FMI, NGA back bill to bar imposition of EBT fees in SNAP

FMI-The Food Industry Association (FMI) and the National Grocers Association (NGA) have endorsed new federal legislation to clamp down on electronic benefits transfer (EBT) processing fees in the Supplemental Nutrition Assistance Program (SNAP).

Introduced by Rep. Shontel Brown (D., Ohio), the Ensuring Fee-Free Benefit Transactions Act (EBT Act, H.R. 4103) would prohibit transaction and related fees from being levied on retailers and consumers participating in SNAP. The bill also would hold retailers only to their own costs as the federal government modernizes the EBT system with chip cards, mobile payments and other payment upgrades.

Specifically, the EBT Act would make permanent a 2018 Farm Bill temporary protection from new transaction fees. Expiration of that provision, set to occur this year, potentially would hike costs or lead to a two-tiered payment system that would discourage retailers from participating in SNAP and burden consumers, according to Brown.

“In communities like Cleveland, many SNAP recipients rely on local, independent and small grocery retailers to purchase fresh, affordable foods for their families. In [congressional district] OH-11, where nearly one in four households receive SNAP benefits, we need to ensure that these retailers continue to participate in this vital program,” Brown explained. “The EBT Act will permanently close a loophole that subjects retailers to processing fees on SNAP transactions. These extra costs to businesses could force many small, minority or family-owned independent retailers to stop accepting SNAP or raise their prices, both of which would be extremely harmful to my constituents in Northeast Ohio and people across the country.”

The EBT Act was introduced in the House of Representatives on Wednesday and has been referred to the House Committee on Agriculture, in which Brown serves as a ranking member. H.R. 4103 is co-sponsored by Reps. Earl Blumenauer (D., Oregon) and Sara Jacobs (D., California).

U.S. Rep. Shontel Brown (D., Ohio) / Photo courtesy of U.S. Congress

“FMI greatly appreciates Congresswoman Brown’s leadership in introducing the EBT Act to protect SNAP participants’ access to grocery retailers around the country. The imposition of processing or other related fees and costs outside of our control would be an unfair burden on retailers and customers. Such fees would likely result in higher costs on consumers or some stores feeling that they are unable to participate in the program, hurting SNAP participants and their communities,” Jennifer Hatcher, chief public policy officer and senior vice president of government and public affairs at FMI, said in a statement on Thursday.

FMI sent a letter to Brown on Thursday to voice its support for the EBT Act. “Retailers continue to invest significant resources to participate in SNAP, including bearing the
cost of equipment updates, software and training for store associates,” the letter noted.
 
“As private-sector partners with the federal government serving as points of redemption for SNAP participants, FMI and its grocery members are committed to strengthening the integrity and viability of SNAP for millions of Americans in every community,” Hatcher added. “The EBT Act ensures that processing or other related fees outside of our control, which have never been imposed on retailers or consumers, will be permanently prohibited in the program and costs associated with a migration to EBT chip cards will also not be imposed on grocers.”

NGA emphasized that EBT transaction fees would be cost-prohibitive for many community and family-owned grocers in urban, rural and high-need areas. Likewise, the association noted that all stakeholders—federal and state government, EBT processors and retailers—must pay their share of EBT modernization costs and not pass them down to SNAP retailers.

A provision in the 2018 Farm Bill that's set to expire this year provides only temporary protection from new transaction fees for EBT. / Photo: Shutterstock

“Independent community grocers are essential partners in SNAP, providing access to nutritious and affordable foods for American families in need. Retailers invest significant capital for the software, equipment and training to provide SNAP benefits for their communities,” NGA President and CEO Greg Ferrara stated. “NGA was pleased to work with Congresswoman Brown on finding a permanent solution to prevent processing fees on SNAP transactions, which could result in limited access to SNAP for beneficiaries and negatively impact the retailers who are indispensable to the program.”

According to Aaron Saltzman, vice president at Dave’s Markets, a 12-store operator in the greater Cleveland-area, the EBT Act would bar processing fees plus ensure that retailers are responsible only for their own expenses as the U.S. Department of Agriculture—which manages SNAP—works to upgrade the EBT system.

“We operate stores in many diverse areas that are often deemed as food deserts, and we strive to tailor each store to meeting the needs of the various communities. We take on large expenses in order to meet the needs of our shoppers, whether they are a SNAP participant or otherwise,” Saltzman explained. “Placing additional costs by way of processing fees in the SNAP program onto the retailer would harm our ability to best serve our local communities.”

More than 42.4 million Americans now rely on SNAP, according to the latest available data from the USDA’s Food and Nutrition Service (FNS), operator of the program. Through the end of March, that number includes nearly 22.5 million participating households, receiving an average monthly benefit of $386.17.