03-23134. Access to Information Held by Financial Institutions

AGENCY:

Social Security Administration.

ACTION:

Final rule.

SUMMARY:

We are revising our regulations to implement a law that will enhance our access to financial account information of Supplemental Security Income (SSI) applicants and recipients and other individuals whose income and resources we consider as being available to the applicant or recipient.

EFFECTIVE DATE:

These regulations are effective October 14, 2003.

FOR FURTHER INFORMATION CONTACT:

Martin Sussman, Regulations Officer, Office of Regulations, 100 Altmeyer Building, Social Security Administration, 6401 Security Boulevard, Baltimore, MD 21235-6401, [e-mail], [phone] or TTY [phone] for information about these rules. For information on eligibility or claiming benefits, call our national toll-free numbers, 1-800-772-1213 or TTY 1-800-325-0778 or visit our Internet Web site, Social Security Online, at http://www.socialsecurity.gov/​.

Electronic Version: The electronic file of this document is available on the date of publication in the Federal Register on the Internet site for the Government Printing Office: http://www.access.gpo.gov/​su_​docs/​aces/​aces140.html. It is also available on our Internet site, Social Security Online: http://www.socialsecurity.gov/​regulations.

SUPPLEMENTARY INFORMATION:

Background

Section 1631(e)(1)(B) of the Social Security Act (the Act) requires the Commissioner of Social Security to verify all relevant information provided regarding the eligibility of SSI applicants and recipients. Section 213 of the Foster Care Independence Act of 1999, Public Law 106-169, amended section 1631(e)(1)(B) of the Act to grant the Commissioner new authority with respect to verifying financial accounts. Under section 213, the Commissioner may require each SSI applicant or recipient to provide us with permission to obtain any financial record (as defined in section 1101(2) of the Right to Financial Privacy Act) held by any financial institution (as defined in section 1101(1) of the Right to Financial Privacy Act) with respect to the applicant or recipient. This law also allows the Commissioner to require such permission from deemors (i.e. individuals whose income and resources we consider as being available to the applicant or recipient).

This law requires us to tell you, or any other person whose income and resources we consider as being available to you, how we will use the permission and how long the permission lasts. It also allows us to request the information from financial institutions without furnishing a copy of the permission to the financial institution. We may request the information from financial institutions at any time we think it is needed to determine your eligibility or payment amount. Requests under this provision are considered to meet the requirements of the Right to Financial Privacy Act regarding identification and description of the financial record to be disclosed.

This law also allows us to deny your SSI eligibility or suspend your SSI eligibility if you, or any person whose income and resources we consider as being available to you, refuses to provide or cancels the permission.

Explanation of Changes

The Commissioner is exercising her authority under section 213 of the Foster Care Independence Act of 1999 by promulgating new rules to make giving permission to contact financial institutions a condition of SSI eligibility. Therefore, we are amending our regulations by adding a new section § 416.207 to explain that in order to receive SSI benefits, you must give us permission to contact any financial institution, and request any financial records that financial institution may have for you. The section further explains that the permission to contact financial institutions is required from anyone whose income and resources we consider as being available to you, unless there is good cause why the permission cannot be obtained. This section also explains that the permission to contact financial institutions lasts until one of the following terminating events occur:

(1) You cancel the permission in writing and provide the writing to us.

(2) The deemor cancels their permission in writing and provides the writing to us.

(3) The basis on which we consider a deemor's income and resources available to you ends, e.g. when spouses separate or divorce or a child attains age 18.

(4) Your application for SSI is denied, and the denial is final. A denial is final when made, unless you appeal the denial timely as described in §§ 416.1400 through 416.1499.

(5) You are no longer eligible for SSI as described in §§ 416.1331 through 416.1335.

This section explains that we will ask financial institutions for this information when we think that it is necessary to determine SSI eligibility and payment amount. This section defines a financial institution as any bank, savings bank, credit card issuer, industrial loan company, trust company, savings association, building and loan, homestead association, credit union, consumer finance institution, or any other financial institution as defined in section 1101(1) of the Right to Financial Privacy Act. The section also defines a financial record as an original of, a copy of, or information known to have been derived from any record held by the financial institution pertaining to your relationship with the financial institution.

In addition, we are revising current § 416.200 to add the new section § 416.207 as a reference, to redesignate current § 416.1321 as § 416.1320, and to add a new section § 416.1321, “Suspension for not giving us permission to contact financial institutions,” to Subpart M as a reason for suspending SSI benefits.

Public Comments

On May 2, 2002, we published proposed rules in the Federal Register at 67 FR 22021 and provided a 60-day period for interested parties to comment. We received comments from ten organizations and four individuals. Because some of the comments received were quite detailed, we have condensed, summarized or paraphrased them in the discussion below. We address all of the significant issues raised by the commenters that are within the scope of the proposed rules. We have made revisions to the proposed rules to address some of the concerns of the commenters.

Comment: Ten organizations submitted comments regarding the fact that deemors (i.e. individuals whose income and resources we consider as being available to the applicant or recipient) are required to provide us with permission to obtain any financial record held by any financial institution with respect to the deemor as a condition of the applicant's or recipient's eligibility. Specifically, these organizations stated that we should provide a good cause exception for applicants and recipients who act in good faith to obtain the permission from the deemor, but are unable to do so through no fault of their own. In addition, six organizations stated that we should provide a good cause exception from this third party requirement for applicants and recipients who are victims of domestic violence. These organizations believe that it is improper to deny or suspend benefits because of the actions of a third party.

Response: After careful consideration, we have decided to include a limited good cause exception. We believe a good cause exception is warranted because it is consistent with our current policy. Good cause might exist in cases where the applicant or recipient cannot obtain permission from a deemor to access their financial records because the deemor is harassing, abusing, or endangering the life of the applicant or recipient. Good cause may also exist in cases where the applicant or recipient acts in good faith to obtain the permission from certain deemors, but is unable to do so through no fault of their own. We have revised §§ 416.207 (g) and 416.1321(a), and added § 416.207(h) to include the good cause exception. These provisions are consistent with our current policy regarding a third party's failure to cooperate.

In § 416.207(h)(3) we explain that good cause does not apply if certain deemors (i.e. someone whose income and resources we consider as available to you) refuse to give us permission to access their financial records. It is our long-standing policy to deny an applicant benefits or suspend a recipient's benefits if the applicant or recipient's prospective or appointed representative payee, who is also the legal guardian or parent with custody of a minor child, or if an alien's sponsor or sponsor's living-with spouse, fails to provide requested information. In these situations, the legal guardian or custodial parent stands in the shoes of a legally incompetent individual. The sponsor of an alien likewise has taken on a special obligation with respect to the alien by signing an affidavit of support. It is these special legal statuses that distinguish these deemors from others.

Refusal on the part of a parent or legal guardian to comply with an authorization request from us is the same as the applicant or recipient themselves refusing to comply. In the sponsor's situation, a refusal to comply would be inconsistent with their obligation under the affidavit to support the recipient and could undermine the intent of the affidavit of limiting the expenditure of public funds. Thus, the good cause exception is not designed to address such situations, but instead is intended primarily for the situation of a married recipient whose uncooperative spouse lives in the same household but does not stand in the shoes of the recipient nor does the spouse have a delineated obligation of support. However, if a deemor as outlined in § 416.207(h)(3) refuses to provide us access to his or her financial records, we would not find good cause for such a refusal.

Comment: Two organizations submitted comments recommending that we revise our language when we refer to “anyone whose income and resources we consider as being available to you.” The organizations believe that it would be useful to insert language, which states that deeming situations are the only circumstances when third party permission will be required.

Response: While we did not adopt this suggestion, we made a clarification to show that the individuals in question are deemors. We believe the language used is appropriate and is consistent with the language in section 213 of the Foster Care Independence Act of 1999. In the background section we state that “individuals whose income and resources we consider as being available to the applicant or recipient” are deemors and the words “i.e. deemors,” were inserted in § 416.207(a).

Comment: Two organizations stated that we should include a provision that states that the permission we obtain to access the financial records of third parties (i.e. deemors) will terminate when deeming is no longer required.

Response: We are adopting this suggestion. The regulation states that “you must also provide us with permission from anyone whose income and resources we consider as being available to you, i.e., deemors (see §§ 416.1160, 416.1202, 416.1203, and 416.1204).” We have revised § 416.207(f) and added § 416.207(f)(3) to clarify that the permission we obtain to access the financial records of deemors will terminate when deeming is no longer required and to clarify that when a terminating event occurs, the permission to contact financial institutions is not invalidated for past periods. We have also made slight editorial changes to the language in §§ 416.207(a) and (g) for purposes of grammatical consistency.

Regulatory Procedures

Executive Order 12866

The Office of Management and Budget (OMB) has reviewed these final regulations in accordance with Executive Order 12866, as amended by Executive Order 13258.

Regulatory Flexibility Act

We certify that these final regulations will not have a significant economic impact on a substantial number of small entities because they affect only individuals. Therefore, a regulatory flexibility analysis as provided in the Regulatory Flexibility Act, as amended, is not required.

Paperwork Reduction Act

These final rules contain reporting requirements at § 416.207 and § 416.1321. We solicited comments on these requirements on May 2, 2002 in proposed rules published in the Federal Register at 67 FR 22021 and provided a 60-day period for interested parties to comment. Based on comments received, we have made revisions to the proposed rules to address some of the concerns of the commenters (see Public Comments section). However, these revisions did not alter the reporting requirements imposed on the public in the final rule.

The public reporting burden is accounted for in the Information Collection Requests for the various forms that the public uses to submit the information to SSA. Consequently, a 1-hour placeholder burden is being assigned to the specific reporting requirement(s) contained in these rules. The forms used to collect this information will not change as a result of this rule.

An Information Collection Request has been submitted to OMB. We will publish a notice in the Federal Register upon OMB approval of the information collection requirement(s).

(Catalog of Federal Domestic Assistance Program No. 96.006, Supplemental Security Income)

List of Subjects in 20 CFR Part 416

• Administrative practice and procedure
• Aged
• Blind
• Disability benefits
• Public Assistance programs, reporting and recordkeeping requirements
• Supplemental Security Income (SSI)

Dated: July 11, 2003.

Jo Anne B. Barnhart,

Commissioner of Social Security.

For the reasons set out in the preamble, we are amending part 416, subparts B and M of chapter III, title 20, Code of Federal Regulations to read as follows:

PART 416—SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND DISABLED

Subpart B—[Amended]

1. The authority citation for Subpart B of part 416 continues to read as follows:

Authority: Secs.702(a)(5), 1110(b), 1602, 1611, 1614, 1615(c), 1619(a), 1631, and 1634 of the Social Security Act (42 U.S.C. 902(a)(5), 1310(b), 1381a, 1382, 1382c, 1382d(c), 1382h(a), 1383, and 1383c); secs. 211 and 212, Pub. L. 93-66, 87 Stat. 154 and 155 (42 U.S.C. 1382 note); sec. 502(a), Pub. L. 94-241, 90 Stat. 268 (48 U.S.C. 1681 note); sec. 2, Pub. L. 99-643, 100 Stat. 3574 (42 U.S.C. 1382h note).

2. Revise the last sentence of § 416.200 to read as follows:

§ 416.200

Introduction.

* * * You continue to be eligible unless you lose your eligibility because you no longer meet the basic requirements or because of one of the reasons given in §§ 416.207 through 416.216.

3. Add a new § 416.207 under the undesignated center heading REASONS WHY YOU MAY NOT GET SSI BENEFITS FOR WHICH YOU ARE OTHERWISE ELIGIBLE, to read as follows:

§ 416.207

You do not give us permission to contact financial institutions.

(a) To be eligible for SSI payments you must give us permission to contact any financial institution and request any financial records that financial institution may have about you. You must give us this permission when you apply for SSI payments or when we ask for it at a later time. You must also provide us with permission from anyone whose income and resources we consider as being available to you, i.e., deemors (see §§ 416.1160, 416.1202, 416.1203, and 416.1204).

(b) Financial institution means any:

(1) Bank,

(2) Savings bank,

(3) Credit card issuer,

(4) Industrial loan company,

(5) Trust company,

(6) Savings association,

(7) Building and loan,

(8) Homestead association,

(9) Credit union,

(10) Consumer finance institution, or

(11) Any other financial institution as defined in section 1101(1) of the Right to Financial Privacy Act.

(c) Financial record means an original of, a copy of, or information known to have been derived from any record held by the financial institution pertaining to your relationship with the financial institution.

(d) We may ask any financial institution for information on any financial account concerning you. We may also ask for information on any financial accounts for anyone whose income and resources we consider as being available to you (see §§ 416.1160, 416.1202, 416.1203, and 416.1204).

(e) We ask financial institutions for this information when we think that it is necessary to determine your SSI eligibility or payment amount.

(f) Your permission to contact financial institutions, and the permission of anyone whose income and resources we consider as being available to you, i.e., a deemor (see §§ 416.1160, 416.1202, 416.1203, and 416.1204), remains in effect until a terminating event occurs. The following terminating events only apply prospectively and do not invalidate the permission for past periods.

(1) You cancel your permission in writing and provide the writing to us.

(2) The deemor cancels their permission in writing and provides the writing to us.

(3) The basis on which we consider a deemor's income and resources available to you ends, e.g. when spouses separate or divorce or a child attains age 18.

(4) Your application for SSI is denied, and the denial is final. A denial is final when made, unless you appeal the denial timely as described in §§ 416.1400 through 416.1499.

(5) You are no longer eligible for SSI as described in §§ 416.1331 through 416.1335.

(g) If you don't give us permission to contact any financial institution and request any financial records about you when we think it is necessary to determine your SSI eligibility or payment amount, or if you cancel the permission, you cannot be eligible for SSI payments. Also, except as noted in paragraph (h), if anyone whose income and resources we consider as being available to you (see §§ 416.1160, 416.1202, 416.1203, and 416.1204) doesn't give us permission to contact any financial institution and request any financial records about that person when we think it is necessary to determine your eligibility or payment amount, or if that person cancels the permission, you cannot be eligible for SSI payments. This means that if you are applying for SSI payments, you cannot receive them. If you are receiving SSI payments, we will stop your payments.

(h) You may be eligible for SSI payments if there is good cause for your being unable to obtain permission for us to contact any financial institution and request any financial records about someone whose income and resources we consider as being available to you (see §§ 416.1160, 416.1202, 416.1203, and 416.1204).

(1) Good cause exists if permission cannot be obtained from the individual and there is evidence that the individual is harassing you, abusing you, or endangering your life.

(2) Good cause may exist if an individual other than one listed in paragraph (h)(3) of this section refuses to provide permission and: you acted in good faith to obtain permission from the individual but were unable to do so through no fault of your own, or you cooperated with us in our efforts to obtain permission.

(3) Good cause does not apply if the individual is your representative payee and your legal guardian, if you are a minor child and the individual is your representative payee and your custodial parent, or if you are an alien and the individual is your sponsor or the sponsor's living-with spouse.

Subpart M—[Amended]

4. The authority citation for subpart M of part 416 continues to read as follows:

Authority: Secs. 702(a)(5), 1129A, 1611-1615, 1619, and 1631 of the Social Security Act (42 U.S.C. 902(a)(5), 1382-1382d, 1382h, 1383 and 1320a-8a).

5. Redesignate § 416.1321 as § 416.1320 and add new § 416.1321 to read as follows:

§ 416.1321

Suspension for not giving us permission to contact financial institutions.

(a) If you don't give us permission to contact any financial institution and request any financial records about you when we think it is necessary to determine your SSI eligibility or payment amount, or if you cancel the permission, you cannot be eligible for SSI payments (see § 416.207) and we will stop your payments. Also, if anyone whose income and resources we consider as being available to you (see §§ 416.1160, 416.1202, 416.1203 and 416.1204) doesn't give us permission to contact any financial institution and request any financial records about that person when we think it is necessary to determine your SSI eligibility or payment amount, or that person cancels the permission, you cannot be eligible for SSI payments and we will stop your payments. We will not find you ineligible and/or stop your payments if the person whose income and resources we consider as being available to you fails to give or continue permission and good cause, as discussed in § 416.207(h), exists.

(b) We will suspend your payments starting with the month after the month in which we notify you in writing that:

(1) You failed to give us permission to contact any financial institution and request any financial records about you, or

(2) The person(s) whose income and resources we consider as being available to you failed to give us such permission.

(c) If you are otherwise eligible, we will start your benefits in the month following the month in which:

(1) You give us permission to contact any financial institution and request any financial records about you, or

(2) The person(s) whose income and resources we consider as being available to you gives us such permission.

6. Revise references from “§ 416.1321” to read “§ 416.1320” in the following sections:

a. § 416.421(a);

b. § 416.640(e)(5)(iii);

c. § 416.1231(b)(9);

d. § 416.1242(d);

e. § 416.1245(b)(5);

f. § 416.1247(b);

g. § 416.1335;

h. § 416.1337(b)(3)(ii);

i. § 416.1618(d)(3)(i);

j. § 416.1618(d)(3)(ii); and

k. § 416.1618(d)(3)(iv).