PROVISIONS TO ENCOURAGE ELECTRONIC BENEFIT TRANSFER SYSTEMS.

SEC. 907. PROVISIONS TO ENCOURAGE ELECTRONIC BENEFIT TRANSFER SYSTEMS. Section 904 of the Electronic Fund Transfer Act (15 U.S.C. 1693b) is amended— (1) by striking “(d) In the event” and inserting ``(d) Applicability to Service Providers Other Than Certain Financial Institutions.— “(1) In general.—In the event” ; and (2) by adding at the end the following new paragraph: “(2) State and local government electronic benefit transfer programs.— “(A) Exemption generally.—The disclosures, protections, responsibilities, and remedies established under this title, and any regulation prescribed or order issued by the Board in accordance with this title, shall not apply to any electronic benefit transfer program established under State or local law or administered by a State or local government. “(B) Exception for direct deposit into recipient's account.—Subparagraph (A) shall not apply with respect to any electronic funds transfer under an electronic benefit transfer program for deposits directly into a consumer account held by the recipient of the benefit. “(C) Rule of construction.—No provision of this paragraph may be construed as— “(i) affecting or altering the protections otherwise applicable with respect to benefits established by Federal, State, or local law; or “(ii) otherwise superseding the application of any State or local law. “(D) Electronic benefit transfer program defined.—For purposes of this paragraph, the term ‘electronic benefit transfer program’— “(i) means a program under which a government agency distributes needs-tested benefits by establishing accounts to be accessed by recipients electronically, such as through automated teller machines, or point-of-sale terminals; and “(ii) does not include employment-related payments, including salaries and pension, retirement, or unemployment benefits established by Federal, State, or local governments.” .