SNAP Payment Security and Fraud Prevention Act of 2026
- Sponsor
- Rep. Malliotakis, Nicole [R-NY-11]
- Committees
- Agriculture Committee (primary)
- Last action
- Mar 20, 2026
Bottom line
The bill aims to modernize SNAP payment security, combat fraud, and protect beneficiaries by requiring advanced technology and expanded enforcement, while also imposing new mandates on states and retailers.
What it actually does
This bill amends the Food and Nutrition Act of 2008 to significantly enhance the security and fraud prevention measures for the Supplemental Nutrition Assistance Program (SNAP) EBT cards. It expands the investigative authority of the USDA Inspector General, establishes a civil penalty for SNAP benefit theft, mandates the adoption of chip-enabled EBT cards and payment terminals, and requires states to implement new cybersecurity regulations and user interface standards for EBT accounts.
Proponents argue
Supporters argue that this bill is crucial for protecting vulnerable SNAP recipients from sophisticated fraud schemes like skimming and cloning, which lead to significant losses for beneficiaries and taxpayers. They contend that modernizing EBT technology to align with private sector payment security standards is long overdue and will restore confidence in the program's integrity. Furthermore, expanding the Inspector General's authority will enhance the ability to proactively detect and prosecute fraud.
Opponents contend
Critics may argue that the bill imposes substantial unfunded mandates on states, requiring costly upgrades to EBT systems and reissuance of cards, which could strain state budgets. Retailers might also face significant costs to upgrade payment terminals, potentially creating barriers for smaller businesses to participate in SNAP. Concerns could also be raised about potential impacts on beneficiary access, particularly for those with limited digital literacy, despite provisions for non-digital interfaces.
The bill is moderately complex due to its technical details regarding cybersecurity and payment systems, requiring a careful read to understand the full scope of its mandates and implications.
Section 2
Expanded Investigative Authority of the Department of Agriculture Inspector General
This section grants the Inspector General (IG) of the Department of Agriculture broad authority to investigate and coordinate multi-jurisdictional efforts against SNAP benefit theft and fraud. This includes investigating cyber-enabled theft (like skimming and phishing), issuing subpoenas and warrants, and coordinating with federal, state, and local law enforcement, as well as financial institutions. The Secretary of Agriculture is authorized to issue rules and allocate funds to support these IG activities.
Supporters argue
Proponents argue that expanding the OIG's authority is essential to combat the evolving nature of cyber-enabled SNAP fraud, ensuring that law enforcement has the necessary tools and coordination capabilities to protect program integrity and beneficiaries.
Critics contend
No specific opposition is typically raised against enhancing fraud prevention and investigative authority, though some might express concerns about potential overreach or resource allocation if not properly managed.
Tradeoffs
The provision balances the need for robust fraud prevention with ensuring appropriate oversight and resource allocation for the expanded investigative powers.
Section 3
Civil Penalty for Theft of SNAP Benefits
This section establishes a new civil penalty for individuals who knowingly access, use, or transfer SNAP benefits without authorization. The penalty is set at twice the value of the benefits lost due to such conduct. The Secretary can assess and enforce this penalty administratively or through civil action. Funds recovered from these penalties will be used to reimburse households for stolen benefits and to support the Inspector General's enhanced investigatory authority. This civil penalty is in addition to any other civil or criminal penalties.
Section 4(B)(ii)(I)
State-Operated User Interfaces for EBT Account Management
This provision mandates that each state operate one or more user interfaces for households to manage their EBT accounts, including a web-based online portal and a mobile application. These interfaces must be mobile-friendly, available at least 99% of the time, and provide information in all required languages. Critically, the Secretary must maintain a list of required user interfaces, which must include an application programming interface (API) to allow households to delegate access to third-party software without fees. For a 10-year period, states must also offer text message, voice telephone service, and a non-digital user interface.
Section 4(B)(ii)(II)
Enhanced Transaction Monitoring and Fraud Reporting
This provision requires states to provide SNAP households with opt-in electronic notices of transactions through digital user interfaces and access to 12 months of historical transaction data through all user interfaces. Transaction information must include the amount, merchant, location (for in-person), and delivery/collection address (for online). States must also offer the ability to report fraudulent transactions through each user interface. Households reimbursed for fraud must be notified of options to restrict card use and remaining reimbursement funds.
Section 4(B)(ii)(III), (VI), (VII), (VIII)
Mandatory Transition to Chip-Enabled EBT Cards and Retailer Terminals
This core provision mandates a phased transition to chip-enabled EBT cards and payment terminals. States must begin issuing chip-enabled EBT cards within 2 years of the regulations becoming final, cease issuing new magnetic stripe cards within 4 years, and reissue all existing valid magnetic stripe EBT cards as chip-enabled cards without magnetic stripes within 5 years. Additionally, states must provide beneficiaries with options for virtual card numbers for online transactions, and the ability to freeze/unfreeze card-not-present transactions. Retail food stores and wholesale food concerns will be required to have chip-enabled payment terminals as a condition of SNAP participation.
Section 5
Ensuring No Loss of Access to Benefits Due to EBT Card Damage, Loss, or Fraud
This section requires the Secretary to promulgate regulations ensuring that if an EBT card is damaged, no longer functions, is stolen, or is frozen due to fraud, the state must provide a replacement card within 3 business days of the household's request. Households can choose to receive the card by mail or in person. States are prohibited from requiring in-person collection of new or replacement EBT cards.
Section 6
No Replacement Fees for Certain EBT Cards
This section amends existing law to prohibit state agencies from collecting replacement fees for EBT cards under specific circumstances. These exceptions include when a card malfunctions, when there is suspected or reported fraud by an individual outside the household, when the card expires, or when replacement is required to comply with the new cybersecurity regulations (e.g., transitioning to chip-enabled cards).
Requires the Secretary to include an application programming interface (API) on the list of required user interfaces, through which states must allow households to delegate access to some or all account features to third-party provided software, with no fee charged for its use.
Section 4(B)(ii)(I)(dd)(BB)
Why it matters:This is likely standard legislative practice for technical specifications, but its implications for fostering innovation in financial technology for SNAP beneficiaries are significant and could be easily overlooked by a casual reader.
Case for: Proponents would argue that mandating an open API fosters innovation, allowing private sector developers to create more user-friendly and feature-rich applications for EBT management, potentially improving financial literacy and access to benefits for recipients.
Case against: Critics might raise concerns about the security implications of third-party access to EBT accounts, the potential for data privacy issues, and the technical complexity and cost for states to develop and maintain a secure, robust API that integrates with various third-party applications.
Estimated impact: Could significantly expand the ecosystem of tools available for SNAP beneficiaries to manage their accounts, potentially leading to greater engagement and fraud detection.
Includes sunset clauses for certain EBT card control features and the general requirement for chip technology. Specifically, the requirements for virtual card numbers and freezing card-not-present transactions (subclause (III)(aa) and (bb)) terminate 5 years after their regulations become final, unless extended. Similarly, the general requirement for all EBT cards issued during a 5-year period following the magnetic stripe reissue deadline to be chip-enabled also sunsets, unless extended.
Section 4(B)(ii)(IV) and (iii)
Why it matters:These sunset clauses are likely included to allow for future flexibility and adaptation to evolving technology, preventing the regulations from becoming outdated. However, their presence means that some of the bill's key security features are not permanent without further legislative or administrative action.
Case for: Proponents would argue that sunset clauses provide necessary flexibility, allowing the Secretary to review and update requirements based on technological advancements and changing fraud landscapes, preventing the program from being locked into outdated solutions.
Case against: Critics might argue that sunsetting key security features creates uncertainty and could lead to a lapse in protections if extensions are not timely granted or if future administrations choose not to renew them, potentially undermining the long-term security goals of the bill.
Estimated impact: Introduces a degree of impermanence to some of the bill's core security mandates, requiring future review and potential reauthorization to maintain these protections.