Government Proposal to Require Reporting on Individual Deposit Accounts
Posted on 10/22/2021 at 08:28 AM by Brian Godwin
Part of the current US Government administration’s Build Back Better Plan includes a proposal for credit unions and banks to report annual gross deposits and debits from member accounts that maintain a balance of $600 or more, to the IRS.
The suggested purpose for this additional data submission is to assist the IRS in catching potential tax evasion. More specifically, it is estimated that by collecting unpaid taxes, the administration could help to offset the price tag on the potential $3.5 Trillion Plan.
The credit union industry has a few concerns with the proposal, including the unprecedented access to members’ personal financial data. Not only would this result in a significant amount of personal information being reported to the IRS, but there are also concerns with the government’s ability to keep it secure. The government currently uses decades old data systems, which are especially outdated when considering the pace of technological advancement. As a result, they have had their systems compromised in recent years.
Additionally, this proposal would add to the already significant regulatory burden that credit unions face. The system enhancements and additional staffing costs to compile and report this data would considerably increase the credit union’s expenses, which could limit our ability to continue to provide such low loan rates and strong deposit dividends.
If you are inclined to do so, you may support your credit union by submitting an email to your US Senator and Representative by following this link.
Thank you for your support of Your Community Credit Union. We will continue to advocate for our industry, and most importantly, you, our members.
River Valley Credit Union, CEO