I just got off the phone with Bill in the compliance department at Upromise Investments. Upromise Investments, as you have no reason to know, is an investment management and record-keeping firm that's used by various states to either manage 529 College Savings Plans directly, or provide record-keeping and payment processing services to investment management firms (did I get that more or less right, Bill?).
We had a long, interesting conversation, the highlights of which I'll try to capture.
Upromise Investments is aggressively engaged with Evolve Money and Evolve's payments processor
I didn't really understand this part of the conversation, but I think Bill and his colleagues decided that the easiest way to shut down so-called "inappropriate use" of 529 plans would be to cut off contributions to them. Consequently, I believe they are seeking to remove the 529 plans they are connected with from Evolve Money's list of payees, or attempting to stop Evolve's payments processor from handling those transactions (which would have the same effect).
Upromise Investments is handling this relatively calmly - so far
If you've opened a 529 plan in the last few days in a state where you're not a resident and where Upromise Investments manages the account, and if you've made a contribution through Evolve Money, Upromise Investments knows about you. If you're using the 529 plan to save for you or your relative's education, you still have nothing to worry about; that's what the plans are for (although see above: you may no longer be able to contribute through Evolve Money).
However, if you are planning on immediately making a non-qualified withdrawal, expect a call from Bill, who may very politely tell you he's closing your account and sending you your account balance.
Bill made very clear that this was a temporary courtesy he was extending to us, and that if undesirable behavior continued he would make the process much more unpleasant for future users.
Upromise Investments manages a lot of 529 plans
I've updated the 529 Reference Project with all the information Bill provided me on plans that Upromise Investments manages. I had already put some of this information on the Master List, which I had pulled from this 2011 map Upromise Investments has on their college savings website, 529.com.
Consider your own state's plan first
Bill helpfully suggested that most people would be best served by signing up for their own state's plan, in order to capture any relevant tax benefits their state offers.
The College Savings Plan Network has been informed
Upromise Investments participates in an umbrella organization called the College Savings Plan Network. Bill has made his contacts there aware of the situation. The "communications," he said, "are well underway."
Final Thoughts From Bill
Before I got off the phone with Bill, I asked him if he had any final thoughts he'd like to share with my readers. Here's what he said:
"Not in the 529 plans, please! We have state mandates to make sure they’re used appropriately which we vigorously enforce to the best of our abilities."
And now you know everything I know.