NEW YORK

New York's Financial Institution Data Match and Automated Asset Seizure Program

New York has implemented an in-state and multistate financial institution data match program. The State is obtaining information regarding assets owned by child support obligors from banks, credit unions, and securities firms and matching it against information on the state's Child Support Management System (CSMS). The assets include savings and checking accounts, IRAs, CDs, mutual funds, cash accounts, and stocks. Financial institutions operating solely within New York State are required by law to conduct the match directly with the state. Those operating in more than one state (multistate financial institutions) may choose to conduct the match with each state in which it operates or directly with the Federal government.

Whether the match is facilitated at the federal level or conducted directly with the state, CSMS operates the system as a single process. The communication link is ultimately to and from the state's mainframe computer. The information is established, checked and routed by CSMS. Data records from the financial institutions are matched against child support obligor cases maintained by CSMS. If the child support obligor's CSMS account meets the predetermined selection criteria (at least 2 months delinquent, no payment during the previous 45 days and at least $300 in arrears), the financial asset record from the financial institution is linked to the obligor's CSMS account and enters the automated asset seizure process. Issues arising from due process considerations remain the responsibility of local support collection units. For example, determination as to the validity of a claim of mistake of fact is handled at the local level.

For child support accounts meeting the asset seizure selection criteria, CSMS generates a restraining notice, which has the effect of an injunction, to the asset holder. Upon issuing a notice to restrain an account to a financial institution, the automated property execution process (PEX) is structured to issue a notice of the action to the child support obligor. The notice is mailed to the child support obligor's last known address of record.

The child support obligor is afforded 15 days to claim a mistake of fact. In response to such an assertion, the child support worker must issue a ruling within 45 days. If the child support obligor's claim is upheld, the worker must immediately issue a release of the restraint to the financial institution.

If the claim is denied, the restraining notice is permitted to move forward, retroactive to the date the restraining notice was first issued to the financial institution. This means that PEX is programmed to issue the execution order 35 days after the date of the restraining notice. The State allows this time because child support payments may be in transit which, when received and applied to the child support account, may settle the child support debt in full.

The Notice to Garnishee has the effect of a lien as well as direction to satisfy arrears/past due support from real or personal property belonging to the child support obligor and in the possession of the garnishee.

The Office of Temporary and Disability Assistance (OTDA) has entered into a contract with a service provider to perform the initial and ongoing data match with those financial institutions operating solely within New York State (nearly 800 banks and credit unions). The state determined that hiring a private vendor would be the most cost efficient and effective means of facilitating the data exchange. As of December 31, 2001, there was nearly 95% compliance on the part of the banks and credit unions.

Contractor responsibilities

The State selected the vendor through a competitive bidding process that requires that vendor to develop, coordinate and conduct a quarterly data match of child support records with financial institutions operating solely in New York. The vendor is also required to provide the following outreach to financial institutions:

1. Identify all eligible financial institutions.
2. Provide outreach materials to financial institutions that clearly describe the matching process and solicit their participation in the process. These materials include:
   • New York State-specific FIDM Handbook
   • Workshops
   • FIDM video and brochure
   • FIDM website at www.dfa.state.ny.us
3. Develop, with State approval, a standard written agreement form to be executed with each financial institution.
4. Contact financial institutions to execute the written agreement and begin the match process.
5. Develop a timetable for each financial institution leading to completion of the first actual match with each financial institution as well as an ongoing schedule for future matches.
6. Offer each financial institution the option of selecting either Match Method 1 or 2 in the federal format as well as media and transmission options.

Approach to ongoing operations

The vendor receives obligor information from the State electronically via a weekly secure file transfer. The vendor then uses the weekly data received to perform quarterly data matches with financial institutions using the federal format and the match method chosen by each financial institution. The vendor receives account records from Method 1 financial institutions on a quarterly basis and conducts the match with the inquiry records received from the state within five business days of receipt. The vendor sends the States' inquiry file to Method 2 financial institutions on a quarterly basis and receives match records back from the financial institutions. The vendor submits the matches received or made during the prior week to the State on the following Friday.

The vendor also monitors compliance with the match schedule and the 45-day response deadline by each financial institution and conducts follow-up.

Toll-free Help Line

The vendor has established and maintains a toll-free telephone help line for financial institution questions regarding the FIDM process. This help line can handle status inquiries, technical information, data match assistance, and other customer services associated with or as result of the FIDM. The help line is available from 8:00 am to 7:00 pm EST.

Results

From August 1, 2000 to the end of April 2002, New York has collected over $11 million as a result of the FIDM/Asset Seizure Process. No special funding was required for the program. The cost was shared with the Federal government as a normal IV-D expenditure.

Replication advice

Full automation is the key to a successful FIDM and asset seizure process. The entire process should take no more than two days.

The system can include strategies for managing matches returned by the data match, including system edits. All records can be processed the day they are received or as soon as they are workable. Only valid name and Social Security number combinations should enter the automated asset seizure process. Obligor address information can be routed to a separate "parent locator" report process. Asset record types can be screened to bypass non-eligible asset types such as mortgage escrow accounts. The system can identify financial institutions (out-of-state) that do not accept direct liens/levies. Such records can be automatically reported to line workers so as to initiate a two-state process or other means of enforcement.

Consider strategies for issuing large volumes of liens and levies. The system can select direct liens and levies. The system can "stream out" liens and levies when certain criteria or thresholds are reached. Consider strategies for handling particular asset types such as individual retirement accounts. Strategies for interacting with account holders are also important.

For more information about New York's process, contact: Larry Knowles, New York State Office of Temporary and Disability Assistance, Division of Child Support Enforcement, 40 North Pearl Street, 13-D, Albany, New York 12243-0001, 518-486-5461, fax 518-486-3127, Lawrence.Knowles@DFA.State.NY.US.