Indiscriminate Account Reporting Undermines Outreach to Unbanked
Washington, D.C. (July 12, 2021) — The Independent Community Bankers of America’s (ICBA) Minority Bank Advisory Council today expressed strong opposition to the Biden administration’s proposal that would require banks to report customer account information to the IRS.
The administration’s fiscal 2022 budget proposal would require banks and other financial institutions to report to the IRS on the deposits and withdrawals of all business and personal accounts with a balance of more than $600. In a joint letter to congressional leaders, the coalition of minority depository institutions warned that this plan conflicts with the goal of bringing unbanked Americans into the banking system.
“Our primary concern is that the proposal would undermine the critical relationship of trust we foster within the communities we serve—communities prone to distrust of institutions and government agencies,” the council wrote. “Invasive and indiscriminate account reporting would undermine the policy priority of bringing more people into the banking system and may drive many of those in the system to leave.”
In the letter, the group said:
- Minority banks play a critical role in creating inclusive prosperity, building trust, and reaching the unbanked in minority and low-income communities.
- The reporting plan would indiscriminately cover the accounts of nearly all Americans.
- The costs of implementing an expansive new reporting regime would be better allocated in deploying resources to local communities.
- Account reporting would increase taxpayer complexity, raise barriers to compliance, and create erroneous filings.
More information is available in a recent ICBA fact sheet on the proposal.
About ICBA
The Independent Community Bankers of America creates and promotes an environment where community banks flourish. ICBA is dedicated exclusively to representing the interests of the community banking industry and its membership through effective advocacy, best-in-class education, and high-quality products and services.
With nearly 50,000 locations nationwide, community banks constitute 99 percent of all banks, employ more than 700,000 Americans and are the only physical banking presence in one in three U.S. counties. Holding more than $5 trillion in assets, over $4.4 trillion in deposits, and more than $3.4 trillion in loans to consumers, small businesses and the agricultural community, community banks channel local deposits into the Main Streets and neighborhoods they serve, spurring job creation, fostering innovation and fueling their customers’ dreams in communities throughout America. For more information, visit ICBA’s website at www.icba.org.
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