SACRAMENTO, Calif. -- In accordance with the Welfare Reform Act of 1996, the California Franchise Tax Board has been authorized to oversee what is known as the financial institution data match program, a program designed to catch parents who have been delinquent on their child support payments within the state.
Because of the new program, many California residents may soon discover that their financial account records are in the hands of state bureaucrats, but it isn't just California residents that need to be concerned about the program. Every other state in the union needs to comply with the federal law by the third quarter of this year. Currently, Massachusetts is the only other state that is implementing the program.
The Welfare Reform Act of 1996, recorded in the law book as Public Law 104-193, states, in part, that a data match system will be implemented in which every financial institution in all 50 states will be "required to provide for each calendar quarter the name, record address, social security number or other taxpayer identification number and other identifying information for each noncustodial parent who maintains an account at such institution and who owes past-due support."
There are two ways that financial institutions can comply with the law, according to Jim Shepherd, spokesman for the California Franchise Tax Board. The first way is to send all account information to the appropriate state agency and have the agency match all the records against the state's delinquency list. The second way is to have the financial institutions request the delinquency list from the state and to match the appropriate accounts with the names on the list themselves.
Either way, the hope is that delinquent parents will be caught and be made to pay the child support payments -- a sum that, in California alone, amounts to more than seven billion dollars.
Although the purpose of the program is to help parents who count on child support payments, some concerns have been made regarding privacy issues. Shepherd said that people have a right to be concerned and that his agency shares those concerns.
Explaining his agency's concerns, Shepherd said, "We're entrusted with a lot of data. We have privacy concerns, and we're very sensitive about it. In fact, we're very, very strict about the security with all the data we have."
Shepherd said that he wants to assure everyone with an account at a financial institution that the information will only be used for delinquent child support collections. The information can be used for no other reason.
When WorldNetDaily asked Shepherd if the program was in any way connected to the Federal Deposit Insurance Corporation's
"Know Your Customer"
plan, he assured the newspaper that it was not.
Adrian Rodriquez, spokesman for Washington Mutual Bank, said that his bank doesn't plan to participate in the California program or any other state program but will participate in the program at the federal level.
"The federal government is running the same program as the states, but they're offering it for banks like Washington Mutual that are multi-state in scope," Rodriquez said.
Rodriquez said that because Washington Mutual is concerned about maintaining their customer's privacy, they will be doing the matching of delinquents with accounts themselves.
Kathleen Shilkret, a public relations officer for Wells Fargo said that her bank will be doing its own matching as well. Although her bank is currently sending matched files to the California Franchise Tax Board, the bank will eventually send matched files to the Child Support Enforcement Unit of the Department of Health and Human Services once the federal program begins later this year.
"Under no circumstances -- no way, no how -- are we going to send the entire account profile," Shilkret said. "We don't think there's any reason to send records of all our accounts to the state."
Shilkret told WorldNetDaily that out of all the file matching her bank completed, about 22,000 delinquent matches had been found across the state of California.
"We have to look at this as a two-pronged issue," Shilkret said. "On the one hand, we recognize the social good that's behind this. On the other hand, we're concerned about the privacy issue."
Of all the financial institutions in California, 256 of them have currently complied with state and federal laws, according to Shepherd. Of the 256 institutions, 126 have opted to do their own matching programs while the others have sent it to the state Franchise Tax Board for matching. Shepherd said that 500 other financial institutions have been given waivers that will allow them to postpone their reporting requirements until later this year so that they can work on Y2K problems.