HOUSE RESOLUTION NO.127
Rep. Schmaltz offered the following resolution:
1 A resolution to urge Congress to pass legislation and urge the
2 United States Department of Agriculture to promulgate rules and
3 implement more thorough security measures that would reduce the
4 amount of fraud in the Supplemental Nutrition Assistance Program.
5 Whereas, The Supplemental Nutrition Assistance Program,
6 commonly referred to as SNAP, provides resources for low-income
7 individuals and their families who would otherwise be unable to
8 afford enough food to feed themselves; and
9 Whereas, Those who desperately rely on SNAP benefits have had
10 their benefits stolen. Millions of dollars have been stolen from
11 the program by both domestic and transnational organized criminal
12 groups. In May 2023, Michigan Attorney General Dana Nessel
13 announced charges for a group accused of making at least four
LSB Research Services Division
KH R0073’23
 2
1 million dollars in fraudulent purchases by stealing benefits from
2 over eight thousand electronic benefit transfer (EBT) cardholders;
3 and
4 Whereas, The United States Department of Agriculture (USDA)
5 has antiquated technology and limited program oversight. The USDA
6 only spends one twentieth of one percent of their budget on anti-
7 fraud efforts. Instead of updating their technology to protect SNAP
8 beneficiaries, the USDA simply puts up warnings and advises
9 beneficiaries to try not to have their EBT cards, which still use
10 the old technology of magnetic stripes, skimmed by scammers; and
11 Whereas, SNAP beneficiaries carry the burden of SNAP fraud,
12 often going weeks without the benefits stolen from them. Victims of
13 fraud are encouraged to report fraud to police departments and
14 government departments. By failing to update their technology, the
15 USDA creates more work for the victims and individuals in law
16 enforcement who must spend time and resources investigating
17 criminals associated with food benefits fraud; and
18 Whereas, Given the recent cases regarding SNAP fraud, it is
19 estimated the program’s fraud rate is over twenty percent. The USDA
20 claims to have a retailer trafficking fraud rate of less than two
21 percent, but they admit that they lack the adequate tools to
22 accurately determine the rate. It is also highly unlikely the
23 USDA’s fraud rate is lower than the average annual fraud rate of
24 big banks and credit card companies that have much better
25 technology to prevent fraud than the USDA; and
26 Whereas, To better protect against the theft of SNAP benefits,
27 the USDA should implement new technology by switching EBT cards
28 from magnetic stripe cards to chip enabled cards and requiring
29 additional identity verification. The USDA should also restrict the
LSB Research Services Division
KH R0073’23
 3
1 area in which cardholders can use their cards and require
2 cardholders to notify the department when they plan to use the
3 cards outside of the restricted area. This would better protect
4 against scammers in other states from being able to make fraudulent
5 transactions; now, therefore, be it
6 Resolved by the House of Representatives, That we urge
7 Congress to pass legislation and urge the United States Department
8 of Agriculture to promulgate rules and implement more thorough
9 security measures that would reduce the amount of fraud in the
10 Supplemental Nutrition Assistance Program; and be it further
11 Resolved, That copies of this resolution be transmitted to the
12 Speaker of the United States House of Representatives, the
13 President of the United States Senate, Governor Whitmer, the
14 Michigan Department of Health and Human Services, and the members
15 of the Michigan congressional delegation.
LSB Research Services Division
KH R0073’23