DCL-99-110, Financial Institution Data Match Fact Sheets

DCL-99-110

Date: OCT 6, 1999

TO: ALL STATE IV-D DIRECTORS

RE: Financial Institution Data Match Fact Sheets

Dear Colleague:

Attached, for State use, are fact sheets and tip sheets related to financial institution data match (FIDM). Some were issued previously and reappear here as updates. The attachments cover the uses of match information, preparation for FIDM operations, outreach to financial institutions, privacy and security, and questions frequently asked.

Thanks to the many State child support agencies that contributed to these materials. We would appreciate receiving copies of other FIDM related materials as your office develops them. Please contact L. Gina Barbaro, Financial Industry Liaison, at (202) 401-5426, should you have materials or suggestions for our office to provide technical assistance on the data match.

Sincerely,

David Gray Ross
Commissioner
Office of Child Support Enforcement

Attachments:

FIDM Overview
Uses of FIDM Match Information
State Preparation for FIDM
Tips for Identifying Financial Institutions
Fees and FFP
Outreach Tips
Mail Stuffer Fact Sheet
FIDM Waiver
FIDM Privacy and Security
Frequently Asked Questions
FIDM Resources
Generic Agreement

cc: ACF Hub Directors and Regional Administrators
CSE Regional Program Managers

Financial Institution Data Match

Overview

September 27, 1999

America's children need and deserve financial and emotional support from both parents. Nationally, the number of child support cases has increased from 2 million in 1976 to 20 million cases in 1997. Despite the wide range of enforcement remedies, nearly one half of all child support cases receive minimal or no support. The Federal Office of Child Support Enforcement (OCSE), working together with State and local child support programs, is committed to improving the lives of children by implementing a nationwide child support enforcement strategy. A new tool in this strategy is the Financial Institution Data Match (FIDM).

Public Law 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), also known as the Welfare Reform Act, was signed into law on August 22, 1996. Its primary goal is to move families off public assistance by helping them become self-sufficient. To achieve this goal, both parents must assume financial responsibility for their children. To this end, PRWORA provides a much strengthened child support enforcement program for all families.

One provision of PRWORA requires all States to enter into agreements with Financial Institutions conducting business within their State for the purpose of conducting a quarterly data match. This data match is intended to identify accounts belonging to parents who are delinquent in their child support obligation. When a match is identified, State child support programs may issue liens or levies on the accounts of that delinquent obligor to collect the past-due child support.

What are the goals of the FIDM?

To increase the collection of delinquent child support
To maintain the integrity and security of both financial institution and child support data
To make use of technology to aid in the collection of child support

Who decided how FIDM should work?

The Financial Institution Work Group, comprised of representatives from Financial Institutions and their associations, third-party processors, software providers, and Federal and State child support representatives, serves as an advisory group to OCSE for this purpose.
The Work Group members provide advice on agreements, fees, operations, and outreach efforts.
The Work Group developed uniform data specifications which are to be used by all States, Territories, and Financial Institutions to conduct the data match.

What legislation established the FIDM program?

Public Law 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), also known as the Welfare Reform Act, contains the provisions for the FIDM.
Public Law 105-200, the Child Support Performance and Incentive Act of 1998, modified PRWORA to allow the Federal Office of Child Support to use the Federal Parent Locator Service (FPLS) to facilitate the data match for Multistate Financial Institutions (MSFI) (i.e., those financial institutions operating within two or more States).
All States and Territories have laws in place to meet the FIDM requirements of PRWORA.

What Financial Institutions must participate in the data match program?

Banks and savings and loans
Federal and State credit unions
Benefit associations, insurance companies, safe deposit companies, money-market mutual funds, and similar institutions

What types of accounts are subject to the data match program?

Demand deposit accounts
Checking accounts or negotiable withdrawal order account
Savings accounts
Time deposit accounts
Money-market mutual fund accounts

How often must the data match be conducted?

It must be performed each calendar quarter

What data is returned to the child support program for use in collecting delinquent child support obligations?

Financial Institutions are required to provide the name, record address, social security number or other taxpayer identification number, and other identifying information for each match.

Where can I get a copy of the data specifications?

For all data element specifications, refer to the Financial Data Match Specifications Handbook, dated March 5, 1999
The FIDM Specifications Handbook is available from the Office of Child Support Enforcement (OCSE) website.

Financial Institution Data Match

Single-State Financial Institutions

Every State is required by law to enter into agreements with Financial Institutions doing business within their State to develop and perform a quarterly data match for the purpose of collecting delinquent child support obligations. Financial Institutions will fall into one of two categories: single-state or multistate. A single-state Financial Institution is one which conducts business solely within one State. These institutions are generally smaller, independent banks, credit unions, and savings and loans which operate within a single- state. Multistate Financial Institutions, on the other hand, operate in two or more States.

What types of agreements are necessary?

States must enter into agreements with every Financial Institution doing business within the State or, in the case of Multistate Financial Institutions, with the Office of Child Support Enforcement.

Must States pay a fee to Financial Institutions for conducting the data match?

State law determines whether a State will pay a fee or not.
Fees must not exceed the actual costs of conducting the match.
Federal financial participation (FFP) is available to partially reimburse the States for the cost of "reasonable" fees paid to the Financial Institution for the data match.

What is the methodology of performing the data match?

The record layout is contained in the Financial Data Match Specifications Handbook, dated March 5, 1999.
Most States offer two reporting methods to Financial Institutions: Method One (the all accounts method) and Method Two (the matched accounts method).

How does Method One, the all accounts method, work?

Financial Institutions submit a file identifying all open accounts to the State child support program.
The child support program conducts an internal match against delinquent obligors.
Some States may require only one All Accounts tape annually, followed by quarterly updates of accounts opened or closed.

How does the Matched Accounts Method Work?

The State child support program submits an inquiry file, containing delinquent obligors, to the Financial Institution.
The Financial Institution conducts an internal match against its open accounts.
The Financial Institution sends a tape match to the child support program reporting information on all accounts maintained by individuals on the inquiry file.
The match report must be returned to the State within 30-45 days of receipt of the inquiry file.
The child support program may issue liens or levies to attach and seize the asset(s) of the delinquent obligor.

Can a single-state Financial Institution be held liable for the release of account information relating to the FIDM program and the levies that may result?

No. Section 466(a)(17)(C) of the Social Security Act establishes that a Financial Institution shall not be liable under any Federal or State law to any person for any disclosure of information to the State IV-D agency under section 466(a)(17)(A)(i) of the Act.
Similarly, Financial Institutions shall not be liable under any Federal or State law for encumbering or surrendering any assets they hold in response to a notice of lien or levy issued by the IV-D agency.
Financial Institutions will not be held liable for any other action taken in good faith to comply with the requirements of section 466(a)(17)(A) of the Act.

How can I obtain additional information?

Financial Institutions may contact their State/professional associations or their State Child Support (IV-D) office.
The OCSE website at: /programs/cse/index.html

Financial Institution Data Match

Multistate Financial Institutions

With the recent trend in mergers more Financial Institutions are operating in multiple States. The Financial Institution Work Group members noted that the task of matching files submitted by many States appeared to be arduous, time consuming and costly to those Financial Institutions operating in two or more States. To alleviate these concerns and facilitate timely data matches, Public Law 105-200 added provisions to Title IV-D of the Social Security Act which allows the Federal Office of Child Support Enforcement (OCSE), through the Federal Parent Locator Service (FPLS), to assist States in conducting data matches with Multistate Financial Institutions (MSFI).

What are the goals of the Multistate Financial Institution Data Match?

To reduce the burden and associated costs imposed on MSFIs and States by the data match process required by PRWORA
To maintain the integrity and security of the financial and child support data
To provide for the quick disbursement of matched data to the appropriate States

How will Multistate Financial Institutions be notified?

All known MSFIs will receive a single OCSE/MSFI Operational Agreement during February 1999.

What is included in the single OCSE/MSFI Operational Agreement?

The means of data transmission selected by the MSFI
The reporting dates selected by the MSFI
If appropriate, the designated service providers chosen by the MSFI
An option to allow MSFIs to elect not to participate in the OCSE process in favor of participating with individual States.

How are fees handled in the Multistate Financial Institution Data Match?

Fees are the responsibility of each State and the MSFI.
OCSE will provide each MSFI and each State with an accounting of the total number of matches reported monthly.
OCSE will also provide each MSFI with a matrix of State fees.

Do States and MSFIs have the option of participating in the Multistate FIDM program?

States are required to coordinate with the Federal Parent Locator Service (FPLS) in the MSFI data match program.
MSFIs may choose not to participate in the OCSE Multistate Financial Institution Data Match program in favor of participating with the individual States.

How will the Multistate Financial Institution Data Match be conducted?

Currently, States and Territories send OCSE the Federal Offset File (used to intercept the Federal tax refunds and other federal payments of delinquent obligors).
OCSE will edit this file (to assure SSN integrity and to remove duplicate records) and transmit an inquiry file to MSFIs (Method 2 on the Financial Data Match Specifications Handbook).
MSFIs will conduct an internal match against their open accounts.
MSFIs will transmit a file to OCSE reporting information on all accounts maintained by individuals on the inquiry file as required by the Data Match Specifications Handbook.
OCSE will transmit the data returned from the Financial Institutions to the appropriate States.
The State child support program may issue liens or levies, in a manner consistent with State law, to attach and seize the asset(s) of the delinquent obligor.

Can Financial Institutions be held liable for the release of account information relating to the FIDM program?

No. Section 469(A)(a) of the Social Security Act states "a Financial Institution shall not be liable under any Federal or State law to any person for disclosing any financial record of an individual to a State child support enforcement agency attempting to establish, modify, or enforce a child support obligation of such individual, or for disclosing any such record to the Federal Parent Locator Service133"

When will the Multistate Financial Institution Data Match begin?

MSFIs will begin receiving OCSE/MSFI agreements in February 1999.
Data matching will begin June 1999.

How can I obtain additional information?

Financial Institutions may contact their State/professional associations or their State Child Support (IV-D) office to obtain additional information
The OCSE website at: /programs/cse/index.html

USES OF FIDM MATCH INFORMATION

September 27, 1999

Freeze and Seize Funds from Financial Accounts

The State child support agency establishes procedures to identify cases that meet arrearage threshold and other program screening criteria subjecting them to the data match with financial institutions and to any subsequent freeze and seize action. Financial institutions are required to encumber or surrender the assets of the delinquent obligor held by the institution in response to the freeze and seize notice from the state agency. The freeze and seize is subject to the laws of the state where the asset is located and to the due process provisions, account balance thresholds and exemption thresholds of those laws.

Locate Obligors

Most account applications request residence, employer, date of birth, social security number and other information that can be used to locate the obligor or to establish leads for locate purposes. If the financial institution is unwilling to furnish a copy of the application, the State can request a blank application then request specific information to open the account. The State child support office may use administrative subpoena power to obtain a copy of the application the non-custodial parent completed to open an account.

Establish or Modify Support Orders

Information about an obligor's financial situation assists the State in negotiating a fair and equitable support amount. More complete financial information is particularly helpful in cases where the obligor is self-employed or where there is no income verification.

Enforce a Payment Agreement

Knowing the account balance and how much is deposited in the account on a regular basis makes it easier for the State to identify how much is available for a payment agreement. In addition, the current balance and history of the account gives leverage to the enforcement agent to persuade the non-custodial parent to pay up or to make the obligor aware that the information could be shared with the Judge in court to prove the obligor has the ability to pay. In contempt proceedings against an obligor, the State can present evidence of an asset to assist the court in determining the proper amount of payment necessary to remove the contempt.

STATE PREPARATION FOR FIDM

September 27, 1999

Establish Freeze and Seize Policy and Procedures

Action Steps: Identify policy and procedures based on state laws governing freeze and seize of financial institution accounts (e.g., freeze period, dollar thresholds.) If process is judicial, issue legislation to move to administrative procedures. Issue legislation to authorize the data match.

Resources:

Federal Legislative Implementation Guide on Liens dated 11/8/96
Sample state policy and procedures in DCL-99-44, dated April 26, 1999

Federal policy in AT-98-05 (3/2/98), AT-98-07 (3/2/98), AT-98-29 (10/15/98) and PIQ-99-06 (8/16/99)

Develop Handbook of Instructions and Enrollment Forms, Identify FIs, Conduct Outreach

Action Steps: Develop a handbook of instructions advising institutions of reporting requirements and data specifications. Develop an agreement discussing responsibilities, timelines and fees, and an election form identifying available matching and data transmission methods. Identify financial institutions doing business within the state. Educate financial institutions through outreach efforts.

Resources:

Data specifications on Federal OCSE website www.acf.hhs.gov/programs/cse
Identifying financial institutions in DCL-98-120 dated 11/16/98 and DCL-99-11 dated 2/12/99
Generic agreement in DCL-99-15, dated February 17, 1999
Outreach articles and sample handbook in DCL-99-45, dated April 26, 1999
Brochure, video, PowerPoint presentation through OCSE, dial 301-587-4220 x254

Automate What is Appropriate

Action Steps: Develop forms, notices, letters and reports. Automate data specifications, generation of forms and letters, financial institution database, compliance tracking, program reporting and management reports.

Resources:

California management reporting, DCL-99-34, dated April 5, 1999
Massachusetts automation of FIDM, DCL-99-46, dated April 30, 1999

Provide for Customer Service and Public Relations

Action Steps: Establish a hotline, e-mail address and website to answer financial institution questions, and a direct line to answer questions from non-custodial parents. Build a working relationship with the state trade associations and operations staff of the financial institutions.

Staff and Train

Action Steps: Determine volume of workload and establish a review and appeal unit, customer relations and customer service units as needed. Train workers.

Federal Office of Child Support Enforcement (OCSE)

Financial Institution Data Match (FIDM)

"Tips" Sheet

September 27, 1999

Clarify freeze and seize policies within your State.
- Identify your State policy and procedure regarding freeze and seize actions (e.g. minimum arrears balance, no payment for x number of days).
- OCSE will produce a freeze and seize matrix to assist States with Administrative Enforcement of Interstate cases (AEI) actions.
Identify financial institutions operating in your State.
- There are several websites available to assist you in identifying financial institutions including http://www.fdic.gov and http://www.ncua.gov/
- OCSE has provided a list of multistate financial institutions (MSFIs) participating in the Multistate Financial Institution Data Match (MSFIDM) to the States and will continue to update that list on a monthly basis.
- States are notified within 24 hours of MSFIs that opt out of the MSFIDM process in favor of participating with the States in which they do business.
Hold interactive communication sessions between States and financial institutions.
- Meet with representatives of your financial institutions and provide them with information and keep them updated regarding implementation of the data match.
- Provide them with outreach materials (i.e. video, brochures) to assist in their understanding of the program and to get their "buy-in".
Develop a handbook for institutions outlining the data match process.
- Include background information, participation instructions and the required form for data exchange.
- Provide definitions of financial institution and account.
- Identify financial institutions that must comply with the law and discuss their liability protections.
- Outline the data match process by referencing data specifications that may be found on our website at http://www.acf.hhs.gov/programs/cse and identifying the types of data transmission available.
- Describe what happens when a match occurs and talk about fees.
- Provide a data match timeline by mapping out when operational agreements will be sent, timeline processing, and fee assessment information.
Develop an election form for financial institutions.
- Include instructions for completing the election form.
- Specify a due date and give the financial institutions a choice of media for the data exchange.
- Allow the financial institution to choose the quarter and the week within each quarter the institution would like to send or receive the data.
- Provide a section on the election form for the financial institution to identify a third party transmitter that they would like the data sent to with space for the transmitter’s address, FEIN, contact person, and phone number, fax number and email address.
Establish a website where financial institutions may contact you with questions or concerns regarding the data match process.
Manage the election process.
- Create and maintain a database that includes the name and address of the financial institutions, name and phone number of the contact person (usually the Compliance Officer), and states in which they operate for the purpose of tracking the election forms sent and received.
- If the election form has not been returned by the financial institution, a follow up phone call should be made to obtain status.
A financial institution questions hotline and email address should be set up for financial institutions only to ask questions about data specifications and the data match process.
A direct phone line should be available to all non-custodial parents (NCPs) subject to a freeze and seize action.
- No debtor subject to a seizure action should get a busy signal.
- The phone lines should be staffed by competent individuals who will have readily available answers to questions.
Manage the data exchange process by tracking the data going out to financial institutions and the data received from the financial institutions.
Build a relationship with the operations staff of the financial institutions most prevalent in your state.
- These relationships will ease mutual concerns about large volumes of freeze and seize actions.
Security procedures should be developed and tested as this program may upset NCPs who owe past-due support and have had their assets frozen.
- OCSE has developed a course entitled "Protecting You, the Client, and the Child Support Program in the Information Age."
- The course identifies potential threats to security of staff, property and data and provides recommendations to "beef up" security in child support offices.
Track results of FIDM.
- Total matches, actions taken and amounts collected.
- These figures will help States address issues raised by stakeholders and the press.

TIPS FOR IDENTIFYING FINANCIAL INSTITUTIONS IN YOUR STATE

September 27, 1999

Resources

DCL-98-120, dated November 16, 1998 - multi-state institutions

DCL-99-11, dated February 12, 1999 - single-state institutions

Entities

Agencies and associations that can assist with identifying financial institutions, providing mailing lists/labels, conducting outreach, selecting pilot sites and development of policy and procedures:

State bankers’ association
Community bankers’ association
Credit union affiliate
State revenue department
State department/commission of banking and finance
State department of business regulations

Websites

Access the Federal Deposit Insurance Corporation website at www.fdic.gov to identify banks, savings and loans, and thrifts.

Click on "Bank Data" on homepage
Click on "Institution Directory" on left-hand column
Click on "Advanced Options" at bottom of screen
Select state, scroll to "Sort By" and select "City, State", scroll to bottom and select "Find"
Click on "CERT" (certification number) to get address information.

Note: To update your list of FDIC institutions, select "Established Date" from the "Sort By" drop-down box, for institutions insured since the date of your last listing.

Access the National Credit Union Administration website to identify credit unions at www.ncua.gov.

Click on "Credit Union Data"
Click on "Individual Credit Union Data"
Select state from roll up window, scroll to top and select "Find"
Click on charter number to get address and phone information.

Deleting the DCL-98-120 names of multi-state institutions, from the website list of all institutions operating within your state, will result in a list of single-state institutions only. OCSE has provided an electronic copy of the list to each state FIDM liaison to make this deletion of multistate institutions easier.

FEES AND FFP

FINANCIAL INSTITUTION DATA MATCH

September 27, 1999

Resources

DCL-99-35, dated April 5, 1999

Policy

In accordance with Section 466(a)(17)(B) of the Social Security Act, the State child support agency may pay a reasonable fee to institutions conducting the financial institution data match, not to exceed the actual costs incurred by the institution.

Federal financial participation (FFP) is available at a rate of 66% of administrative expenditures for operational costs, including the cost of paying matching fees to financial institutions. FFP at a rate of 66% is available for state developmental costs. FFP is not available for development costs of financial institutions because there is no authority under the Act to pay for such expenditures.

State Experience

Some States have written into their legislation the option to reimburse financial institutions for conducting this data match with accounts of delinquent obligors. The amounts range from $150 to $250 per institution for each quarterly matching process. Generally, these figures are based on questioning a small number of financial institutions. In one case the $250 fee limit was based on what some service providers charge for all regulatory processing. States conducting pilots, such as Washington, found that many institutions performed the match for much less than the limit or for free. North Carolina has been successful in having its institutions perform the match at no cost. Since the fees established thus far may not be a valid indicator of reasonable fees for every type institution in every State, it will be very important for States to rely on billing documentation to determine reimbursement amounts based on actual costs.

Negotiating Fees

Since there is no universal fee limit that can be applied across the board, the following are factors States might consider and discuss when negotiating reimbursement fees with financial institutions:

Other income to the financial institution for related activities including lien and levy fees;
State's experience with standard charges for the institution's expected outlays (e.g., computer processing time, storage supplies, and transmission) including regional differences;
Spreading costs of the multi-state institution among the states where it does business;
Spreading costs of processors among the institutions it serves; and
Contribution of the institution in helping families and children and in supporting its employees and community.

Billing Documentation

Attached is a worksheet that suggests some cost areas states may ask financial institutions to document on their invoice.

FINANCIAL INSTITUTION - SUMMARY OF COSTS

FOR CHILD SUPPORT DATA MATCH

September 27, 1999

START UP COSTS

a. Labor time to create program ____________ (hr, min, sec)

b. Hourly labor rate $___________

c. Labor cost to create program (a*b) $___________

d. CPU time to create program ____________/(hr, min, sec)

e. CPU cost rate $___________/(hr, min, sec)

f. CPU cost to create program (d*e) $___________

Total Start-Up Costs (c+f) $___________

QUARTERLY MATCHING COSTS

g. Labor time to process match/extract ____________ (hr, min, sec)

h. Hourly labor rate $___________

i. Labor cost to process match/extract (g*h) $___________

j. CPU time to process match/extract ____________/(hr, min, sec)

k. CPU cost rate $___________/(hr, min, sec)

l. CPU cost to process match/extract (j*k) $___________

m. Postage, mailing, supplies cost $___________

Total Quarterly Match/Extract Costs (i+ l+m) $___________

OUTREACH TIPS

FINANCIAL INSTITUTION DATA MATCH

September 27, 1999

Resources

DCL-99-45, dated April 26, 1999 - Outreach Materials for FIDM

DCL-99-34, dated April 5, 1999 - California FIDM Handbook

DCL-99-15, dated February 17, 1999 - Generic Agreement for In-state FIDM

DCL-98-120, dated November 16, 1997 - Certification Addendum for Multi-state FIDM

OCSE developed a brochure, video, PowerPoint presentation and script that are available by writing J&E Associates, 1100 Wayne Avenue, Suite 820, Silver Spring, MD 20910 or phoning Mironda Thomas at 301-587-4220 x254.

Strategies

obtain mailing addresses/labels from state trade associations or state finance, tax or regulatory agencies;
distribute information as a mail stuffer;
establish a website and link it with the websites of the state trade associations;
write an article for publication in, or reproduce articles from relevant trade journals;
obtain letters of support from directors of state trade associations and invite them to present at meetings with representatives of financial institutions;
get bipartisan endorsements from state elected officials;
publish information on your or another state's collections for child support from the data match; and
distribute a FIDM packet containing a cover letter, FIDM policy overview, instructions, system specifications handbook, a summary of relevant state legislation, and election and waiver forms.

Attachments

Dear Colleague Letter (DCL-98-120, dated November 16, 1998), describes the process for entering into agreements with multi-state institutions to conduct the financial industry data match through the Federal Parent Locator Service (FPLS). Attached are two generic agreements and transmittal sheet which States may adapt to their legal requirements, procedures and automated systems for entering into agreements with in-state financial institutions and multi-state financial institutions not opting to use the FPLS.

The first, more formal agreement, is intended for situations where there is cost reimbursement. The second, more streamlined agreement, is better suited for a no cost reimbursement situation where the financial institution is merely agreeing to begin reporting. The generic agreements and transmittal were developed by incorporating ideas and language from existing agreements for several States. They are not intended to be standardized agreements. Rather they may be used as models for adaptation to a State's particular requirements and environment.

MAIL STUFFER FACT SHEET

Financial Institution Data Match

September 27, 1999

Public Law 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), requires States to establish procedures under which the State child support enforcement (IV-D) agency to enter into agreements with financial institutions doing business in the State for the purpose of securing information leading to the enforcement of child support orders. The State shall develop and operate, in coordination with these financial institutions, a data match system in which each financial institution will provide quarterly the name, record address, social security number or other taxpayer identification number for each noncustodial parent who maintains an account at such institution and who owes past-due support. The State must supply the name and social security number or other taxpayer identification numbers. These procedures must provide for automated data exchanges to the maximum extent feasible.

Financial institutions that must participate in the match include banks, credit unions, savings and loans, benefit associations, insurance companies, safe deposit companies, money-market mutual funds, and similar institutions. Accounts subject to the data match include demand deposit accounts, checking accounts or negotiable withdrawal order accounts, savings accounts, time deposit accounts, and money-market mutual fund accounts.

The data matches are done by either of the following two methods using data specifications approved by the U.S. Office of Management and Budget (OMB Control No: 0970-0196) on March 5, 1999. Under Method 1 (all accounts method), the financial institution submits a file containing all open accounts which is matched against records of delinquent obligors. Under Method 2 (matched accounts method), the financial institution receives a file of delinquent obligor records, matches the file against open accounts, and submits a file of matched records.

Section 466(a)(17)(B) of the Act establishes that the State child support agency may pay a reasonable fee to institutions conducting the data match, not to exceed the actual costs incurred by the institution. Some States have written into their legislation the option to reimburse financial institutions for conducting the data match.

Pursuant to Section 466(a)(17)(C) of the Act, a financial institution will not be liable under any Federal or State law to any person for: (1) any disclosure of data match information to the State IV-D agency, (2) encumbering or surrendering any assets held by a financial institution in response to a notice of lien or levy issued by the State IV-D agency, or (3) any other action taken in good faith to comply with the requirements of Section 466(a)(17) of the Act.

Public Law 105-200, the Child Support Performance and Incentive Act of 1998, modified PRWORA to allow the Federal Office of Child Support Enforcement (OCSE) to use the Federal Parent Locator Service (FPLS) to facilitate the data match for multistate financial institutions (MSFI) (i.e., those operating within two or more States). Public Law 105-200 authorizes OCSE to act as the conduit between the States and territories and the MSFIs in the development and implementation of a centralized, quarterly data match program. Multistate financial institutions may opt to match through the OCSE or with the individual states in which they do business.

FIDM WAIVER

September 27, 1999

Background

If a State recognizes that the quarterly data match may place an initial burden on certain financial institutions, it may choose to grant a waiver from the data match requirements.

Criteria

A State sets it's own waiver criteria. Examples of conditions selected by some States include:

the total number of accounts held by the institution is below a certain number (e.g., 250 which is the floor established by IRS for requiring Form 1099 magnetic media reporting);
the institution does not maintain information on a computerized record keeping system; and
the required system modifications constitute an initial burden to the institution undergoing complex system changes (e.g., Y2K).

Waiver Request Form

Generally, States require the institution to complete a waiver request form includes identifying information about the financial institution, the reason for the waiver, the length of period for which the waiver is requested and an official signature.

Institution Information:

Name: FEIN:

Contact: Phone:

Street Address: Mailing Address (if different from street address):

Criteria:

a) Number of active accounts? __________

b) Accounts on a computerized record keeping system: ______ yes ______ no

If no, when do you plan to implement computerized record keeping? Date ___________

c) Facing complex systems changes? ______ yes ______ no

If yes, please explain: ______________________________________________________

If no, when do you plan to implement the required data match changes? Date ___________

Action:

Calendar year quarters for which requesting a waiver:

_____ quarter 1 _____ quarter 2 _____ quarter 3 _____ quarter 4

FIDM PRIVACY AND SECURITY

September 27, 1999

Federal law requires that a State child support enforcement agency which obtains a financial record of an individual from a financial institution pursuant to the data match system described in subsection 466 (a) (17) of the Act may disclose such financial record only for the purpose of, and to the extent necessary in, establishing, modifying or enforcing a child support obligation of such individual. The civil damages, through civil action in a United States district court, described in subsection 469A (c) of the Act apply to any unauthorized disclosure.

States must comply with the requirements of title IV-D of the Act pertaining to the safeguarding of data, including those provisions that specifically apply to the operation of the financial institution data match system. States must have appropriate administrative, technical, and physical safeguards to ensure the security and confidentiality of both IV-D data and financial records, as well as any data matches resulting from comparisons of these records.

States must establish measures to ensure that 1) data obtained for the purpose of operating the financial institution data match system is 1) used for no other purpose; 2) disclosed to and used by only those individuals who require the use of such data in the performance of their official duties; and 3) retained only so long as necessary for the effective operation of such system and thereafter disposed in a manner that preserves its confidentiality.

Measures States can take to ensure the safeguarding of data include:

development of policies and procedures,

screening and periodic training of personnel,

bonding of contractor's employees and all subcontractors,

execution of non-disclosure oaths by the contractor's employees and subcontractors,

detection of unauthorized/illegal activities and periodic reporting to the agencies of number of authorized disclosures, incidents of unauthorized disclosure,

retention and disposition of data,

physical and environmental security, and

contingency planning to maintain critical functions in the event of disruptions.

QUESTIONS FREQUENTLY ASKED BY FINANCIAL INSTITUTIONS

September 27, 1999

Is my financial institution a multi-state or a single-state institution?

That determination would be whether the FI is chartered in more than one state.

Q. What type of accounts are included in the match process?

The determination of whether an account should be included in the match process is if the account is liquid. Checking, demand deposit, savings, time deposit accounts and money market mutual funds are included in the match process. If an IRA or trust contains liquid accounts, then they would be included in the match.

How does the Method 1 process work?

The participant FI sends information on all open accounts for the first quarter of participation in a calendar year. For the remaining quarters of the year, information may be sent for only the accounts that changed (opened or closed) during that quarter.

How many records are on the state's Method 2 Inquiry Tape?

Each state must develop its own answer.

Is reimbursement of the institution's development and operational costs available?

Each state needs to develop its own answer.

How is the institution reimbursed for its garnishment processing fee?

Each state needs to develop its own answer.

We filed an election form to participate, but our system is not ready. What do we do now?

Each state needs to develop its own answer.

Could we match through the Federal Multistate Match Program?

Only multistate financial institutions have the option of matching against a national file through the Federal program, or matching against state files with the individual states where the institution does business. Contact the Federal FIDM hotline at 410-277-9312 or its website at www.acf.hhs.gov/programs/cse/indes.html for information about its program.

What is the financial institution's liability for the release of account information?

Under Sections 466(a)(17)(C) and 469A of the Social Security Act, financial institutions will not be liable under any Federal or State law to any person for disclosure of any account information to the State child support agency, or to the Federal Parent Locator Service, or for surrendering any assets held by the institution.

What if the account is closed or has a negative balance when a notice of freeze is received?