Increased Internal Revenue Service (IRS) reporting requirements would not increase financial inclusion and equity, CUNA wrote with other cooperatives to President Joe Biden and leaders in Congress and the administration. The increased reporting was discussed as part of reconciliation legislation but was removed from the text released last week after nearly 800,000 credit union stakeholders wrote to Capitol Hill with their concerns.
“We share the Administration’s goal of building a more inclusive and equitable financial system, but we do not believe the new proposed IRS reporting requirements will meet our shared goal,” the letter reads. “Fundamentally, we are concerned about the proposed dramatic change in approach focusing on overall account flows. This approach fails to adequately reach people who are cheating our nation’s tax laws and instead places undue burdens on average consumers and their financial institution.”
The letter notes that cooperatives—and credit unions specifically—would be subject to additional administrative requirements that would create compliance burdens and consumer confusion.
“Finally, we are deeply concerned about the potential negative privacy consequences of this reporting proposal on co-op members. In addition to institutional concerns about the IRS’s history of vulnerabilities to data breaches, there are major concerns for personal privacy,” the letter reads. “Our diverse memberships include many consumers who may otherwise be under- or unbanked, and we are concerned that this proposal could not only negatively impact the trust in financial.”