As we look toward the close of what has been another unforgettable year, I am once again impressed by community bankers for your partnership with ICBA in effective advocacy.
Amid an outsized response to the pandemic’s economic implications, community bankers have in 2021 once again proven to be formidable leaders both in your communities and in Washington—with ICBA by your side and leading the way.
IRS Bank Reporting
No policy debate better reflects ICBA and community banking advocacy leadership than the fight against requiring banks to report customer financial information to the IRS.
Since we flagged this misguided proposal in April, ICBA, state community banking associations, and community bankers nationwide took the lead and responded in force—ultimately bringing our customers, consumers, and other national trade groups along for our #KeepMyBankingPrivate campaign.
While our campaign continues alongside the congressional debate over the reconciliation package, the more than 700,000 messages and thousands of phone calls to Congress we generated from bankers, customers and the public have had a direct impact on the House’s decision to leave the proposal out of its reconciliation bill.
Our ongoing campaign to ensure the IRS bank reporting plan is not added back into the spending plan at the 11th hour will avoid serious privacy, due process, and data security concerns for the consumers, small businesses, and local communities we serve.
Proposed Tax Hikes
Further, ICBA-led grassroots outreach has helped ensure the omission of several anti-community banking tax provisions from the House reconciliation bill.
Proposals to hike the corporate and capital gains tax rates, limit the 199A deduction for Subchapter S banks, institute taxation of capital gains at death, curb Section 1031 transfers widely used in rural areas, and restrict IRA investments have been wisely left on the cutting-room floor.
With the bill continuing to include harmful provisions—such as Small Business Administration direct lending, a new net investment income tax on active S-corp shareholders, and a surtax on small businesses held in trusts—our campaign will continue. But these successes point to community banks’ advocacy leadership in Washington.
Omarova Nomination
As the only national financial trade association to publicly oppose Saule Omarova’s nomination to lead the Office of the Comptroller of the Currency, ICBA has shown once again that our industry’s reputation of integrity and service strongly influences the debate in Washington.
In our joint letter spotlighting Omarova’s proposals to “end banking as we know it,” ICBA and our affiliated state community banking groups took the rare step of formally opposing a prudential banking agency nominee to stand up for Main Street communities and against these harmful policies.
With Professor Omarova’s nomination now withdrawn, the community bank voice has again had a positive impact in our nation’s capital.
Additional Advocacy Successes
In addition to these 2021 advocacy successes, ICBA and community banks also this year have:
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Promoted a community bank exemption from the Consumer Financial Protection Bureau’s proposal to implement Dodd-Frank Section 1071 data collection and reporting requirements for small-business lending.
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Convinced policymakers to suspend harmful provisions of Fannie Mae and Freddie Mac’s Preferred Stock Purchase Agreements.
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Helped eliminate the Federal Housing Finance Agency's Adverse Market Refinance Fee.
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Continued our “Wake Up” campaign on the credit union tax exemption, which has led to policymaker questions about credit union acquisitions of community banks.
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Successfully urged the OCC to reconsider its Community Reinvestment Act final rule and work with other regulators on a joint rulemaking.
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Achieved an extension of the PPP ahead of its March 31 deadline and simplification of the PPP forgiveness process.
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Helped convince the FDIC to explore extending higher regulatory asset thresholds to reflect the impact of the pandemic.
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Helped convince the Fed to move up its planned industrywide launch of the FedNow instant payments service to 2023.
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Advanced bipartisan House passage of the SAFE Banking Act, which would establish a cannabis banking safe harbor.
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Supported House and Senate introduction of the ECORA Act, which offers tax relief for farm real estate and rural mortgage loans.
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Issued a position paper on climate risk regulation to oppose potential new mandates.
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Continued pressing for equal regulation of fintechs by closing the industrial loan company loophole.
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Pushed back against new postal and other public banking efforts, including via a three-part series of issue briefs to policymakers.
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Advocated Gramm-Leach-Bliley Act data security standards for other parties that process or store consumer financial data and holding breached companies liable for the costs of making consumers whole.
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Published a community bank summary of the COVID-19 vaccine mandate for employers with 100 or more employees.
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Urged the Federal Reserve Board not to update debit card interchange regulations without first fully analyzing the effect on consumers and financial institutions.
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Called for tier 1 capital treatment for subordinated debt issued under the Treasury Department’s Emergency Capital Investment Program benefiting minority depository institutions and community development financial institutions.
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Spoke out on the potential impact of IRS reporting, housing finance, and other proposals on MDIs and CDFIs.
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Worked against legislative proposals that would require community banks to restrict customer access to overdraft services.
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Fended off legislative efforts to extend Durbin Amendment interchange price controls to credit cards.
Finishing Strong
After stepping up on behalf of local communities amid a global crisis, ICBA and community bankers have reminded Washington that we won’t stand by in the face of harmful policies that threaten those we serve. And you have once again reminded me why I am proud and grateful to count myself as a community banker.
In the remainder of this year, let’s continue our efforts, wrap up unfinished business, and take heart that we have given it our all for those we serve and for the industry we are so blessed to call our own.
Rebeca Romero Rainey is ICBA president and CEO.
