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State Department of Revenue Issues Tax Refund VISA Debit Card

February 6, 2013 -- The Community Bankers Association of Illinois is aware that the Illinois Department of Revenue (“Revenue”) has circulated a one page information sheet (“notification”), informing financial institutions that Revenue has issued VISA prepaid debit cards for State tax refund payments in lieu of drawing paper checks for tax refunds. The Revenue notification states that tax refund cardholders can receive cash draws from any bank, regardless of whether the cardholder has an account relationship with that bank. The notification also states that the cash draw shall be provided “without surcharge or other cardholder fees” and the notification is titled “NO FEE MANUAL CASH DISBURSEMENTS.”

Unlike the Illinois Department of Public Aid’s cooperative efforts several years ago to work with Illinois financial institution trade associations before finalizing Public Aid’s data match program pertaining to accountholders with delinquent child support obligations, Revenue adopted the VISA tax refund debit card program and circulated the notification to financial institutions without prior discussion with CBAI or other financial institution trade associations.

CBAI will pursue discussions with Revenue in an effort to reach an understanding that will minimize the financial and operational burdens that Revenue’s notification might present to CBAI Members and CBAI will apprise our membership of all relevant information that we gather related to this issue.

In the interim, if you have concerns, questions or comments regarding the impact of Revenue’s notification on your bank, please contact CBAI General Counsel Jerry Cavanaugh by e-mail at jerryc@cbai.com.