Current Action: Tell congress to oppose new IRS reporting provisions
CUNA is closely monitoring a tax portion of the Majority’s proposed $3.5 trillion “Build Back Better Act” reconciliation package. One measure for this legislation that has been discussed is a proposal by the Treasury Department to require financial institutions to report additional account holder information in an enhanced annual I.R.S. Form 1099-INT. The House Ways and Means Committee completed its markup of draft infrastructure legislation without the troublesome IRS reporting provision. It could still be added by the Rules Committee before it hits the floor, and there are several steps left before this bill becomes law.
If considered, this proposal would require credit unions and banks to report the inflows and outflows of funds to accounts that hold more than $600. Whereas the Form 1099-INT form reports taxable activity, this new reporting requirement would not reflect any taxable activity. Instead, what the administration hopes the IRS would be able to do is to use this enormous data grab to identify unreported taxable income. But it’s not clear how the IRS will use this data to accomplish its goal. Further, the federal government’s history of keeping this type of data secure is dubious at best.
What is certain is that if it is enacted, this proposal will increase the already high compliance burden on all financial institutions. It will also fundamentally change the nature of the information depository institutions are required to report on their account holders, creating new concerns regarding data security and privacy.
CUNA and the Leagues have issued an action alert calling on credit union leaders to oppose new reporting provisions that would require financial institutions to report additional detailed account holder information. All consumers are encouraged to take action and contact your members of Congress today, in opposition to this potential IRS reporting provision. Use this ready-to-send form!
Annual Advocacy Priorities
The ongoing foundation for CUNA's credit union advocacy efforts focuses on the areas below, which represent the input and guidance shared from credit unions across the country.
Consumer Protection - Credit unions are the original consumer protectors in the financial services sector; commonsense consumer protection regulation recognizes that our structure and mission makes us different.
Examination & Supervision - Credit unions support a regulatory scheme that minimizes the adverse business impact of regulations on credit union operations while ensuring that credit unions operate safely and soundly while providing cooperative financial products and services.
Charter Enhancement - Improving both the Federal Credit Union Act and state credit charters is at the top of the agendas of CUNA and the state credit union leagues. We are seeking to reduce the regulatory burdens of credit unions and empower credit unions with increased authorities and greater flexibility to serve their members.
Tax Issues - Credit unions are democratically owned and controlled not-for-profit cooperative financial institutions that take pride in their “People Helping People” philosophy. Credit unions are exempt from federal income tax because of their structure as not-for-profit financial cooperatives and their mission to promote thrift and provide access to credit for provident purposes.
Mortgage Lending & Housing - Credit union mortgage lending is a vital path to homeownership for millions of American families, and credit unions need commonsense regulation of consumer-friendly credit union mortgage products and fair and equitable access to a robust secondary market to fulfill their role in our nation's housing market.
Regulatory Relief - For many Americans, credit unions are their opportunity for affordable financial services, but regulatory burden continues to provide challenges to credit unions and their members. Unfortunately, credit union members end up paying the price for regulatory burden.