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last several weeks, CUNA and credit unions have found ourselves swept into the
discussion of major legislation going through Congress. Recall that in late May and early June, we successfully
removed a provision in trade promotion authority bill that would have required
addition reporting on savings and checking accountings accruing less than $10
in interest per year. This week, our
concern is a provision in the Highway Transportation Funding bill that would
require additional reporting of mortgage related information to the IRS.
law requires lenders to provide the IRS with each borrower’s name, address and
taxpayer identification number, as well as the amount interest paid in the
year. The provision in the House Highway
bill would require lenders to include the origination date, the amount of
outstanding principal and the property’s address. Supporters of this requirement say that this
will help reduce inaccurate reporting, and raise an estimated $1.806
billion. And there it is, the reason
this provision has been included in the bill:
Congress needs it to pay part of the Highway bill.
about everyone agrees that it is good public policy for Congress to pay for the
bills they enact into law, but trend of trying to increasing regulatory burden on credit
unions and small banks to help pay for these bills is disturbing. As noted, this is the second time in a month
that we have seen this type of maneuver attempted; and we regularly see
attempts to raise government guarantee fees as a means for raising
to the concern, the methodology for determining the revenue generation is
opaque. The Joint Committee on Taxation
generates estimates like this for various provisions and legislation; however,
it is often very unclear as to how they have arrived at their conclusion. There is no requirement that they show their
work, so it’s not always clear how a burden like what has been proposed for
credit unions and small banks results in the amount of estimated revenue.
the process by which this provision was included is concerning. While it is true that a similar – and frankly
more burdensome – provision was floated as part of legislation offered last
year, the inclusion of this provision in the Highway bill was not widely
publicized until it was too late to remove it in the House.
we became aware of the provision, we immediately reached out to our contacts on
the Hill and in industry. We sent an
to the leaders of the House Ways and Means Committee and we joined our banking
industry partners the next day on a letter to the Senators working on that chamber’s
highway bill. We will continue to work
on this issue as the Highway bill moves to the Senate.
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