Credit unions remain extremely concerned with—and strongly oppose—a proposal that would require financial institutions to increase reporting of account information to the Internal Revenue Service (IRS). Specifically, the requirement would require reporting to the IRS on gross inflows and outflows of account holders (businesses and individuals) with a breakdown for cash, transactions with a foreign account, and transfers to and from another account with the same owner.
CUNA wrote to the House Ways and Means Committee Monday in advance of its mark up of the Build Back Better Act. A proposal has been discussed with the expanded reporting language as part of negotiations, but it is not present in the current draft.
“This proposal would have credit unions reporting nontaxable activity to the federal government. This is frankly an invasion of credit union member privacy because this information cannot be directly used to ascertain a taxpayer’s tax liability,” the letter reads.
CUNA also has cybersecurity concerns should the IRS be responsible for collecting this data, as there have been several recent breaches of government systems that raise questions about the government’s ability to keep the data secure.
“We also have concerns regarding the added regulatory burden this proposal would impose on credit unions,” the letter reads. “To comply with the requirements of this proposal, credit unions will have to hire firms to update software, train staff on new procedures, manage member complaints regarding the requirement to turn this information over to the government, and take other action. All of this will come at a cost to credit union members.”
CUNA issued an action alert calling on credit unions to share their concerns with policymakers, and Rep. Tom Emmer (R-Minn.) led a letter signed by more than 140 members of Congress Monday expressing similar concerns.