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This week, CUNA and the World Council of Credit Unions (WOCCU) wrote a joint letter to Congressman Mark Meadows (R-NC), Chairman of the House Oversight and Government Reform Subcommittee on Government Operations, and Senator Rand Paul, in support of their legislation (S. 869 and H.R. 2054) to repeal the Foreign Account Tax Compliance Act (FATCA). The House Oversight and Government Reform Subcommittee on Government Operations will hold a hearing tomorrow entitled, "Reviewing the Unintended Consequences of the Foreign Account Tax Compliance Act." This joint CUNA/WOCCU letter will be included in the official hearing record. Senator Rand Paul is scheduled to testify at the hearing.
This legislation will repeal the obtrusive and burdensome requirements on financial institutions that are a result of the Foreign Account Tax Compliance Act. FATCA was enacted into law in 2010 and placed new and significant compliance costs on U.S. credit unions, especially those that engage in remittances and/or have members who are not U.S. citizens. Under FATCA, U.S. credit unions are classified as “withholding agents” and are required to perform due diligence and withhold a 30% tax on some cross-border payments.
This important legislation will repeal FATCA and put a stop to the law’s increasing regulatory burdens on U.S. credit unions and banks, and help American expatriates maintain access to financial services. FATCA has also caused a significant number of Americans living overseas to renounce their US citizenship in order to maintain access to financial services. The additional due diligence and tax withholding requirements from FATCA necessitate additional credit union and bank staff resources.
Many Americans living and working abroad have had their bank accounts closed, as well as loans and mortgages recalled and denied. Many financial institutions simply cannot justify serving these members and customers when the FATCA compliances costs are so high. Financial institutions that fail to comply, either knowingly or not, face heavy fines and a ban on operating within the US banking system.
CUNA will continue to advocate for swift passage of this legislation, either as freestanding legislation, or in the context of the overall comprehensive tax reform effort underway in the Congress.
Full Letters Available - Congressman Mark Meadows & Senator Rand Paul
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Credit Union National Association is the most influential financial services trade association and the only national association that advocates on behalf of all of America's credit unions. We work tirelessly to protect your best interests in Washington and all 50 states. We fuel your professional growth at every level and champion the credit union story at every turn.
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