This story originally appeared in New York Focus, a nonprofit news publication investigating power in New York. Sign up for their newsletter here.

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NEW YORK STATE · February 13, 2025

Lawmakers Press State on Lagging Efforts to Stanch Food Stamp Theft

The social services commissioner says New York wants to join other states adopting more secure cards, but lacks funds for the upgrade.

By Jie Jenny Zou , New York Focus

In a budget hearing on Wednesday, several Democratic and Republican legislators pressed Governor Kathy Hochul’s administration on its lagging efforts to protect New York’s neediest families from going hungry amid an ongoing rash of thefts.

The Supplemental Nutrition Assistance Program — formerly known as food stamps — has become a target for thieves who place hidden skimming devices at checkouts.

New York has been among the states hardest hit by SNAP theft. To date, the state has reimbursed $40 million in stolen benefits since 2022. Nearly 3 million New Yorkers used SNAP last year, with the average household receiving $376 in monthly benefits.

But congressional approval for refunds dried up in late December, leaving households in a lurch amid rising food insecurity and stubborn inflation. (New Yorkers can still apply for refunds of benefits stolen before Dec. 20, 2024.)

Much of the questioning by lawmakers on Wednesday’s joint
hearing in Albany focused on the state’s ability to adopt encrypted chip
technology — a tech upgrade that experts say could nearly eliminate
skimming.

New Yorkers currently access SNAP using less secure
magnetic-strip benefit cards, while chips have been standard across
credit and debit cards since 2015.

Assemblymember Jessica González-Rojas and Senate Social
Services Committee Chair Roxanne Persaud have proposed legislation
requiring the state to switch to chip-enabled cards since 2023, but the
measures have failed to gain traction.

“Right now, we do not have resources within the agency budget to move towards chip cards.”

—OTDA Commissioner Barbara Guinn

The Office of Temporary and Disability Assistance, which oversees New York’s SNAP program, told reporters
last summer that it was “in the early stages of moving to chip
technology for New York EBT cardholders.” But on Wednesday, the agency’s
commissioner said it doesn’t have the funds.

“We understand the movement to chip cards is the best path
forward,” said Commissioner Barbara Guinn. “Right now, we do not have
resources within the agency budget to move towards chip cards.”

Governor Kathy Hochul’s proposed budget,
which was unveiled last month, does not include funding for chip cards
or state-backed reimbursements for stolen funds — another bill currently
circulating the legislature.

During the hearing, several legislators joined together for
a press conference at the statehouse to signal their support for a
slate of SNAP-related bills. “Over 100,000 New Yorkers have been
impacted by skimming,” said González-Rojas. “This is the program that
allows people to feed their families.”

Guinn said the agency projects it would cost up to $40 million to
switch to chip cards, based on information from transition efforts
underway in California and Oklahoma. Both states plan to roll out new
cards this year after several delays and a slew of technical
difficulties.

Several other states have also announced plans to switch to chip cards amid stalled efforts in Congress proposing a nationwide transition.

In an email, an OTDA spokesperson clarified the $40 million figure represents a total shared cost. Under current rules, states evenly split the cost of administering SNAP with the US Department of Agriculture, which could drive down New York’s responsibility to $20 million.

“This is the program that allows people to feed their families.”

—Assemblymember Jessica González-Rojas

Up until Wednesday’s hearing, OTDA has been tight-lipped about chip cards. Last week, an agency spokesperson declined to answer questions from New York Focus about a possible transition, instead pointing SNAP recipients to utilize an app that locks cards when not in use.

Guinn dodged questions from Senator Dean Murray about exactly how many New Yorkers are utilizing the lock feature, but admitted usage is “not nearly where it needs to be” and is “far underutilized.” The state is set to roll out a text message campaign this week to 1.4 million SNAP recipients in the hopes of raising awareness of the feature, which has been available since February 2024. It will also add info about the lock feature to mailed SNAP notices.

California introduced the same lock feature in November 2023 and has also worked closely with the USDA on the arduous process of switching over to chip cards. Like New York, the Golden State has been a
hotbed for SNAP theft.

California officials have budgeted $76.5 million in federal and state funds for the transition and plans to roll out the new cards to 3.2 million residents by the end of the month, according to Theresa Mier, spokesperson for California’s Department of Social Services. The state has repeatedly pushed back the launch, which was originally set for last summer.

In an email, Mier attributed the delays to “significant” back-end changes to the transaction system used by benefit cards. Mier noted this system is separate from the one utilized by commercial credit and debit cards and was only designed to handle magnetic-strip transactions. Retailers must also update their point-of-sale terminals to ensure SNAP transactions don’t fail and block recipients from utilizing their benefits.

Both California and New York currently use the same
contractor, Fidelity Information Services, for their benefit cards. Only two companies — FIS and Conduent — currently contract with states for benefit card systems across the country. New York also leads a consortium of seven Northeast states that have banded together since 1995 to negotiate contracts for benefit cards.

Mier noted her department has “provided insight to New
York” on the transition and recommends OTDA reach out to USDA “early in the process for support and guidance.”

Timing is key. As states like California move to more
secure cards, experts worry that laggards like New York could become an even bigger target for skimming.

An OTDA spokesperson declined to comment on how much the agency has consulted with states like California, but said the state took part in roundtable discussions with USDA last year about switching to chip-enabled cards.

Update: This story has been updated to reflect comments from OTDA received after publication.