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The House Ways and Means Committee got to work on Thursday with members marking up the $3.5 trillion spending package during its budget reconciliation process. Inside the massive package was one issue CUNA and NAFCU officials appear to be extremely concerned about – new IRS reporting requirements for credit unions.
For the third time in three months, the two trade organizations sounded the alarm on a potentially problematic proposal by the Treasury Department that would require financial institutions to report gross inflows and outflows of all business and personal accounts of $600 or more to the IRS.
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On Wednesday, CUNA issued an "action alert" to credit unions urging leaders to tell Congress to oppose the new IRS reporting provisions.
CUNA Chief Advocacy Officer Ryan Donovan said, "This proposal would put credit unions and banks in the position of perpetrating an unprecedented invasion of privacy, in addition to creating a significant new compliance burden for credit unions."
He continued, "We encourage credit unions to reach out to your staff, members and other stakeholders, as this directly impacts their day-to-day activities and privacy. We need to tell members of Congress to oppose this provision."
CUNA provided a link to a form letter for credit union leaders opposing the requirement to sign and send to members of Congress.
In a new letter to Committee members filed this week, NAFCU Vice President of Legislative Affairs Brad Thaler reinforced the organization's stance on the "burdensome reporting requirement" and what it could mean for credit unions and all financial institutions.
"We strongly urge you to not include any language enacting this provision during your markup," Thaler wrote. "We believe that requiring credit unions and other financial institutions to report on gross inflows and outflows for all accounts above $600 annually stands to pose more costs and burdens on community institutions with uncertain returns."
In late July, CUNA, NAFCU and nearly 40 other organizations sent a letter asking lawmakers for help with stopping this proposal.
"We object to the broad, untargeted nature of the Treasury proposal. Collection of comprehensive financial account data to determine tax liability must be narrowly targeted," the letter stated. "Treasury's indiscriminate, blanket data collection would be unsupported by any reasonable suspicion of tax evasion."
In August, Senate Finance Committee Ranking Member Mike Crapo (R-Idaho) filed an amendment to block the Treasury Department's proposal. Both NAFCU and CUNA supported Crapo's amendment, but the amendment narrowly failed in the Senate by a vote of 49-50.
According to reports, House Democrats hope to finish all markups by Sept. 15.
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Michael Ogden
Editor-in-Chief at CU Times. To connect, email at [email protected]. As Editor-in-Chief of CU Times since 2016, Michael Ogden has led the editorial team in all aspects of content strategy and execution, including the creation of the publication’s exclusive and proprietary research database of the credit union industry’s economic landscape. Under Michael’s leadership, CU Times has successfully shifted to an all-digital editorial product with new focuses on the payments, fraud, lending and regulatory beats. Most recently, he introduced a data-focused editorial product for subscribers that breaks down credit union issues into hard data, allowing for a deeper and more factual narrative for readers. In 2024, he launched the "Shared Accounts With CU Times" podcast, which offers a fresh, inside-the-newsroom perspective through interviews with leaders from the credit union industry and the regulatory world. He dives into pressing credit union issues, while revealing the personalities working behind-the-scenes to push the credit union world forward. His background includes years as a radio and TV anchor/reporter and a public relations and digital/social media manager, where he covered the food and music industries, as well as cooperatives and credit unions. Over the years, he has launched numerous exclusive video and podcast series, including a successful series of interactive backstage interviews with musicians at music festivals, showcasing his social media and live streaming production skills.
