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.
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 Office of Family Assistance in
June. HHS has yet to publish any final rule.
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 to preempt 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.
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.
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.
Just recently, Gov.
Mike Pence signed into law a bill 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.
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.
