Opponents of a Biden Administration proposal to require credit unions and banks to report data to the IRS from accounts that have “gross flow thresholds” over $600 have misrepresented the proposal and have engaged in spreading misinformation, a Treasury Department official charged Thursday.
The Biden Administration’s plan to require banks and credit unions to report data to the IRS from accounts that have “gross flow thresholds” over $600 will not pose an additional regulatory burden on financial institutions, Natasha Sarin, the Treasury Department’s deputy assistant secretary for economic policy wrote Tuesday.
The Financial Crimes Enforcement Network intends to develop a program that allows it to issue “no action letters” to financial institutions that request them, agency officials said recently.
Under such a program, a financial institution may submit details of an activity for evaluation by a federal regulator. If a “no action letter” is released, the regulator states that it will not sanction the institution for the activities.
The Government Accountability Office once again is pressing the Treasury Department to examine the effectiveness of tax expenditures—a category of tax break that includes the credit union tax exemption.
The Biden Administration announced Tuesday it has awarded 244 Community Development credit unions a total of $401.8 million to help the institutions and the communities they serve recover from the economic problems caused by the coronavirus crisis.
President Biden Thursday asked the nation’s financial regulators to assess and reduce the risks that climate change pose to the stability of the financial system.
Despite efforts by financial industry and consumer groups to reverse the policy, the third round of Economic Impact Payments to individuals may be seized by states and creditors, a Biden Administration official has told senators.
“After a payment in the third round of EIPs is deposited into an individual’s bank account, federal law does not protect that amount from state offsets or from garnishment by creditors,” Aruna Kalyanam, the Treasury Department’s deputy assistant secretary for tax and budget in the Office of Legislative Affairs, wrote in a letter to Sens. Joe Manchin (D-W.V.) and Maggie Hassan (D-N.H.).
The Biden Administration released a bare-bones funding blueprint for next year and it proposes a 22.2% increase for the Community Development Financial Institutions program, the opposite of Trump Administration budgets which always called for elimination of the program.
Credit unions are finding themselves having to explain to thousands of members why it looks like Economic Impact Payments have been received but can’t be accessed. This is because the IRS decided to use March 17th as a release date for the funds and did not send payments using the same-day Automated Clearing House (ACH) system for direct deposits.
Treasury Secretary-designate Janet Yellen met with representatives of Community Development Financial Institutions and Minority Depository Institutions and made a commitment on behalf of the Biden Administration to support the program.