Issue:
Should the Department of HHS be authorized to perform data matches and to seize assets held by multi-state institutions, which would be transmitted by OCSE to the states for distribution?
Background:
The seizure of assets through the Financial Institutions Data Match (FIDM) has been an important and successful addition to the remedies used by IV-D Child Support Enforcement Program. Some states have made more use of this program than others. Those states that have used this remedy have had the opportunity to develop close collaboration and cooperation between the program and financial institutions, especially those institutions within each state. Collaboration with multi-state institutions has been more elusive for many states. Full faith and credit for orders entered in one state and enforced in another state although required by PRWORA are not always easily honored.
However, solving this problem by the creation of a process very similar in design as the IRS Tax Intercept Program, needs further review. State issues, include:
* Customer service issues, Customer service issues that arise from wrongly attached accounts, different processes for in-state and multi-state FIDM, confusion about appeals, the inability to designate account type, size and priority for freezing.
* Increased costs to states for fees imposed by OCSE as well as increased costs to customers for fees imposed by financial institutions.
* Automated system change requirements
* State law changes required to conform with the federal process
* Due process.
Proposal:
NCCSD strongly recommends that more time be allotted to the discussion of the design of this program before being enacted into law. In the meantime, Congress should clarify and strengthen the intent of cooperation expected between states and financial institutions for full faith and credit. OCSE should develop regulations to clearly establish a process in interstate cases, including the development of a standard transmittal form from states to financial institutions.
NCCSD Statement in Support:
Although NCCSD supports the FIDM and the MS-FIDM process, NCSSD recommends slowing the development of further federal legislation until a standard process that states can implement be defined and a standard form is developed and tested.