EBT processor sues U.S. over rules favoring banks. (electronic benefits transfer systems, Transactive Corp.)

As if electronic benefits transfer systems haven't encountered enough obstacles, a transaction processing company has thrown a lawsuit in their path.

Transactive Corp., which is under contract to operate the EBT system in Texas, has sued the U.S. Treasury Department over what it alleges is an unfair procedure for seeking bids nationwide.

A temporary restraining order has put the attempt at federal coordination on hold, but most EBT supporters do not view it as fatal to their cause. "For nationwide rollout of EBT, (the suit) probably won't make a difference," said Kurt Helwig, director of government relations for the Electronic Funds Transfer Association, Herndon, Va.

"Reg E is the biggie," Mr. Helwig said, referring to the debit card rules that many state officials have cited as a deterrent to using plastic cards and electronic …