HR-7658-119
Referred to the Subcommittee on Nutrition and Foreign Agriculture.
Sponsored by Daniel Goldman (D-NY)
What it does
This bill would require the USDA to issue regulations requiring states to upgrade SNAP EBT cards to chip-enabled technology, phase out magnetic stripe cards, and offer secure digital and non-digital account management interfaces (web, mobile app, text, phone, in-person). It would also require prompt card replacement, ban replacement fees for fraud or malfunction, require retailers to have chip-enabled payment terminals, and mandate USDA reporting on benefit theft and Puerto Rico-specific card security.
Who benefits
SNAP recipients (roughly 40+ million people) who would gain more secure cards, fraud protections, free replacements, and better account access; households victimized by EBT skimming/fraud; card vendors and payment terminal manufacturers who would receive new business; retailers eventually required to upgrade terminals (with the burden offset somewhat by grant funding for small/rural stores); state agencies receiving federal reimbursement for upgrade costs.
Who is hurt
State SNAP agencies bearing implementation and administrative burdens during the transition, even with reimbursement; small retailers and grocers, especially in underserved areas, who must acquire chip-enabled terminals as a condition of SNAP authorization (though some may qualify for grants); the federal government and taxpayers who would bear reimbursement and grant costs; possibly SNAP recipients temporarily during the multi-year card transition if implementation is uneven across states.
Supporters argue
Supporters argue that EBT cards' outdated magnetic stripe technology makes them uniquely vulnerable to skimming and cloning fraud, which has surged in recent years and disproportionately harms low-income households who can least afford stolen benefits. They contend the bill modernizes SNAP to match private-sector card security standards already used for credit and debit cards, while including reimbursement funding and grants so states and small retailers are not left to bear upgrade costs alone.
Opponents argue
Opponents argue that the multi-year, multi-layered mandates—covering card technology, retailer terminals, digital interfaces in multiple languages, uptime requirements, and recurring federal reporting—impose significant administrative and compliance burdens on state agencies and small retailers that may exceed the promised reimbursements and grants. They contend that requiring retailers to install chip-enabled terminals as a condition of SNAP authorization could push some small or rural grocers, who operate on thin margins, out of the program, potentially reducing food access in underserved areas.
Constitutional context
Congress's authority to condition SNAP retailer participation on equipment standards and to regulate the SNAP payment system rests on its spending power and Commerce Clause authority over a nationwide benefits program; there is no active constitutional dispute presented by this bill, though the broad rulemaking delegated to USDA could face post-Loper Bright scrutiny if agency interpretations of terms like "reasonable costs" or "chip-enabled" are later challenged.
Checks and balances
Congress directs USDA (executive branch) to promulgate detailed regulations and reimbursement formulas, with reporting requirements to congressional committees serving as an oversight check, and courts available post-Loper Bright to review whether USDA's implementing regulations align with the statute.
Historical precedent
The 2023 Consolidated Appropriations Act (division HH) previously directed USDA to develop EBT cybersecurity regulations, which this bill would largely supersede and expand upon.