panel declared
the Senate remained in “pro forma” sessions when the appointments occurred and
was not technically in recess. The Obama Administration announced its intention
to appeal the ruling to the U.S. Supreme Court. The NLRB decision called into
question the validity of Richard Cordray’s recess appointment to be the CFPB
Director. The Cordray question is being addressed in a separate lawsuit still
pending before another court. On January 24, 2013, President Obama announced
his decision to re-nominate Cordray as CFPB Director subject to Senate
confirmation. Congress will consider legislation again in 2013 to alter the
Bureau’s structure (five-member commission as opposed to a single director) and
subject the Bureau to annual Congressional appropriations. <o:p></o:p></div>
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So, where does this leave the
CFPB in 2013? I doubt the Bureau will be affected much at all in the short
term. It will continue on with its examination of banks and non-banks. It will
take some high-profile enforcement actions. It will put forth some challenging
proposed rules on overdraft protection and general purpose prepaid cards. Even
if the district court decides Cordray’s appointment was unconstitutional
sometime in 2013, the appeals process could take years. Will the court strike
down all the Bureau actions and rules taken while Cordray served as Director?
And, what of the fate of Cordray? This is the biggest unknown. Will the Senate
confirm him without any changes to the Bureau itself? Does he leave at the end
of 2013 as his recess appointment expires and Obama puts forth another nominee?<o:p></o:p></div>
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If you have answers to these
questions, go buy a lottery ticket quickly.<o:p></o:p></div>
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Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-85884235332253061982013-01-22T10:44:00.001-08:002013-01-22T10:44:35.996-08:00<div dir="ltr" style="text-align: left;" trbidi="on">
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<span class="Apple-style-span" style="font-family: inherit;">Yet another state is moving to block the access and use of TANF benefits. Oklahoma State Sen. Rob Standridge has introduced a bill that mirrors the 2010 federal law that restricts were TANF EBT benefits can be accessed or used. Commonly called welfare or public assistance, TANF is the federal program that provides cash subsidies to eligible families. The bill would also limit where a range of other state cash programs also delivered on the state EBT card could be accessed.</span></div>
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<span class="Apple-style-span" style="font-family: inherit;"><br /></span></div>
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<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEggOKMKtI_C17-YXDrEerEo5hzWSYFlb_rdsN2jN__estCKM2EJPMiBVEsVDoXkbhqscm6LBWa8SFW4_NhV-TbRNxRrfg3CviENCXiHaRPcyoDYobT6PLN4YOPg67fQqGL652isytdPDEGx/s1600/TANF+(SMALL+JPEG).jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><span class="Apple-style-span" style="font-family: inherit;"><img border="0" height="195" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEggOKMKtI_C17-YXDrEerEo5hzWSYFlb_rdsN2jN__estCKM2EJPMiBVEsVDoXkbhqscm6LBWa8SFW4_NhV-TbRNxRrfg3CviENCXiHaRPcyoDYobT6PLN4YOPg67fQqGL652isytdPDEGx/s200/TANF+(SMALL+JPEG).jpg" style="cursor: move;" width="200" /></span></a></div>
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<span class="Apple-style-span" style="font-family: inherit;">Like the federal legislation the Oklahoma bill would prohibit TANF EBT benefits in liquor stores, casinos and "[a]<span class="Apple-style-span">ny retail establishment which provides adult-oriented entertainment in which performers disrobe or perform in an unclothed state for entertainment." </span></span></div>
</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-25878922359624396452013-01-11T15:56:00.001-08:002013-01-11T15:59:59.490-08:00Welfare Fraud: Let's Get the Story Right<div dir="ltr" style="text-align: left;" trbidi="on">
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By now you’ve probably heard or read the news stories about
the use of state Electronic Benefits cards in vice locations like liquor
stores, gaming halls, and strip clubs. <a href="http://www.billo'reilly.com/">Bill
O’Reilly</a> of <a href="http://www.blogger.com/"><span id="goog_1362995820"></span>Fox News,<span id="goog_1362995821"></span></a> the <a href="http://www.nypost.com/p/news/local/poor_some_ugar_on_me_0Hq1d3iPnvj2RwpsEDS7MN">New York Post<i style="mso-bidi-font-style: normal;"> </i></a>the <i style="mso-bidi-font-style: normal;"><a href="http://www.nationalreview.com/corner/337107/making-it-rain-club-taxpayer-dollars-andrew-johnson">National Review</a> </i>and influential
blogger <a href="http://michellemalkin.com/2013/01/11/ebt-abuse-the-cash-for-drunkards-program/">Michelle Malkin</a> have all weighed in on
this misuse of taxpayers’ dollars this week.<o:p></o:p></div>
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Let me say from the start, I think it’s reprehensible that
an adult would take money intended to help poor children—to provide clothing,
shelter and the necessities of life—and use that cash for their own
gratification-booze, broads and bingo.<o:p></o:p></div>
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But to read or see the stories this week you would think
that 435 Congressmen, not to mention countless staff in multiple executive
agencies, the White House, states, contractors and program regulators neither
knew nor cared about what was going on. Nothing could be further from the
truth. <o:p></o:p></div>
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The <a href="http://www.efta.org/">Electronic Funds Transfer
Association</a> and its <a href="http://www.electronicbenefitstransfer.org/">eGovernment
Payments Council</a> have worked diligently with various government agencies
over an extended period of time to solve this problem. Here’s the backstory you
didn’t hear from the media this week:<o:p></o:p></div>
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In December 2011 EFTA and eGPC representatives met with the <a href="http://www.gao.gov/">General Accountability Office</a> to define the
problem of misuse of welfare funds and talk about what solutions would be
practical in solving it.<o:p></o:p></div>
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In January 2012 eGPC launched a survey of the 50 states to
determine the extent of the problem and steps that states had taken to resolve
it, since states are empowered by law to administer the electronic benefits programs.<o:p></o:p></div>
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In February 2012 eGPC began work on a white paper, <i style="mso-bidi-font-style: normal;"><a href="http://www.efta.org/currentissues/BLOCKI~1.PDF">Restricting Access to Tanf Funds at Specific Merchant Locations</a>. </i>Tanf is the acronym for the program that distributes
cash subsidies to poverty-stricken families.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
Also, in February Congress passed, and the president signed,
the <a href="http://www.gpo.gov/fdsys/pkg/BILLS-112hr3630enr/pdf/BILLS-112hr3630enr.pdf">Middle
Class Tax Relief and Job Creation Act</a>. <span style="mso-spacerun: yes;"> </span>Section 4004 of that bill specifically made
accessing or using Tanf benefits in liquor stores, casinos or strip clubs
illegal.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
On April 17 of last year EFTA met with regulators from the <a href="http://www.dhhs.gov/">Department of Health and Human Services</a>, the
federal agency in charge of the Tanf program to discuss how DHHS would work
with states to enforce the law. Chairing the meeting was <a href="http://www.acf.hhs.gov/about/leadership/mark-greenberg">Mark Greenburg</a>,
Deputy Assistant Secretary for Policy, Administration for Children and
Families. ACF is the branch of DHHS responsible for Tanf.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
A week later, EFTA hosted a webinar on the issue to explain
to explain the new law and what states could do to comply with it. Mr.
Greenburg, who would be in charge of regulating states’ compliance with the law,
participated in the webinar, a sign that DHHS considered this a serious
regulatory matter.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
On April 25, 2011 DHHS published a request for public comment
on the new law and how states should go about enforcing it. <o:p></o:p></div>
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<br /></div>
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Two days later eGPC released <i style="mso-bidi-font-style: normal;">Restricting Access to TANF Funds at Specific Merchant Locations.</i><o:p></o:p></div>
<div class="MsoNormal">
In May, the eGPC conducted another survey of states, this
time to gauge exactly the extent of the problem on a state level.<o:p></o:p></div>
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<br /></div>
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On June 4, 2012 EFTA, on behalf of itself and its
eGovernment Payments Council, responded to DHHS’ request for public comment
with a 12-page reply. The comment letter included the results of the May survey
of states, technical information, and recommendations on how to best enable
compliance with Section 4004.<o:p></o:p></div>
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In addition, scores of interested groups, companies and
individuals submitted commentary to DHHS on compliance with Section 4004.<o:p></o:p></div>
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<br /></div>
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Finally, in July of last year the GAO issued its long-awaited
report, <i style="mso-bidi-font-style: normal;"><a href="http://www.gao.gov/assets/600/592787.pdf">Tanf Electronic Benefit Cards: Some
States Are Restricting Certain TANF Transactions, but Challenges Remain</a>.</i><o:p></o:p></div>
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<i style="mso-bidi-font-style: normal;"><br /></i></div>
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Since then DHHS regulators have been engaged in the federal
regulatory process: drafting regulations to ensure compliance with the law,
reviewing them, putting them out for public comment one last time, and issuing
the final regulations. This isn’t bureaucracy. It is part of our system of getting
laws enacted and enforced in a fair, transparent and democratic way. I’m sure
enactment of laws is faster and easier in Cuba or China. <o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
So images of pole dancing, cheap liquor and slot machine
tendonitis <span style="mso-spacerun: yes;"> </span>may make for good copy, but
they do very little to inform the debate on welfare fraud. And while most sane
people want these tax dollars spent the way Congress intended them, stories of
Tanf-financed strip trips do nothing to advance that cause.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Next time one of these stories comes up let’s hope the media
takes 20 minutes to dig in and find the real backstory.<span style="mso-spacerun: yes;"> </span><o:p></o:p></div>
</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-78111200727753767682012-10-17T04:11:00.002-07:002012-10-17T04:11:42.791-07:00Welfare Card Restrictions Redux<div dir="ltr" style="text-align: left;" trbidi="on">
An update on the status of implementing restrictions on where and how EBT payment cards used for the federal/state TANF program, known colloquially as welfare, has been posted at the EFTA's eGovernment Payments Council website, <a href="http://www.electronicbenefitstransfer.org/">www.electronicbenefitstransfer.org</a>, You can access the information there or by clicking this<a href="http://www.electronicbenefitstransfer.org/wall.html"> link</a>.</div>
Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-4613073337836930388.post-54088703958412841162012-10-16T13:35:00.001-07:002012-10-16T13:35:47.194-07:00CFPB Update<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
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The 112<sup>th</sup> Congress may be winding down, but the
<a href="http://www.google.com/search?client=safari&rls=en&q=consumer+financial+protection+bureau&ie=UTF-8&oe=UTF-8">Consumer Financial Protection Bureau </a>(CFPB) keeps chugging. Before Congress
scurried off home for electioneering in September, CFPB Director <a href="http://www.consumerfinance.gov/the-bureau/about-rich-cordray/">Richard Cordray </a>paid a visit to both the <a href="http://banking.senate.gov/public/">Senate Banking Committee</a> and H<a href="http://financialservices.house.gov/">ouse Financial Services Committee</a> for a biannual update on the Bureau’s activities. House
Financial Services Committee Chairman <a href="http://bachus.house.gov/">Spencer Bachus</a> (R-AL) even quipped that
Director Cordray “made some news” during his appearance on September 20. Yes,
it’s news when an Administration official appears before Congress and says
something of interest.</div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<table cellpadding="0" cellspacing="0" class="tr-caption-container" style="float: left; text-align: left;"><tbody>
<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiteYTILMT_CrqGeFOr-STBRt681ZcwFBYUFWdKSgpOK31APYaG5Q8CAPhdPy5wmc1y_Z6SBtFxP3YiwReVUV4Lxr9xaep6PmeUNNGMOXr33vpuxV0D1Vs_tMdA4an6PfYpmCehfo6uy_E/s1600/CFPB+Logo.bmp" imageanchor="1" style="clear: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="192" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiteYTILMT_CrqGeFOr-STBRt681ZcwFBYUFWdKSgpOK31APYaG5Q8CAPhdPy5wmc1y_Z6SBtFxP3YiwReVUV4Lxr9xaep6PmeUNNGMOXr33vpuxV0D1Vs_tMdA4an6PfYpmCehfo6uy_E/s320/CFPB+Logo.bmp" width="320" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">The Consumer Financial Protection Bureau is poised to<br />issue two important proposed rules on overdraft<br />protection and prepaid cards.</td></tr>
</tbody></table>
<div class="MsoNormal">
What did Cordray say of interest? At issue is the 2009 <a href="http://en.wikipedia.org/wiki/Credit_CARD_Act_of_2009">CARD Ac</a>t’s “ability to pay” rule. The Federal Reserve Board had responsibility for
the implementing this provision of the CARD Act (the CFPB had not existed at
this time). The Board created a uniform standard requiring all consumers to
demonstrate “an independent ability to repay.” The Board’s rule took effect
October 1, 2011 and almost immediately Congress began asking questions on the
rule’s impact on stay-at-home spouses and their ability to obtain credit.
<a href="http://en.wikipedia.org/wiki/Dodd%E2%80%93Frank_Wall_Street_Reform_and_Consumer_Protection_Act">Dodd-Frank</a> gave the CFPB rule-making authority over <a href="http://www.fdic.gov/regulations/laws/rules/6500-1400.html">Regulation Z</a> (Truth in
Lending). At another House Financial Services Committee hearing during the
summer, <a href="http://www.linkedin.com/pub/gail-hillebrand/4/b18/661">Gail Hillebrand </a>of the CFPB did not appear very sympathetic to opening
up the rule again. But Cordray believe enough evidence had been produced to
warrant a new rule that would disadvantage stay-at-home spouses who may ample
“household income” to secure credit. CFPB will likely issue the revised rule
for public comment later this year or early 2013.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
Senate and House leaders also expressed concerns with CFPB’s
final rule on international remittance transfers (Sec. 1073 of Dodd-Frank).
Several House members wrote Cordray in August asking for a delay in the
effective date (February 2013) while the CFPB studies its impact on consumers.
The CFPB’s rule on international remittance transfers required several
disclosures to be made to consumers including exchange rates and fees charged
by other entities and taxes to be charged by foreign governments. The only
relief CFPB has given to exempt those financial institutions providing less
than 100 remittances annually from the new disclosure rules. I do not expect
this will be the last we hear of this issue. How far will consumer choice be
limited as institutions exit the business because compliance requirements are
not financially viable? Stay tuned.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
Looking ahead to 2013, the CFPB is poised to issue two
important proposed rules on overdraft protection and prepaid cards. EFTA has
provided comment to the Bureau on both subjects in 2012 as part of an Advanced
Notice of Proposed Rule-Making. Gov. Mitt Romney also called out the Bureau for
slow progress on issuing rules on qualified mortgages. Expect some busy beavers
in the hallways and offices of the CFPB in the weeks and months ahead.<o:p></o:p></div>
</div>
Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-4613073337836930388.post-5498438821263929222012-10-05T11:59:00.000-07:002012-10-05T11:59:13.252-07:00Choppy Waters Ahead for Interchange<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="MsoNormal">
<span class="Apple-style-span" style="font-family: inherit;">October 1 marked
the one-year anniversary of the <a href="http://www.nerdwallet.com/blog/banking/durbin-amendment-explained/">Durbin Amendment’</a>s limitation on the amount
large financial institutions ($10 billion or greater in assets) can collect in
interchange (24 cents) for debit card transactions. Government agencies and
industry typically wait several years for an important regulation to sort
itself out in the marketplace. But, there’s nothing typical about the Durbin
Amendment and one really needs a scorecard to understand who’s on first and
what’s on second.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="separator" style="clear: both; text-align: center;">
<object width="320" height="266" class="BLOGGER-youtube-video" classid="clsid:D27CDB6E-AE6D-11cf-96B8-444553540000" codebase="http://download.macromedia.com/pub/shockwave/cabs/flash/swflash.cab#version=6,0,40,0" data-thumbnail-src="http://3.gvt0.com/vi/3hu_nXz7Ys8/0.jpg"><param name="movie" value="http://www.youtube.com/v/3hu_nXz7Ys8&fs=1&source=uds" /><param name="bgcolor" value="#FFFFFF" /><param name="allowFullScreen" value="true" /><embed width="320" height="266" src="http://www.youtube.com/v/3hu_nXz7Ys8&fs=1&source=uds" type="application/x-shockwave-flash" allowfullscreen="true"></embed></object></div>
<div class="MsoNormal">
<span class="Apple-style-span" style="font-family: inherit;">This week,
retailers and merchants argued in <a href="http://www.cutimes.com/2012/10/02/federal-judge-to-hear-arguments-about-debit-interc?ref=hp">DC federal court</a> that the <a href="http://www.federalreserve.gov/newsevents/press/bcreg/20110629a.htm">Federal Reserve Board’s final rule </a>implementing the Durbin Amendment completely missed
Congressional intent. The Durbin Amendment instructed the FRB to set debit
interchange rates at par with the cost of clearing an electronic check and that
it be “reasonable and proportional” to cost of processing the transaction. The
FRB initially proposed to the set the rate at seven cents. But, after a public
comment period, the Board settled on 21 cents with an ad valorem and fraud
adjustment (effectively 24 cents). Thus, the <a href="http://www.mercatoradvisorygroup.com/images/durbin_analysis.pdf">merchants and retailers </a>want the
Board to start anew. In the past, courts have been reluctant to take this type
of action under the Administrative Procedures Act. It is difficult to predict
when the court will issue a ruling. And, expect the losing party to appeal.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span class="Apple-style-span" style="font-family: inherit;">Meantime, in New
York, retailers and merchants are <a href="http://www.nytimes.com/2012/08/09/business/smallbusiness/visa-and-mastercard-settle-lawsuit-but-merchants-arent-happy.html?pagewanted=all&_r=0">throwing cold water</a> on a $7.5 billion
proposed settlement with Visa and MasterCard on credit card interchange. The
proposed settlement was agreed to in July and must be blessed by a judge before
taking effect. Even <a href="http://youtu.be/SfNDdy-09Uc">Senator Durbin</a> took the Senate Floor to suggest the
proposed settlement was a grand give-away to the Visa, MasterCard and the
banks. The proposed settlement would allow merchants to “surcharge” customers
using credit cards as well as temporarily reducing interchange rates. Durbin,
the American Bankers Association and the Retail Industry Leaders Association
all traded letters to excoriate one another. It’s getting both nasty and
personal.<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span class="Apple-style-span" style="font-family: inherit;">Back in
Washington,<a href="http://www.businessweek.com/smallbiz/running_small_business/archives/2009/10/merchants_seek.html"> retailers are boasting</a> in the press that Congress is ready to take
on credit card interchange reform. The financial services community isn’t so
sure given the bruising battle over the original Durbin Amendment in 2010 and
the effort to repeal it in 2011 (unsuccessful obviously). Will Congress ever
touch credit card interchange? Check back with me after the November elections.
<o:p></o:p></span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span class="Apple-style-span" style="font-family: inherit;">As long as Dick
Durbin remains a US Senator and as long as debit and credit card interchange
rates remain above zero, the financial services industry needs to be vigilant
on Capitol Hill and the media about the value of electronic funds
transfer (safe, secure and fast). And, EFT networks require investments to
maintain and grow. </span><span class="Apple-style-span" style="font-family: 'Bell MT', serif;"><o:p></o:p></span></div>
</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-70529432669379975682012-09-12T09:40:00.000-07:002012-09-12T09:40:00.397-07:00Examining Social Security's Electronic Payment Program<div dir="ltr" style="text-align: left;" trbidi="on">
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<span class="Apple-style-span" style="font-family: 'Times New Roman', serif; font-size: 13px;">The Subcommittee
on Social Security of the House Ways and Means Committee scheduled a hearing on
Wednesday, Sept. 12 to take a look at the impact on Social Security payees of
direct deposit of benefits. Among the topics on the table were exemptions from
the mandatory electronic payment requirement and the fraud experience following
the electronic payment mandate. The scheduled witness list was short and
included Margot Saunders of the National Consumer Law Center and
representatives of the Social Security Administration.</span></div>
<div class="MsoNormal">
</div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;"><br /></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;">Before we look
into the issues before the Subcommittee, a little history is in order. In 1996
Congress passed the Debt Collection Improvement Act. The DCIA required all
federal payments, including Social Security benefits, to be made through
electronic funds transfer (EFT) beginning in January 1999. The law gave
broad authority to the Treasury Dept. to grant so-called hardship waivers that
would allow Social Security payees to continue receiving checks rather than
electronic payments. That ultimately proved the law’s undoing.<o:p></o:p></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;"><br /></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;">To implement the
law, Treasury<span style="mso-spacerun: yes;"> </span>launched a program dubbed “EFT99.”
The goal of the program was to meet the mandate of the DCIA to convert Social
Security and other benefit programs to electronic payment by 1999. To do this
Treasury contracted with a number of financial institutions to issue EFT99
debit cards that Social Security payees without a deposit account could obtain at
a participating financial institution in order to access their benefits.<o:p></o:p></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;"><br /></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;">But perhaps
EFT99 was a little too far in front of the electronic payment tsunami we’ve
seen over the last decade. In 1999, shortly before the deadline for converting
to electronic payments, Congress bowed to pressure on the mandatory nature of
the program. As a result Treasury then instituted a program of self-certifying
exemptions from the electronic payment requirement.<span style="mso-spacerun: yes;"> </span>In effect, the “mandatory” program became an
opt-in, rather than an opt-out, program. Banks that had expressed an interest
in participating in EFT99 folded their cards and left the table. The opt-in program
left them no way to evaluate the risk or the rewards of participating in the
government’s program. <span style="mso-spacerun: yes;"> </span>Social Security
beneficiaries who wanted to participate had limited access to banks that would
issue the EFT99 cards. The program foundered, despite Treasury’s game attempts
to save it through advertising and outreach to payees.<o:p></o:p></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;"><br /></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;">In 2001 the Government
Accountability Office flatly observed that no amount of effort could make the
program effective. Treasury pulled the plug. <o:p></o:p></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;"><br /></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;">I bring up EFT99
as a cautionary tale of what happens when legislators or regulators bend to the
will of parochial interests at the expense of the public at large. In 2005
Treasury attempted a reset of electronic payment of social security with the
launch of the “Direct Express” campaign targeted once again at Social Security
payees to emphasize the benefits of electronic payment. In 2008 Treasury launched
the <span style="mso-bidi-font-style: italic;">Direct Express</span>® <span style="mso-bidi-font-style: italic;">Debit MasterCard</span>. Following the
successful example of state electronic benefits transfer projects, Treasury
contracted with one bank to handle the program. However, issuers of private
label prepaid cards can participate in the program, as long as those card
programs meet Treasury’s standards.<o:p></o:p></span></div>
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<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;"><br /></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;">Direct Express
is a reloadable, debit card that allows payees to receive their Social Security
allotments on an electronic card, even if they don’t have a bank account.
Payees can use the card wherever its brand is accepted. They can also get cash
at ATMs or by requesting cash back when they make a purchase with the card.
<o:p></o:p></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;"><br /></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;">After 16 years
of trying, the Direct Express card program has allowed the federal government to
finally reduce the government’s cost of check processing, estimated to be $125
million, according to Saunders’ written testimony. But success always has its
skeptics. <span style="mso-spacerun: yes;"> </span>Critics have blasted the
program for its hard-nose approach to minimizing the remaining number of check
payments, for allowing debit card providers other than the contracted bank into
the program, and for allegations of fraud and theft of payees’ identities. <o:p></o:p></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<br /></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;">In her prepared
testimony Saunders generally praised the Go Direct program for its “laudable
goal of saving money, saving trees and improving the security of the delivery
of federal benefits.” However, she testified that the program needs “an
articulated waiver procedure” for those payees for whom electronic payment won’t
work. This could be because of a disability or geography. In fact, previous
posts to this column have explained the hardships that the Department of Health
and Human Services’ new restrictions on TANF EBT transactions might cause in
some geographic areas.<o:p></o:p></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;"><br /></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;">When Treasury’s
final regulations become effective next year only payees 92 years old and older
and those who live in areas where electronic payment infrastructure is not
convenient will be allowed to continue receiving paper checks. I don’t have any
problem with those parameters. Frankly, I think there are a lot of people who
are 70 years short of their ninety-second birthday who should probably think
twice about having a debit card. But Saunders raises another interesting issue:
the cumbersome, bureaucratic procedures for requesting a waiver.<o:p></o:p></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;"><br /></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;">Her testimony outlined
the waiver process: Call and have a chat with a customer service rep. Then
articulate exactly why you need a waiver. Then, once in hand, fill out the
form. Take the completed form and find a notary to stamp it. Then mail it off
to the Social Security Administration. Then wait.<span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;"><span style="mso-spacerun: yes;"><br /></span></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;">It’s not beyond
possibility that a ninety-something year-old payee might get a waiver out of
this world before she gets a waiver out of the Direct Express program. <o:p></o:p></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;"><br /></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;">There is a line
between an efficient program and a bureaucratic one. And that line isn’t real
fine. In fact, it’s pretty easy to see. I could never support any changes to
the Direct Express program that results in another EFT99 opt-in fiasco. But Direct
Express is hardly the camel’s nose under the tent flap. And it is nothing like
EFT99. It is a well-conceived, well executed card program. Having a reasonable,
well-articulated exception policy and an efficient adjudication process for
waiver requests seems reasonable, provided it does not impact the objectives or
ROI of the program. <span style="mso-spacerun: yes;"> </span><o:p></o:p></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;"><span style="mso-spacerun: yes;"><br /></span></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;">If the waiver
process somehow starts reminding observers of EFT99, Treasury can always
tighten ratchet down on requirements. It is Social Security and the churn in
the program is not unsubstantial. <o:p></o:p></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;"><br /></span></div>
<div class="MsoNormal" style="mso-margin-bottom-alt: auto; mso-margin-top-alt: auto;">
<span style="font-family: "Times New Roman","serif"; font-size: 10.0pt;">That’s my take.
What’s yours?<br style="mso-special-character: line-break;" />
<!--[if !supportLineBreakNewLine]--><br style="mso-special-character: line-break;" />
<!--[endif]--><o:p></o:p></span></div>
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<br /></div>
<br />
</div>
Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-4613073337836930388.post-46392217337321537822012-09-07T12:37:00.000-07:002012-09-07T12:37:39.880-07:00The Boys are Back in Town<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="MsoNormal">
After a five week recess, two party conventions and a nasty
<a href="http://www.nasa.gov/mission_pages/hurricanes/archives/2012/h2012_Isaac.html">Gulf hurricane</a>, Congress is back in session on September 10. How long will they
stick around? What can they do before taking off to campaign back home? [Quick
fact: The boys may be back in town, but women currently constitute 17% of the
112<sup>th</sup> Congress. Apologies to <a href="http://youtu.be/hQo1HIcSVtg">Thin Lizzy</a>.]<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
At most, Congress will be in session three weeks with a
scheduled adjournment date of October 5. The only “must do” agenda item is to
pass a measure to fund the government when the new fiscal year begins October
1. At this writing, no individual appropriations bills have been sent to the
President’s desk for signature into law. No one is even sure if a lame duck
Congress can agree on <a href="http://www.businessweek.com/articles/2012-09-06/what-the-federal-budget-is-hiding">2013 spending levels</a>. The budget can could be kicked into
early 2013 and a new Congress. It’s happened before in recent years. The only
positive news here is that the House and Senate agreed to the temporary funding
measure back in July.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
When we last saw the Senate in session, no agreement could
be reached to move forward on comprehensive <a href="http://thehill.com/blogs/hillicon-valley/technology/248079-white-house-circulating-draft-of-executive-order-on-cybersecurity">cyber-security legislation</a>. News
reports popped up periodically in August that some Senators believed a deal
could be reached in September. Count me in the doubtful column. We do know,
however, the Obama Administration is actively considering either a revised
<a href="http://www.dhs.gov/homeland-security-presidential-directive-7">Homeland Security Presidential Directive 7</a> or an entirely new executive order
on cyber-security. <i><b>PaymenTrends </b></i>will keep close tabs on all things cyber. We
should also bear in mind that Congress may be in and out of session with a
blink of an eye, but federal agencies such as the<a href="http://www.consumerfinance.gov/"> Consumer Financial Protection Bureau</a> remain open for business. CFPB is currently digesting public comments on
overdraft protection and prepaid cards (just to name two). <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
I do want to give a “shout out” to one piece of legislation
that has passed the House of Representatives 371-0 and that has more than 60
Senate cosponsors. This legislation (<a href="http://www.govtrack.us/congress/votes/112-2012/h453">H.R. 4367</a>/<a href="http://www.govtrack.us/congress/bills/112/s3204/text">S. 3204</a>) would eliminate the
requirement that an ATM need a physical placard fee notice to accompany the
on-screen fee notice to a consumer. This is one issue where Republicans and
Democrats have united behind common-sense legislation to eliminate a burdensome
and unnecessary regulation. The Senate needs to act on S. 3204 before leaving
for home in October. <o:p></o:p></div>
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<div class="separator" style="clear: both; text-align: left;">
EFTA’s Legislative & Regulatory Council will be tackling
all these issues (CFPB, ATM signage, overdraft protection, cyber-security) this
<a href="http://www.efta.org/emergingmarkets.php">September 27</a> in Washington DC. Speakers include <a href="http://www.linkedin.com/profile/view?authType=name&goback=%2Enpv_19838182_*1_*1_name_Kaq*5_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1_*1&locale=en_US&id=19838182&authToken=Kaq-">Stuart Pratt</a>, President &
CEO of the<a href="http://www.cdiaonline.org/"> Consumer Data Industry Association</a>, <a href="http://www.linkedin.com/pub/nicole-muryn/18/a99/794">Nicole Muryn</a>, director of
regulatory and legislative affairs for <a href="http://www.bits.org/">BITS </a>and <a href="http://Catherine Galicia">Catherine Galicia</a>, counsel to<span style="font-family: "Calibri","sans-serif"; font-size: 11.0pt; mso-ansi-language: EN-US; mso-bidi-language: AR-SA; mso-fareast-font-family: Calibri; mso-fareast-language: EN-US; mso-fareast-theme-font: minor-latin;"> </span>Chairman <a href="http://www.johnson.senate.gov/public/">Tim Johnson</a> of the <a href="http://banking.senate.gov/public/">Senate Banking Committee.</a></div>
<div class="MsoNormal">
<o:p></o:p></div>
</div>
Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-60457240264692107312012-08-06T14:40:00.000-07:002012-08-06T14:40:55.168-07:00Federal Reserve Final Rule on Durbin Amendment (Reg II) Fraud-Adjustment<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;">Last
week, the <a href="http://www.federalreserve.gov/">Federal Reserve Board </a>(Board) published the final <a href="http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20120727a1.pdf">rule</a>
on fraud-prevention cost adjustments allowed under Regulation II (the Durbin
Amendment). As you may recall, the Board’s Durbin Amendment final rule issued
last July allowed for a provisional, one cent fraud-prevention adjustment in
addition to the 21 cent and <i style="mso-bidi-font-style: normal;"><a href="http://en.wikipedia.org/wiki/Ad_valorem_tax">ad valorem</a></i>
rates. The Board asked for additional information and comments on fraud-prevention
standards in the marketplace and suggested it may increase the adjustment
depending on the data received.<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;">The
Board’s final rule that takes effect October 1, did not change the one cent
fraud-prevention adjustment standard. The final rule requires an issuer to
develop policies and procedures reasonably designed to detect fraud in order to
receive the fraud-prevention adjustment. Required elements of these policies
and procedures should include:<o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<ul style="margin-top: 0in;" type="disc">
<li class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; mso-list: l0 level1 lfo1;"><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;">Identify and prevent fraudulent electronic debit
transactions<o:p></o:p></span></li>
</ul>
<ul style="margin-top: 0in;" type="disc">
<li class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; mso-list: l0 level1 lfo1;"><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;">Monitor the incidence of, reimbursements received
for, and losses incurred from fraudulent electronic debit transactions<o:p></o:p></span></li>
</ul>
<ul style="margin-top: 0in;" type="disc">
<li class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; mso-list: l0 level1 lfo1;"><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;">Respond appropriately to suspicious electronic debit
transactions so as to limit the fraud losses that may occur and prevent
the occurrence of future fraudulent electronic debit transactions<o:p></o:p></span></li>
</ul>
<ul style="margin-top: 0in;" type="disc">
<li class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in; mso-list: l0 level1 lfo1;"><span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;">Secure debit card and cardholder data<o:p></o:p></span></li>
</ul>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;">Issuers
must inform its payment card networks annually of its fraud-prevention compliance
program in order to receive the one cent adjustment under Reg II. <o:p></o:p></span></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<br /></div>
<div class="MsoNormal" style="margin-bottom: .0001pt; margin-bottom: 0in;">
<span style="font-family: "Arial","sans-serif"; font-size: 10.0pt; line-height: 115%;">I
will provide additional thoughts on the Board’s final rule during the next
Legislative & Regulatory call on Wednesday, August 8 at 2 p.m. EDT.<o:p></o:p></span></div>
</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-56982342239078877872012-08-06T14:07:00.001-07:002012-08-06T14:08:44.806-07:00GAO Weighs in on Congressional Effort to Block Use of Welfare in "Sin" Locations<div dir="ltr" style="text-align: left;" trbidi="on">
As followers of <i>PaymentTrends</i> and its sister blog, <i><a href="http://www.electronicbenefitstransfer.org/wall.html">The Wall</a></i>, on the website of the <a href="http://www.electronicbenefitstransfer.org/">eGovernment Payments Council</a> know, EFTA and eGPC have been very active in working with states, transaction processors, the <a href="http://www.dhhs.gov/">Department of Health and Human Services</a> and the <a href="http://www.gao.gov/">Government Accountability Office</a> on the issue of restricting access and use of <a href="http://www.acf.hhs.gov/programs/ofa/tanf/about.html">TANF</a>, commonly called welfare, payments at businesses inconsistent with the mission of the TANF program.<br />
<br />
In its <a href="http://www.finance.senate.gov/newsroom/chairman/release/?id=c42a8c8a-52ad-44af-86b2-4695aaff5378">Middle Class Tax Relief and Jobs Creation Act </a>earlier this year, Congress restricted the use of TANF payments, prohibiting their access or use in liquor stores, casinos or adult-entertainment establishments. The GAO launched a study back in December 2011 of the issue. Recently the Office released the results of its study. You can find those results and corresponding analysis over on our sister blog, T<i>he Wall</i>, part of the eGPC's website <a href="http://www.electronicbenefitstransfer.org/">www.electronicbenefitstransfer.org</a>.</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-39275377709535798742012-06-22T13:31:00.000-07:002012-06-22T13:31:01.749-07:00House to Debate Bill Modernizing ATM Signage Requirements<div dir="ltr" style="text-align: left;" trbidi="on">
<br />
<div class="MsoNormal">
<span style="color: #1f497d;">On Wednesday, June 27, the <a href="http://financialservices.house.gov/">House Financial Services Committe</a>e is scheduled to consider <a href="http://www.gpo.gov/fdsys/pkg/BILLS-112hr4367ih/pdf/BILLS-112hr4367ih.pdf">H.R. 4367 </a>which seeks to
eliminate Regulation E’s current dual fee notification requirement. If this
bill becomes law this year, consumers will not be impacted. Any individual
wishing to draw cash at an ATM or inquire on his or her balance will receive
the required fee notice on the screen. And, he or she must affirmatively
acknowledge the fee before the transaction can be executed.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="color: #1f497d;">Prospects for the committee
approving H.R. 4367 on Wednesday are strong. The House bill currently has 120
cosponsors including more than half the Financial Services Committee. The
Senate companion bill (<a href="http://www.govtrack.us/congress/bills/112/s3204">S. 3204</a>) has 16 cosponsors. The House and Senate bills
are enjoying strong, bipartisan support. If the Committee approves H.R. 4367 on
Wednesday, it moves to the full House for consideration (mostly likely in
July).</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<div style="text-align: left;">
<a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhRb2lsNcM9_6zqDD1cvq-uBdGGEbPQ-jARCeoer_XP8hzbUTvQzwonFk7LDO1EX7pZeUE6beNYkNo7PThXqhu68dQQgbCKPBVZTlFS-v7fNs7yF_pgsHX6tI9DW0MV2VwonX7feFPCdHM/s1600/GettyImages_200024881-001.jpg" imageanchor="1" style="clear: left; float: left; margin-bottom: 1em; margin-right: 1em;"><img border="0" height="163" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEhRb2lsNcM9_6zqDD1cvq-uBdGGEbPQ-jARCeoer_XP8hzbUTvQzwonFk7LDO1EX7pZeUE6beNYkNo7PThXqhu68dQQgbCKPBVZTlFS-v7fNs7yF_pgsHX6tI9DW0MV2VwonX7feFPCdHM/s200/GettyImages_200024881-001.jpg" width="200" /></a></div>
<span style="color: #1f497d;">In recent years, ATM owners and
operators have been beset by a spate of <a href="http://www.classactionconnect.com/?q=node/776">lawsuits</a> from plaintiff attorneys
alleging <a href="http://www.bankersonline.com/articles/v06n05/v06n05a2.html">Reg E</a> violations. In many of these cases, unscrupulous individuals are
physically removing (vandalizing if you will) the ATM stickers and forwarding
photos to these attorneys. Many ATM operators deploy small fleets of ATMs
and face the option of costly litigation or settlement (not a good option
either way for small business in America).</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<span style="color: #1f497d;">Please come back next week for a
status on the Committee’s consideration of H.R. 4367 is its next steps along
the legislative process.</span></div>
</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-9424036393957999042012-06-18T12:51:00.000-07:002012-06-18T12:51:42.126-07:00May Legislative Roundup<div dir="ltr" style="text-align: left;" trbidi="on">
There are a wide variety of legislative and regulatory initiatives in which<a href="http://www.efta.org/"> EFTA</a> is involved this spring. These include a movement to change the <a href="http://en.wikipedia.org/wiki/Electronic_Fund_Transfer_Act">Electronic Funds Transfer Act</a> to eliminate the requirement that usage fees be posted on the outside of an ATM. This is a vestigial requirement that has outlived its usefulness as modern ATM technology permits a much more detailed, convenient notice on the ATM screen itself as part of an ATM transaction. <br />
<br />
Also on the EFTA legislative and regulatory calendar are regulations governing the restrictions on the use of TANF benefits at liquor stores, casinos and adult-oriented entertainment clubs, cybersecurity and overdraft protection.<br />
<br />
In an informal interview Kurt Helwig, EFTA CEO, and Dennis Ambach, the organization's senior director for government relations, discuss prospects and strategies for these issues. <br />
<br />
We pick up the interview with a discussion about pending legislation in the Senate and House (<a href="http://www.efta.org/currentissues/6-7-12%20S.3204.pdf">S. 3204</a> and <a href="http://www.gpo.gov/fdsys/pkg/BILLS-112hr4367ih/pdf/BILLS-112hr4367ih.pdf">H.R. 4367</a>) that would eliminate the dual ATM notice requirement. Can the bills, now under consideration, become law?<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/aqwKFo5S1rI?feature=player_embedded' frameborder='0'></iframe></div>
</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-14842922358861760802012-06-15T14:15:00.000-07:002012-06-15T14:15:35.526-07:00Coming to Grips with Overdraft Protection<div dir="ltr" style="text-align: left;" trbidi="on">
The <a href="http://www.efta.org/">Electronic Funds Transfer Association</a> has put together a task force of industry veterans to tackle the tough issue of <a href="https://www.federalregister.gov/articles/2012/02/28/2012-4576/impacts-of-overdraft-programs-on-consumers">overdraft protection</a>. The task force's mission is to focus on the legal and operational issues of extending overdraft protection. <br />
<br />
In a quick, three-minute video, <a href="http://www.efta.org/officers.php">Kurt Helwig</a>, president and CEO of EFTA talks about the issue.<br />
<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/QQCjIu5UOLA?feature=player_embedded' frameborder='0'></iframe></div>
</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-76923497083831582642012-06-15T13:38:00.000-07:002012-06-15T13:39:59.224-07:00Spring Legislative Calendar for the Electronic Payments Industry<div dir="ltr" style="text-align: left;" trbidi="on">
Dennis Ambach is the senior director for government relations for the Electronic Funds Transfer Association. On a recent visit to Capitol Hill he talked about pending legislative issues of importance to the electronic payments industry.<br />
<br />
<div class="separator" style="clear: both; text-align: center;">
<iframe allowfullscreen='allowfullscreen' webkitallowfullscreen='webkitallowfullscreen' mozallowfullscreen='mozallowfullscreen' width='320' height='266' src='https://www.youtube.com/embed/S-CqVBZ4zwA?feature=player_embedded' frameborder='0'></iframe></div>
</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-34954850804590830032012-06-15T13:21:00.000-07:002012-06-15T13:21:44.963-07:00Time's Running Out to Comment on the Impact of Overdraft Protection<div dir="ltr" style="text-align: left;" trbidi="on">
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;">June’s end also marks the end of the <a href="http://www.consumerfinance.gov/">Consumer Financial Protection Bureau’s</a> extended comment period on the impacts of <a href="http://www.post-gazette.com/stories/business/news/overdraft-coverage-takes-many-by-surprise-636475/">overdraft programs</a> on consumers. What’s CFPB’s end game here? Will ATMs and point-of-sale (POS) devices need to deliver a real-time “insufficient funds” warning to consumers before a transaction causing an overdraft takes place?</span></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;">The CFPB’s notice for comment on overdraft is fairly sweeping in scope. Questions range from quantifying overdraft opt-in rates, the economics of overdraft programs and long-term impacts to consumers. Of particular concern to <a href="http://www.efta.org/">EFTA </a>members are questions related to consumer alerts and balance information. EFTA <a href="https://www.efta.org/joinnow/index.php">membership</a> hits all the touch points of a shared network transaction: the bank, the processor, the network switch, card processor and host processor. If the CFPB were ever to require some type of overdraft notification at an ATM or POS, EFTA members would be in ground zero for compliance.</span></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;">But, let’s not get too ahead of ourselves here. EFTA will provide the CFPB with comments before the June 29 deadline. Though not finalized, EFTA will emphasize three main points in the comment letter:</span></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoListParagraph" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";"> </span></span></span><span style="font-family: Calibri;">Most POS devices at retail stores or gas pumps currently lack the ability to deliver any meaningful message to the consumer with respect to a possible overdraft occurrence</span></div>
<div class="MsoListParagraph" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";"> </span></span></span><span style="font-family: Calibri;">ATMs are a bit more sophisticated than POS terminals but, again, delivering an overdraft notice message in a shared network transactions (versus on us) is challenging</span></div>
<div class="MsoListParagraph" style="margin: 0in 0in 0pt 0.5in; mso-list: l0 level1 lfo1; text-indent: -0.25in;">
<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";"> </span></span></span><span style="font-family: Calibri;">A greater burden will be placed on community and independent banks versus the larger institutions</span></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<br /></div>
<div class="MsoNormal" style="margin: 0in 0in 0pt;">
<span style="font-family: Calibri;">Once the <a href="https://www.federalregister.gov/articles/2012/02/28/2012-4576/impacts-of-overdraft-programs-on-consumers">comment period</a> closes on June 29, the CFPB will take several weeks (probably months) to read over and formulate a proposed rule on overdraft protection. At this writing, the CFPB has received more 235 comments (see them here at regulations.gov). EFTA’s final comment letter will be posted soon. </span></div>
</div>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-4613073337836930388.post-15026636563767211722012-06-13T09:52:00.001-07:002012-06-13T09:52:42.181-07:00Restricting Access to TANF Benefits<div dir="ltr" style="text-align: left;" trbidi="on">
EFTA and its eGovernment Payments Council have provided their comments to the Department of Health and Human Services on the agency's impending rules for restricting access to TANF benefits. To see the EFTA/eGPC comment letter, click <a href="http://www.efta.org/files/pdf/efta_issue_481.pdf" target="_blank">here</a>. <br />
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eGPC has spent a great deal of time over the last six months on this issue. This included two nationwide surveys, a white paper, and a webinar. Our goal has been to inform the rules-making process so that the rules developed by DHHS actually accomplish the goals of the legislation in such a way that the administration of public funds for eligible households is not adversely affected. <br />
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Our fear has been that without a firm understanding of the problem and how public benefits are administered any resulting restrictions on TANF use may be only sporadically effective and could be discriminatory against TANF participants who play by the rules. Compliance with the Section 4004 requirements, as they're called, could also sap valuable resources from the administration of public aid in many states. <br />
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We believe that the most effective way to achieve the goals of the Middle Class Tax Relieve and Job Creation Act (Section 4004) is to give states maximum flexibility in developing and managing their own plans that work best for their states and their program participants This is definitely not a situation where one size fits all. <br />
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That's how we see it. Check out our <a href="http://www.efta.org/files/pdf/efta_issue_481.pdf">comments</a> and let us know if you agree. </div>Unknownnoreply@blogger.com1tag:blogger.com,1999:blog-4613073337836930388.post-28370912509422355122012-06-12T14:01:00.000-07:002012-06-12T14:01:27.633-07:00LinkedIn, eHarmony and the Politics of Cybersecurity<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: Calibri;">Another week, another major data breach hit the airwaves. The most recent causality was <a href="http://www.nytimes.com/2012/06/11/technology/linkedin-breach-exposes-light-security-even-at-data-companies.html?pagewanted=all">LinkedIn</a>. Six million passwords were reportedly hacked. Internet dating Web site, <a href="http://www.threatmetrix.com/fraudsandends/tag/eharmony-data-breach/">eHarmony</a>, also reported hacked passwords posted online. </span></div>
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<span style="font-family: Calibri;">Rest assured whenever a major data breach is reported, a slew of Senators and Representatives fire off press releases [old school] and tweets [new school] arguing for their data security bill. In reality, data security has taken a back seat to its bigger and more ominous brother, cybersecurity. For companies in the financial services space, good data security is already the law (<a href="http://www.gpo.gov/fdsys/pkg/PLAW-106publ102/pdf/PLAW-106publ102.pdf">Gramm-Leach-Bliley’s</a> Safeguards Rule and more than 45 state data breach notification laws). </span></div>
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<span style="font-family: Calibri;">As a reminder, the following is a roster of data security bills reported by the Senate Judiciary Committee last September:</span></div>
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<span style="color: black; font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";"> </span></span></span><span style="color: black;"><span style="font-family: Calibri;">S. 1151, the <a href="http://thomas.loc.gov/cgi-bin/bdquery/z?d112:s.1151:">Personal Data Privacy and Security Act</a>, sponsored by the Committee Chairman Pat Leahy (D-VT).</span></span></div>
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<span style="color: black; font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";"> </span></span></span><span style="color: black;"><span style="font-family: Calibri;">S. 1535, the <a href="http://www.govtrack.us/congress/bills/112/s1535">Personal Data Protection and Breach Accountability Act of 2011</a>, sponsored by Sen. Richard Blumenthal (D-CT)</span></span></div>
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<span style="color: black; font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";"> </span></span></span><span style="color: black;"><span style="font-family: Calibri;">S. 1408, the <a href="http://data%20breach%20notification%20act/">Data Breach Notification Act</a>, sponsored by Sen. Diane Feinstein (D-CA)</span></span></div>
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<span style="color: black;"><span style="font-family: Calibri;">All three bills would require companies to implement data security programs to protect sensitive personal information as well as setting a national standard for breach notification. S. 1151 and S. 1535 provide for criminal penalties for failing to notify individuals of a data breach. S. 1535 allows for private rights of action against companies failing to notify of a data breach. The Senate Commerce Committee continues to discuss its data security and breach notification bill (S. 1207). On the House side, the <a href="http://www.commerce.senate.gov/">Energy and Commerce Committee</a> has yet to schedule a markup and vote on H.R. 2577, the <a href="http://bono.house.gov/news/documentsingle.aspx?DocumentID=246029">SAFE Data Act authored by Rep. Mary Bono Mack</a> (R-CA). Her subcommittee approved H.R. 2577 in July but negotiations continue on the preemption, data minimization and liability provisions in the bill. It is uncertain whether the full Committee will markup H.R. 2577 this summer.</span></span></div>
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<span style="color: black;"><span style="font-family: Calibri;">Even in an active Congress, passing cybersecurity, data security or privacy legislation would all be a tall order. <a href="http://www.nationaljournal.com/tech/senate-cybersecurity-bills-snagged-on-fundamental-differences-20120522">Consensus just does not exist</a> on whether more regulation will be of any benefit. Meantime, companies (especially in financial services and payments) spend great resources (human and capital) to stay one step ahead of the fraudsters, hackers and government officials wanting to punish companies for lax data security.</span></span></div>
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</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-37489438107055771582012-06-01T12:57:00.000-07:002012-06-01T12:57:47.254-07:00You’re Going to Need a Bigger Boat<div dir="ltr" style="text-align: left;" trbidi="on">
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For some reason, I cannot shake this classic line from <em><a href="http://www.imdb.com/title/tt0073195/">Jaws</a></em> (uttered by Chief Brody to Quint upon first seeing the shark) when I read the daily comings and goings of the<a href="http://www.consumerfinance.gov/"> Consumer Financial Protection Bureau</a>. The question is not who or what the Bureau is attempting to regulate. But, who or what aren’t they wanting to regulate. Or, so it appears.</div>
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<span style="font-family: Calibri;">Like it or not, the Bureau is around to stay. It’s still in its infancy, but growing bigger and more powerful by the day. The Bureau hit a major growth spurt when President Obama <a href="http://www.forbes.com/fdc/welcome_mjx.shtml">recess appointed Richard Cordray</a> to be its first director (controversially I might add). Since January, the Bureau has been one active federal agency. And, it’s not even fully staffed yet.</span></div>
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<span style="font-family: Calibri;">Here’s a quick, non-exhaustive run-down on the Bureau’s recent activities:</span></div>
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<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";"> </span></span></span><span style="font-family: Calibri;">Request for Information on <a href="http://www.consumerfinance.gov/protecting-you/">overdraft practices</a></span></div>
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<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";"> </span></span></span><span style="font-family: Calibri;">Examination of overdraft programs at the largest nine financial institutions</span></div>
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<span style="font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";"> </span></span></span><span style="font-family: Calibri;">Advance Notice of Proposed Rulemaking on <a href="http://www.foxbusiness.com/personal-finance/2012/05/31/prepaid-cards-come-under-government-scrutiny/">General-Purpose Reloadable Prepaid Cards</a></span></div>
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<span style="color: black; font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";"> <a href="http://www.blogger.com/goog_1445681246"> </a></span></span></span><span style="color: black;"><span style="font-family: Calibri;"><a href="http://www.dsnews.com/articles/cfpb-proposes-rules-to-supervise-nonbanks-2012-05-29">Proposed Rule for Supervision of Nonbanks</a> that Pose Risks to Consumers</span></span></div>
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<span style="color: black; font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";"> </span></span></span><span style="color: black;"><span style="font-family: Calibri;"><a href="http://proposed%20rule%20on%20express%20statutory%20protections%20of%20confidential%20information%20in%20bank%20examinations/">Proposed Rule on express statutory protections of confidential information in bank examinations</a></span></span></div>
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<span style="color: black; font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";"> <a href="http://www.blogger.com/goog_1445681255"> </a></span></span></span><span style="color: black;"><span style="font-family: Calibri;"><a href="http://www.consumerfinance.gov/notice-and-comment/">Notice for Comment on updating and streamlining regulations</a></span></span></div>
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<span style="color: black; font-family: Symbol; mso-bidi-font-family: Symbol; mso-fareast-font-family: Symbol;"><span style="mso-list: Ignore;">·<span style="font: 7pt "Times New Roman";"> </span></span></span><span style="color: black;"><span style="font-family: Calibri;"><a href="http://www.usnews.com/news/articles/2012/02/17/cfpb-takes-aim-at-debt-collectors-credit-reporting-agencies">Proposed Rule to supervise debt collectors and consumer reporting agencies</a></span></span></div>
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<span style="font-family: Calibri;">Ready to cry “uncle” yet? One can certainly make the case the Bureau is so active because it is so young. But, is haste making waste? Case in point may be the Bureau’s <a href="http://www.paulhastings.com/assets/publications/2099.pdf">final rule on international remittance transfers</a> issued late last year. The Bureau assumed responsibility for the final rule from the Federal Reserve Board (who had issued the proposed rule). Without going into a detailed analysis of the final rule, many banks providing remittance services are stating the 2013 compliance date for new consumer disclosures and error resolution cannot be achieved. The message appears to be getting through to the Bureau. It may revisit the issue in some fashion.</span></div>
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<span style="font-family: Calibri;">We ought to be somewhat sympathetic to the Bureau and other federal banking agencies under strain to implement the more than 400 rules and studies required by <a href="http://www.mofo.com/files/Uploads/Images/SummaryDoddFrankAct.pdf">Dodd-Frank</a>. The Bureau must also find its way in working with the Fed, the OCC, FTC etc on bank examinations and enforcement actions. The Bureau must balance its requirements and obligations under Dodd-Frank against being spread too thin and possibly hurting the financial services industry’s ability to help the economy recover.</span></div>
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<span style="font-family: Calibri;">Does the Bureau go for the “bigger boat” option or focus on issues beneficial to consumers and the recovering economy? Time will tell.</span></div>
</span></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-78407847288038375832012-05-09T10:59:00.000-07:002012-05-10T09:00:27.162-07:00Never a Dull Moment in Durbinville<div dir="ltr" style="text-align: left;" trbidi="on">
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<span style="font-family: Calibri;">Last month I wrote about the recent comings and goings with the <a href="http://www.durbininterchangeamendment.org/">Durbin Amendment</a> and interchange. I obviously did not consult with the Federal Reserve Board about timing. On May 2, the Fed did a little <a href="http://www.cutimes.com/2012/05/01/fed-report-shows-2011q4-interchange-income-unchang">Durbin data dump</a> from the fourth quarter of 2011 regarding the effects of the Durbin amendment on exempt and non-exempt issuers.</span></div>
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<span style="font-family: Calibri;">I have been working Google over-time reading through the various news reports and analyses of the Fed’s numbers. The most prominent concern with the Durbin Amendment was its possible impact on <a href="http://online.wsj.com/article/SB10001424052702304868004577378223143616802.html?mod=googlenews_wsj">exempt issuers</a> (those lower than $10 billion in asset size). Would merchants incentivize their customers to pay with debit cards from non-exempt issuers thus realizing the lower interchange rate? Could they? The Fed did not answer these questions. The Fed was quite clear that exempt issuers averaged 43 cents in interchange fees (the same number as reported in 2009). The general chorus of those opining about the Fed report was “…it’s too early to tell.” True. We may not even have good trend data for a year or so since the non-exclusivity provision of Durbin took effect at the start of the second quarter this year.</span></div>
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<span style="font-family: Calibri;">The Fed will continue to collect and publish this data annually. We can also expect a <a href="http://www.ftc.gov/os/fedreg/2011/09/110915kobebrownfrn.pdf">similar report</a> from the <a href="http://efta.org/files/pdf/efta_issue_400.pdf">Federal Trade Commission</a> by year’s end on the impact to exempt issuers thanks to <a href="http://www.efta.org/files/pdf/efta_issue_400.pdf">provision</a> Senator Durbin added in last year’s <a href="http://thinkprogress.org/politics/2010/12/16/135428/omnibus-hypocrisy/?mobile=nc">Omnibus appropriations bill</a>. It’s certainly not a bad thing that the Fed is building trend data on this issue. </span><br />
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<span style="font-family: Calibri;">The other Durbinville news of the week came from <a href="http://www.thestreet.com/story/11517961/1/visas-ceo-discusses-q2-2012-results--earnings-call-transcript.html">Visa’s quarterly earning call</a>. Visa disclosed a “civil investigative demand” from the Department of Justice regarding its <a href="http://www.csnews.com/top-story-justice_department_probing_visa_s_debit_fee_strategy-61038.html">new fixed fee</a> it is now charging merchant banks. We’ll have to see how this one plays out.</span></div>
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<span style="font-family: Calibri;">I certainly will pass along any more Durbin musings on interchange as they come along. </span></div>
</div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-48448855345862212442012-04-28T12:30:00.000-07:002012-04-28T12:30:24.686-07:00Redundant ATM Signage: Summarizing the Issues<div dir="ltr" style="text-align: left;" trbidi="on">
In a five-minute interview, Kurt Helwig, president and CEO of the Electronic Funds Transfer Association, analyzes the issues involved in the recent spate of <a href="http://www.dallasnews.com/news/community-news/dallas/headlines/20111219-lawsuits-over-atm-fees-take-a-swipe-at-multibillion-dollar-business.ece">lawsuits</a> involving fee notification signage on ATMs. For a background on the issue, scroll back to previous posts "ATM Fee Signage (Continued)," posted January 2012 and "ATM Fee Disclosure: Updating Regulations to Limit Jackpot Justice," posted December 2012. <br />
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Last week Representatives <a href="http://www.luetkemeyer.house.gov/">Blaine Leutkemeyer</a> (R-MO) and <a href="http://www.davidscott.house.gov/">David Scott</a> (D-GA) introduced a bi-partisan measure that would eliminate the requirement for redundant physical signage on ATM terminals. Last week Reps. Leutkemeyer and Scott sent a letter to their colleagues inviting co-sponsors on the bill. Read that letter <a href="http://www.efta.org/currentissues/LuetkemeyerScott%20DearColleague_0424%202012.pdf">here</a>.) For analysis of the Leutkemeyer-Scott bill see our post below of April 20, "H.R. 4367: Beauty in Simplicity."<br />
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In this short interview, Mr. Helwig lays out the issues and history of the problem and looks at the chances of success for legislative or regulatory relief.<br />
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<br /></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-37275726488917197482012-04-28T10:09:00.000-07:002012-04-28T10:16:38.161-07:00Regulating Bad Behavior<div dir="ltr" style="text-align: left;" trbidi="on">
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More than 100 people attended this week's <a href="http://www.efta.org/" target="_blank">EFTA</a> webinar on complying with the new federal law that requires states to restrict access to TANF benefits in specific locations. The <a href="http://www.accountingweb.com/topic/tax/its-official-payroll-tax-holiday-extends-through-2012" target="_blank">Middle Class Tax Relief and Jobs Creation Act of 2012</a>, signed by Pres. Obama in February includes a section, number 4004, that requires states to prohibit TANF beneficiaries from accessing their benefits in liquor stores, gaming locations and adult-entertainment venues.<br />
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States are required by 2014 to submit a report to the <a href="http://www.dhhs.gov/" target="_blank">Department of Health and Human Services</a> on how they have complied with the law. States that fail to adequate comply face the loss of up to five percent of their <a href="http://www.acf.hhs.gov/programs/ofa/tanf/about.html" target="_blank">TANF</a> block grant. <br />
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DHHS is the federal agency that oversees the TANF program. Since the new law provides for monetary penalties, DHHS must conduct a formal rules-making process to establish regulations for complying with the intent of Congress, according to the agency. <br />
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The webinar was hosted by the Electronic Funds Transfer Association and <a href="http://www.co-opfs.org/" target="_blank">CO-OP Financial Services</a>. It was divided into four sections: <br />
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<li>The legislative background of the law</li>
<li>The regulatory process that is now underway</li>
<li>How states are complying with similar blocking state-level blocking laws</li>
<li>Alternatives to "systemic" blocking solutions</li>
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A veteran panel discussed these four issues at length. <strong>Dennis Ambach</strong>, the senior director of government relations for EFTA, explained the origin of the bill and similar state-level movements to restrict the use of TANF. <strong>Mark Greenberg</strong>, the deputy assistant secretary for policy in the Administration for Children and Families, explained in detail the regulatory process that will produce the rules that will guide states in their compliance with the law. ACH is the branch of DHHS that administers TANF. <br />
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The EBT director for the State of Colorado, <strong>Scott Barnette</strong>, presented his state's experience in restricting access to TANF and benefits from a host of other government programs. Finally, <strong>John Simeone</strong>, executive director for JP Morgan Public Sector Prepaid Cards talked about the issues involved with trying to block access to TANF by "throwing a switch" on ATM machines. (Hint: The switch doesn't exist.)<br />
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There have been just a few seminal milestones that have marked the path of EBT. The first was creation of the first set of operating regulations in 1992. Another was Congress' willingness in the late 1990s to appropriate money so that EBT transactions could be interoperable across the country. How the Section 4004 regulations are writen will be one of those milestones.<br />
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The regulators at DHHS face a thankless task in trying to control access to TANF. Most Americans share Congress' disgust with knowing that money that was appropriated to clothe poor children and keep a roof over their heads is going instead to pay for liquor and lap dances. But implementing the law will be tricky. Compliance costs may in the end exceed the amount of money that is currently being diverted to spirits, slots and strippers. <br />
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So DHHS will have to balance such factors as cost and benefit, access and fees, and the carrot and stick of enforcement.<br />
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Here are just three of the issues that regulators will have to consider over the next several months:<br />
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<strong><em>Whether systemic solutions are cost effective</em></strong>. Results in two states have shown that the amount of TANF benefits flowing through proscribed categories of merchant is in each case less than one-half of one percent of the total amount of benefits distributed. Human services agencies have no regulatory authority over alcohol retailers, gaming or adult entertainment. In at least one state, staff time was devoted to scanning Yellow Pages to make lists of liquor stores and strip clubs to contact directly. The manpower required to implement the law could be staggering. <br />
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<strong><em>Whether regulations may end up reducing access for all beneficiaries</em></strong>. Even when a state is able to locate and contact business owners who agree to block acceptance of EBT cards at ATMs in those locations, it's not the end of the story. ATMs are mobile assets. An ATM may be replaced by one whose terminal ID has not been blocked. Or a terminal with a blocked ID may end up in a lawful location where beneficiaries may be blocked from using it. <br />
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And in remote areas of the country, for example, western states in the lower 48 and Alaska, there are places where a prohibited location may be the only location within 50 or 100 miles of where a beneficiary lives. Prohibiting that location may place an undue hardship on the beneficiary.<br />
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And what about Indian casinos? Recognized Indian nations and tribal authorities under the <a href="http://www.nigc.gov/Laws_Regulations/Indian_Gaming_Regulatory_Act.aspx" target="_blank">Indian Gaming Regulatory Act of 1988 </a>control gaming within their territory. So the requirements of Section 4004 of the new law might not be enforceable in Indian casinos. This could cause the regulations to be applied in a discriminatory manner. One beneficiary may face a 25-mile drive to an ATM because a casino is now off limits for benefit access, while another beneficiary may hop on the Interstate, get off at the next exit and pull into an Indian casino with her EBT card. <br />
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Regulators are concerned about access costs. But we know that cost and access are code words for supply and demand. ATM owners in some areas may find that blocking these transactions may make it economically unfeasible to keep their machines in those locations. They may redeploy their machines to more profitable locations. As the supply of ATMs diminishes, will the owners of remaining machines raise their surcharges? If so, compliance with the law will result in less access and higher cost for all beneficiaries. As the supply of access points decreases, the cost of remaining access points increases. <br />
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<strong><em>Fairness of sanctions</em></strong>. States that fail to comply with the law could be sanctioned with the loss of up to five percent of their TANF block grant. But whom does this affect? Not the liquor store owner who sold a pint of bar whiskey to someone who paid with TANF funds. Not the casino owner who knowingly allowed access to TANF funds so that in three hands of blackjack the beneficiary's family support money was in his till. Not the stripper who steps off the bar with TANF cash in the waistband of her G-string. <br />
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Section 4004 sactions could end up harming the vast majority of program beneficiaries who play by the rules. A sanctioned state will be forced to make up the five percent reduction in its TANF grant by cutting other programs to use that money to meet its TANF obligation. Which programs? Maybe reduce the hours for school nurses. Maybe buy fewer assisted living devices for the disabled. Or maybe layoff the interpreters at the blind commission. Who knows? <br />
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Sanctions should not end up indirectly harming beneficiaries who play by the rules. States should comply with the new federal law by passing their own legislation that will allow them to better enforce how and where these benefits are accessed and spent. Gaming commissions should be responsible for making sure that the casinos, bingo-halls and poker clubs they oversee don't allow TANF funds to be accessed in those locations. If these businesses circumvent the gaming commission's regulations the businesses could face loss of their licenses. The same for liquor stores.<br />
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Congress did the right thing by trying to turn the focus on TANF benefits back to children and families. But regulators will have to have the leadership of Moses, the wisdom of Solomon and the patience of Job to get this one right. <br />
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DHHS will have to absorb a great deal of information in a very short period of time in order to craft regulations that don't negative impact anyone but the bad actors. And states, in their compliance plans, will have to show that they can apply the proper pressure to those bad actors in order to regulate access to and use of TANF in the manner Congress intended when it created the program.<br />
<br /></div>Unknownnoreply@blogger.com0tag:blogger.com,1999:blog-4613073337836930388.post-68399746659476761172012-04-20T07:47:00.000-07:002012-04-20T07:47:43.332-07:00H.R. 4367: Beauty in Simplicity<div dir="ltr" style="text-align: left;" trbidi="on"><span style="font-family: Calibri;">All too often the public only hears about 2,500 plus page laws (monstrosities if you will) coming from our Congress. Let’s round up the usual suspects: <a href="http://obamacarewatcher.org/articles/172">Obamacare</a>, <a href="http://financialservices.house.gov/">Dodd-Frank</a> and year-ending<a href="http://blog.heritage.org/2010/12/15/senate-omnibus-bill-nearly-2000-pages-of-runaway-spending-and-pork/"> omnibus spending bills.</a> Bigger is not better when it comes to law making.</span> <div style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none;"><br />
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiyyIfnlBxE6OBnqk1VQX4pIP1mjvx8aB8qK-5DhQcmvHBK0OJAqFkW7BvMcwQ08AIXP4o8f4z1QqLyP9BK69L4OOgriXCZTIEO6YUhWfx9UKnqAjfI0BPETLfrkecD_DuC-qtVpEB6jtI/s1600/Blaine+Luetkemeyer.jpg" imageanchor="1" style="clear: left; cssfloat: left; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="200" qda="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEiyyIfnlBxE6OBnqk1VQX4pIP1mjvx8aB8qK-5DhQcmvHBK0OJAqFkW7BvMcwQ08AIXP4o8f4z1QqLyP9BK69L4OOgriXCZTIEO6YUhWfx9UKnqAjfI0BPETLfrkecD_DuC-qtVpEB6jtI/s200/Blaine+Luetkemeyer.jpg" width="133" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">Blaine Luetkemeyer (R-MO)<br />
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</tbody></table><div class="MsoNormal" style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none; margin: 0in 0in 0pt;"><span style="font-family: Calibri;">I am more pleased then to offer thoughts on a bill recently introduced by Rep. <a href="http://luetkemeyer.house.gov/">Blaine Luetkemeyer</a> of Missouri. Responding to a real need in the ATM industry, Rep. Luetkemeyer sponsored H<a href="http://www.gpo.gov/fdsys/pkg/BILLS-112hr4367ih/pdf/BILLS-112hr4367ih.pdf">.R. 4367</a> along with Rep. <a href="http://davidscott.house.gov/">David Scott</a> of Georgia. Weighing in at a sleek and sturdy one and half pages, H.R. 4367 proposes to streamline and update the <a href="http://www.federalreserve.gov/boarddocs/caletters/2008/0807/08-07_attachment.pdf">Electronic Funds Transfer Act’s</a> requirement that an ATM operator provide a consumer two fee notices (one on the screen and one on the physical ATM) before a balance inquiry or cash withdrawal.</span></div><div class="MsoNormal" style="margin: 0in 0in 0pt;"><br />
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<tr><td style="text-align: center;"><a href="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixUMsozkyu1ck055bV60K1ZHLRvUjN5cWcMvBG88SZz2aCTanxSzrVJJSLk9Yv7iwKWGfA6Dk6eQuve2niY8Cgks6OMpKM_H6M_kOkfYPmbzjCcnUJB9AHq0bC2kFyg_1704TLaGnBf7w/s1600/David+Scott.jpg" imageanchor="1" style="clear: right; cssfloat: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;"><img border="0" height="200" qda="true" src="https://blogger.googleusercontent.com/img/b/R29vZ2xl/AVvXsEixUMsozkyu1ck055bV60K1ZHLRvUjN5cWcMvBG88SZz2aCTanxSzrVJJSLk9Yv7iwKWGfA6Dk6eQuve2niY8Cgks6OMpKM_H6M_kOkfYPmbzjCcnUJB9AHq0bC2kFyg_1704TLaGnBf7w/s200/David+Scott.jpg" width="136" /></a></td></tr>
<tr><td class="tr-caption" style="text-align: center;">David Scott (D-GA)<br />
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</tbody></table> <div style="text-align: left;"></div><div class="MsoNormal" style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none; margin: 0in 0in 0pt;">Years ago, the dual fee notification requirement was an important consumer protection measure because some screens on older ATMs could not deliver a robust notice. Current ATM screens now offer the consumer a very robust fee notice (thank you <a href="http://en.wikipedia.org/wiki/Triple_DES">Triple Des</a>, ADA audio requirements and good, old investments by the ATM industry). Unfortunately for the industry, some unscrupulous characters have started a national trend of defacing the ATM’s physical fee notice placard, hiring trial lawyers to accuse ATM operators of non-compliance with the EFTA and demanding cash settlements.</div><div class="MsoNormal" style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none; margin: 0in 0in 0pt;"></div><div class="MsoNormal" style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none; margin: 0in 0in 0pt;"><br />
<span style="font-family: Calibri;">The <a href="http://www.efta.org/">Electronic Funds Transfer Association</a> and the <a href="http://www.atmia.com/">ATM Industry Association</a> last year began to reach out to Capitol Hill on the problems with these lawsuits and the need to update the EFTA’s dual fee notification requirement. The <a href="http://www.consumerfinance.gov/">Consumer Financial Protection Bureau</a> is also involved. The Bureau asked for public comment on whether the dual fee notification requirement ought to be changed. Of the more than 100 comments letters filed, a strong majority supported the dual fee notification elimination. The <a href="http://www.aba.com/">American Bankers Association</a>, <a href="http://www.americangaming.org/">American Gaming Association</a>, <a href="http://www.cuna.org/">Credit Union National Association</a>,<a href="http://www.icba.org/"> Independent Community Bankers Association</a>,<a href="http://www.nafcu.org/"> National Association of Federal Credit Unions</a> and the <a href="http://www.nacsonline.com/NACS/Pages/default.aspx">National Association of Convenience Stores</a> are also working hard to eliminate the dual fee notification requirement.</span></div><div class="MsoNormal" style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none; margin: 0in 0in 0pt;"><br />
</div><div class="MsoNormal" style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none; margin: 0in 0in 0pt;"><span style="font-family: Calibri;">Reps. Luetkemeyer and Scott deserve much credit for offering a simple solution to an important problem. H.R. 4367 fully protects consumers and it’s in the spirit of updating and streamlining an old regulation. It deserves broad support.</span></div><br />
<div class="separator" style="border-bottom: medium none; border-left: medium none; border-right: medium none; border-top: medium none; clear: both; text-align: center;"></div></span> </div>Unknownnoreply@blogger.com0