IBA Compliance Connection

Your go to source for compliance!

We have received an updated agreement from the Illinois Department of Healthcare and Family Services (DHFS) regarding Financial Institution Data Match (FIDM) services. Are we required to enter into this new agreement? Are there any privacy or liability issues with participating in the data match? Currently, our core processor conducts the data matches and sends the information to the DHFS.

—

by

admin

No, your bank is not required to enter into this new agreement with DHFS, which authorizes multistate child support data sharing, although we believe most Illinois banks will do so.

Federal and Illinois law require financial institutions to share customer data under written agreements with the DHFS, which uses this data to “match” responsible relatives who owe past-due child support. Previously, the DHFS did not share Illinois data with other states, although many multistate financial institutions already do share their data across state lines through the federal Office of Child Support Enforcement data match program (which was created for this purpose in federal law). However, the DHFS wishes to expand the Illinois data match program for unpaid child support to nineteen other states that utilize the same third-party vendor as Illinois for administering the program.

To participate in Illinois’ new multistate data matching process, financial institutions may — but are not required to — enter into an amended DHFS agreement to expressly permit data sharing with other states. If your bank chooses to engage in multistate data matching with DHFS, your core processor will continue to submit data to DHFS exactly as it did before. Only now, DHFS will share the data with other states on a reciprocal basis, while continuing to reimburse the actual costs incurred in performing data matches.

We do not believe that sharing customer information with the DHFS under the new agreement (or a previous version of the agreement) raises any privacy or liability issues for your institution. The Social Security Act (SSA) offers broad liability protection for financial institutions that disclose personal information to “a State child support enforcement agency attempting to establish, modify, or enforce a child support obligation of such individual.” Notably, that law does not limit liability protection to sharing data with Illinois; it encompasses data sharing with any state child support enforcement agency. The federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996, the Illinois Public Aid Code, and the Illinois Banking Act, all contain similar liability protection provisions.

For more information, we have published an IBA Special Alert on this issue.

For resources related to our guidance, please see:

  • Illinois Public Aid Code, Financial Institution Data Match Program, 305 ILCS 5/10-24.5(a) (“The Illinois Department may design and implement a data match system pursuant to which the Illinois Department shall enter into agreements with financial institutions doing business in this State for the purpose of identifying accounts as defined in Section 10-24 of responsible relatives who owe past-due child support.”)
  • Social Security Act, 42 USC 669a (“Notwithstanding any other provision of Federal or State law, 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. . . .”)
  • Personal Responsibility and Work Opportunity Reconciliation Act of 1996, 42 USC 666(a)(17)(C) (“A financial institution shall not be liable under any Federal or State law to any person (i) for any disclosure of information to the State agency under subparagraph (A)(i) [entering into an agreement with a State agency to develop and operate a data match system].”)
  • Illinois Public Aid Code, 305 ILCS 5/10-24.50 (“A financial institution that provides information under Sections 10-24 through 10-24.50 shall not be liable to any account holder, owner, or other person in any civil, criminal, or administrative action for any of the following:

(1) Disclosing the required information to the Illinois Department, any other provisions of the law notwithstanding.

(2) Holding, encumbering, or surrendering any of an individual's accounts as defined in Section 10-24 in response to a lien or order to withhold and deliver issued by: (A) the Illinois Department under Sections 10-25 and 10-25.5; or (B) a person or entity acting on behalf of the Illinois Department.

(3) Any other action taken or omission made in good faith to comply with Sections 10-24 through 10-24.50, including individual or mechanical errors, provided that the action or omission does not constitute gross negligence or willful misconduct.”)

  • Illinois Banking Act, 205 ILCS 5/48.1(b)(14) (“This Section does not prohibit: . . . (14) The furnishing of information in accordance with the federal Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Any bank governed by this Act shall enter into an agreement for data exchanges with a State agency provided the State agency pays to the bank a reasonable fee not to exceed its actual cost incurred. A bank providing information in accordance with this item shall not be liable to any account holder or other person for any disclosure of information to a State agency, for encumbering or surrendering any assets held by the bank in response to a lien or order to withhold and deliver issued by a State agency, or for any other action taken pursuant to this item, including individual or mechanical errors, provided the action does not constitute gross negligence or willful misconduct. A bank shall have no obligation to hold, encumber, or surrender assets until it has been served with a subpoena, summons, warrant, court or administrative order, lien, or levy.”)