WASHINGTON–President Biden’s recently submitted $6 trillion federal budget includes, not surprisingly, numerous proposals that have credit union support, opposition and concern.
The budget, of course, must still work its way through Congress where a number of changes can take place.
Of interest to CUs, the budget includes an increase in funding for the Small Business Administration (SBA) and Community Development Financial Institution (CDFI) Fund compared to the 2021 enacted levels.
The proposal provides $330 million to the Treasury's CDFI Fund, an increase of 22.2% from the 2021 enacted level (excluding coronavirus-related emergency funding).
During the Trump Administration, cuts were proposed each year for the CDFI fund before being restored by Congress following lobbying by credit unions and other organizations.
Also Noteworthy
Also worthy of note in the new budget:
- The budget includes new reporting requirements in which financial institutions would be required to file an annual information return for all business and personal accounts with more than $600 in their account. The annual reporting requirement would include information related to gross inflows and outflows, including the amount of cash, transfers to and from accounts held by the same owner, and transactions with foreign accounts. NAFCU noted it had previously joined with other groups in raising concerns about the proposed tax reporting requirement, saying it “would impose cost and complexity that are not justified by the potential, and highly uncertain, benefits. “Furthermore, we believe additional reporting requirements guided by subjective criteria have privacy and fairness implications and the potential to put financial institutions in an untenable position with their account holders,” the letter states.
- The budget includes a number of provisions designed to expand housing opportunities and reduce the racial wealth gap, including support for access to homeownership for underserved borrowers through the Federal Housing Administration's (FHA) mortgage insurance programs, as well as supporting coronavirus-related relief provided to homeowners facing financial hardships. There is also $800 million budgeted for new investments across Department of Housing and Urban Development programs for rehabilitation and modernization to further climate resilience and energy efficiency – aimed at addressing climate change impacts.