Financial Institution Data Match In-State Match State Guidance
In-State Match Implementation Overview
Pursuant to Section 466(a)(17) of the Social Security Act, state child support enforcement (IV-D) agencies are required to establish data matching procedures with financial institutions (FIs) doing business in their state to obtain information that results in collecting past-due child support. For more on the background of this process, including legislative authority, click here.
As a result of this requirement, states have taken the following four steps to implement their in-state data match:
- Enact legislation to authorize the data match
Develop Instructions for Financial Institutions
• Develop an agreement discussing responsibilities, processing timelines and fees, and an election form for the institution to choose a matching method, data transmission methods, and week within each quarter the institution would like to send or receive data.
• Publish instructions providing background information, reporting requirements, and data specifications.
Identify Financial Institutions and Conduct Outreach (see below for more detailed information on conducting outreach)
• Identify financial institutions doing business within the State.
Automate Data Exchange
• Automate data specifications, generation of forms and letters, financial institution database, compliance tracking, and program and management reporting to track matches and collections.
• Maintain a database that includes the name and address of 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 forms and transmissions sent and received.
If process is judicial, enact legislation to move to administrative procedures
Identify policy and procedures based on State laws governing freeze and seize of financial institution accounts (e.g., freeze period, dollar thresholds). For more detailed information on the Freeze/Seize process, please see below
States must also establish Freeze and Seize Policy and Procedures in order to garnish assets belonging to delinquent obligors. States have statutes that govern the execution of liens and levies. These statutes usually establish parameters, define terms and establish procedures. Items addressed usually include:
• Lien threshold - the amount that the lien-eligible debt must equal or exceed before a lien is issued.
• Arrearage debt - the sum of child support arrears.
• Lien duration - the time period the lien is in effect.
• Due Process- the right to notice of the lien and to appeal.
For more detailed information on the Freeze and Seize Interstate Processing guidelines and procedures, click here.
- Implement successful customer service, outreach, and agency resources
Provide for Customer Service and Public Relations
• Establish a hotline, e-mail address and website to answer financial institution questions.
• Operate a direct phone line to answer questions from custodial and non-custodial parents.
• Build a working relationship with the State trade associations and operations staff of the financial institutions.
States have three options for implementing various aspects of the data match. These options include program development by: a) the State child support enforcement agency or other State agency (e.g., revenue) through an interagency agreement, b) a private vendor through an individual competitive procurement by the State, and c) a private vendor through a competitive procurement involving a multistate consortium. Half of the States have elected to join a consortium (option c). Of the remaining States, a majority have chosen implementation by the child support enforcement or other State agency (option a).
State outreach to financial institutions (FI) is designed to accomplish the following:
• Educate financial institutions about the data match requirement;
• Get FI cooperation and support for the data match;
• Communicate to all parties having a need to know about the data match;
• Provide FIs with State point(s) of contact;
• Inform FIs of instructions to follow in order to participate in the match; and
• Establish a good working foundation leading to smooth implementation and operation of the data match.
• Obtain mailing addresses/labels of financial institutions 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 articles for publication in relevant trade journals;
• Develop a mail stuffer for use by State finance and tax agencies and by trade associations (see attached);
• 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 success stories and information on State collections for child support from the data match;
• Establish data match and freeze/seize contact phone numbers; 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.
Typically States prepare guidance packets or handbooks for financial institutions that include the following:
• Sections of pertinent federal and State laws;
• Data specifications;
• Agreement forms to participate in the data match;
• Description of State lien and levy process with sample lien and levy forms;
• Frequently asked questions; and
• Contact for technical assistance.
Agreement forms are developed by States to detail the understanding between the State and single-state financial institution. The terms generally addressed in the agreement form include:
• Match method selected by the financial institution;
• Transmission method selected by the financial institution;
• Week or month of quarter selected by financial institution to perform the match;
• Agent/service processor designated by the financial institution; and
• State cost reimbursement and billing instructions (if applicable).
Agencies and associations that can assist with identifying financial institutions, providing mailing lists/labels, conducting outreach, selecting pilot sites and developing policy and procedures include:
• State bankers’ association
• Community bankers’ association
• Credit union affiliates
• State revenue department
• State department/commission of banking and finance
• State department of business regulations
OCSE provides an updated list of multi-state institutions to State IV-D Directors and State FIDM liaisons on a monthly basis. Deleting the names of these multistate institutions from the website list of all institutions operating within a state will result in a list of single-state institutions only. OCSE provides each State FIDM liaison an electronic copy of the list of multi-state institutions, making deletion of multi-state institutions easier. In addition, OCSE notifies States of multistate financial institutions that opt out of the MSFIDM process in favor of participating with the States in which they do business within 24 hours of receiving such notice from the FI.
States may establish policy governing what cases are exempt from lien/levy action, setting priorities to focus on certain type cases, handling joint accounts, and handling hardship cases. (States, what other matters are addressed in policy?) For instance, States may exempt cases where the obligor has been adhering to a payment plan. States may give priority to issue a lien against an obligor who a) owes a large amount of arrears, b) pays only when ordered by a court, c) attempts to hide assets, or d) is difficult to serve.