Illinois Bankers Association

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Multi-State Data Matching for Unpaid Child Support

By now, your bank likely has received a letter and an amended contract from either the Illinois Department of Healthcare and Family Services (DHFS) or a company called Informatix. The DHFS is asking Illinois financial institutions to participate in the expansion of the Illinois data match program for unpaid child support to nineteen other states that utilize the same third-party vendor (Informatix) as Illinois for administering the program. 
We want you to know that the Illinois Bankers Association negotiated the terms of this amended agreement with the DHFS last year and is not opposing this extension of the program. We also want you to know that you do not need to agree to this amendment – in other words, it is voluntary and not required by Illinois or federal law. The decision to accept and sign this amended agreement rests with your bank.
Background: Since the early 2000s, as required by federal law, financial institutions in Illinois have been sharing customer data under written agreements with the DHFS, which uses this data to “match” responsible relatives who owe past-due child support. Participation in the Illinois program is mandatory. Financial institutions have two options for sharing data with the DHFS:
Method 1 requires the financial institution to provide the social security or tax identification numbers of all accountholders to the DHFS on a quarterly basis.
Method 2 requires the financial institution to conduct its own search for data matches by comparing its accountholder data with a DHFS-provided list of responsible relatives with past-due child support. The financial institution must forward any matches to the DHFS on a quarterly basis. 

Informatix has informed us that approximately 75% of Illinois financial institutions use Method 1, and approximately 25% of Illinois financial institutions use Method 2. Whether an institution uses Method 1 or Method 2, these processes are executed automatically, either through the financial institution’s core processor or by Informatix providing a separate API (application programming interface) that plugs into the institution’s in-house computer system. Beyond that, a handful of very small financial institutions in Illinois conduct and report their data match searches manually.
The Proposed Amended Agreement. The DHFS would like to share Illinois financial institution data on a reciprocal basis with the nineteen other states that use Informatix for this program. Currently, the DHFS does not automatically share Illinois data with these other states, although many multistate financial institutions 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 the federal law for institutions with an interstate presence). 
Discussion. The federal law does not require in-state financial institutions to participate in multistate data matching; in other words, for most Illinois banks and thrifts, the DHFS’ proposal is voluntary. In the distant past, the IBA resisted a DHFS proposal for multistate data matching and recommended to our members that they decline a request to amend their agreement with the DHFS to allow their data-matched customer information to be shared with other states. Now, however, after many years’ experience with the data match program, it appears that data matching for unpaid child support has become a virtually seamless, automated process, and adding other states should not impose undue burdens. 
The DHFS does not foresee any additional costs or operational problems for financial institutions that agree to multistate data matching. Financial institutions that participate will do so by amending their DHFS agreements to permit the sharing of their data with other states. Data matching will continue to be executed automatically through core processors or separate software modules. For the small number of institutions that perform data matches manually, the DHFS will not require them to participate in multistate data matching.
The principal argument against participating in multistate matching is that financial institutions may experience an uptick in matches and liens on accounts. However, the DHFS will continue to reimburse the actual costs incurred in performing data matches, and financial institutions may continue to collect fees when enforcing DHFS liens. We believe that the additional burden for participating financial institutions should be nominal.
Please feel free to call us at 1-800-GoToIBA (1-800-468-6422) if you have any questions.

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