WASHINGTON—NAFCU has sent a letter to leaders of the House Ways and Means Committee and Senate Finance Committee highlighting the trade association’s opposition to including new IRS reporting requirements for financial institutions in the Build Back Better Act (BBBA).
NAFCU said some of the potential compromises being floated in order to get the multi-trillion-dollar legislation back on track do not address credit union concerns.
Among those concerns is the proposed reporting requirement that would require financial institutions to submit information to the IRS for all accounts with over $600 in inflow or outflow transactions on an annual basis. Both NAFCU and CUNA have previously opposed this provision as Congress considered the fiscal year 2022 Budget Resolution.
“We strongly urge you to not include any language enacting this provision in the BBBA,” Vice President of Legislative Affairs Brad Thaler wrote. “We believe that requiring credit unions and other financial institutions to report on gross inflows and outflows stands to pose more costs and burdens on community institutions with uncertain returns.”
Missing the ‘Real Problems’
In addition, Thaler said the various compromises that Congress is considering do not address the real problems with the reporting requirements. Among those changes are raising the reporting threshold from the proposed $600 amount to a higher level such as $10,000 or not counting direct deposits of paychecks.
“Because this provision focuses on the new reporting concept of account flows, and not income, most Americans would be caught up in this new scheme even at a higher threshold,” mentioned Thaler. “Furthermore, additional parameters will create additional compliance hurdles for financial institutions to report the correct account information. This provision cannot be fixed and should be rejected.”
Additional Burdens
Thaler’s letter also notes the wide range of reporting responsibilities and regulatory compliance burdens that credit unions already face, and further raises the privacy concerns that come with these requirements for the nation’s 127-million credit union members.
“In the meantime, we urge you to not include this troublesome provision, at any threshold or with any parameters, in the Build Back Better Act and reject its inclusion in any future legislative effort,” concluded Thaler.