WASHINGTON–A proposal that would have required credit unions to report member deposit inflows/outflows to the IRS has been dropped from the latest reconciliation bill currently before Congress.
The removal of the language does not mean it could not be inserted later as the legislation works its way through Congress.
The proposal, aimed at increasing tax revenue, had been much opposed by the credit union trade groups and numerous other constituencies, as well as Republican members of Congress and, most recently, 21 Democratic members, as well. The proposal had initially called for financial institutions to report all inflows/outflows of $600 or more to the IRS. After strong pushback, that threshold was subsequently raised to $10,000, but the objections remained.
The White House has confirmed the language is not included in the approximately $1.75 trillion over which Democrats and the Biden Administration are now trying to come to agreement.
“We’re extremely pleased to see the White House has heard the hundreds of thousands of credit union advocates who expressed strong opposition to this anti-consumer proposal,” said CUNA President/CEO Jim Nussle in a statement. “There is still a chance it could be inserted into the legislation as it moves forward, but at the moment we’re confident that bold, fierce 360-degree advocacy from CUNA, Leagues, credit unions, and their members has kept this proposal out of the initial framework.”
NAFCU Response
“NAFCU commends the White House and Congressional leaders from backing away from the invasive IRS reporting requirement proposal in the initial reconciliation framework released today," said NAFCU President and CEO Dan Berger. "This is an important step in ensuring law-abiding Americans maintain their financial privacy. NAFCU has fought against this bad idea since it was first proposed, and we applaud all the credit unions and lawmakers who have joined us in fighting strongly against this new reporting regime. It is important that this provision be dropped outright from the final legislation. We remain vigilant in our opposition until the reconciliation process is complete.”