SDBA Issues Op-Ed on How IRS Tax Reporting Proposal Would Affect South Dakotans

The SDBA today sent an op-ed to South Dakota media regarding the Biden administration's proposed sweeping expansion of tax information reporting aimed at raising revenue to help offset the cost of additional spending programs in the American Families Plan.

If enacted, the proposal would require banks to report to the IRS detailed information on the inflows and outflows of every customer account above $600 (or $10,000 as proposed this week). Every South Dakotan should be concerned with this significant expansion of government data collection and abuse of consumer privacy.

"The SDBA believes that this policy is bad for banks, it’s bad for consumers and it’s bad for our country’s future. We must act now," said SDBA President Karlton Adam. "The SDBA encourages bank employees and their customers to email their senators and representatives immediately and tell them this proposal cannot become law."

The SDBA also encourages banks to share the SDBA's op-ed with their local media. Read the op-ed.

Sen. Thune: IRS Tax Reporting Proposal an Unprecedented Shakedown of American's Financial Data

U.S. Sen. John Thune (R-S.D.) on Tuesday reiterated his strong opposition to Democrats’ proposal to double the size of the IRS and monitor everyday Americans’ bank accounts to offset the cost of additional spending programs in the American Families Plan.

In September, Thune led a letter to Senate Majority Leader Chuck Schumer (D-N.Y.) urging him to abandon the Biden administration’s unprecedented proposal to expand the reporting of the private, confidential financial data of law-abiding Americans from financial institutions to the Internal Revenue Service (IRS). Thune’s letter was signed by every Republican member of the Senate Committee on Finance and the Senate Committee on Banking, Housing, and Urban Affairs.

“And today, we want to focus on one particular element of that, and that is how it's paid for. And in particular, this proposal, which would double the size of the IRS, literally double the size of the IRS, and allow them to snoop into every American's transactions, bank transactions," Sen. Thune said.

“And as has already been pointed out, this is something that is so sweeping, we've never seen anything like it before, where you're literally talking about an IRS dragnet across the bank accounts of every single American, or at least every single American who banks. Because as has been pointed out, any American who uses a bank account probably at some point is going—with deposits and withdrawals—exceed $600."

Watch Sen. Thune's full statement.

Natalie Likness Joins SDBA as Member Services Coordinator

Photo of Natalie Likness Natalie Likness is the newest face at the SDBA, having joined the Association on Oct. 12 as its member services coordinator.

A Pierre native, Likness brings to the SDBA her previous experience as public relations coordinator for the South Dakota Governor’s Office of Economic Development (GOED) and communications and community outreach coordinator for the Pierre Area Chamber of Commerce. She most recently served as assistant executive director at Edgewood Healthcare, an assisted living community in Pierre.

In her new position at the SDBA, Likness will provide executive-level customer service to current and potential association members, assist with event planning and management, and work with the SDBA’s association management system/database. She will also help develop and implement social media campaigns and marketing efforts, direct association committees and work groups, help develop and implement South Dakota Bankers Foundation activities, and work on special projects as needed.

Be watching for more information on Likness in the November SDBANKER Magazine.

Bankers Nationwide Observe Get Smart About Credit Day

Bankers across the country will bring financial education to teens and young adults nationwide this year as part of ABA’s Get Smart About Credit initiative, which is sponsored by Ally Financial, Citi, U.S. Bank and Wells Fargo. As the industry observes Get Smart About Credit Day today, bankers will be sharing resources with students on financial obstacles facing young adults, including paying for college, knowing their credit score, managing their money and protecting their identity.

Since 2002 bankers have typically visited thousands of classrooms in every state, but due to the pandemic, the ABA Foundation adapted its programming to help bankers reach students in different ways, including virtual lessons, a new awareness campaign and a communications toolkit. The toolkit includes four, 30-second long, social-media-friendly videos that bankers can share online, as well as post templates, graphics and more. The ABA Foundation also provides program materials in English and Spanish, as well as real-time customer support free to member and non-member banks at no cost.

This year, 1,829 bankers have volunteered to reach more than 40,000 students with Get Smart About Credit financial education materials. Since 1997, the ABA Foundation’s financial education initiatives have reached 11.6 million young people through 375,000 banker presentations. To participate in Get Smart About Credit throughout the year, register here.

ABA Chair Addresses Key Advocacy Topics

In his first public address as the American Bankers Association’s new chair, Scott Anderson outlined two big-ticket priorities as he takes the board’s helm: ensuring racial and financial equality and credit union reform.

“We need to ensure that everyone has a truly equal opportunity to prosper. This will only happen if we have an economy that is inclusive. And banks are critical in making this happen,” said Anderson, president and CEO of Zions Bank in Salt Lake City.

An important way to be proactive in furthering economic inclusion is the Bank On movement, he said, adding that his bank recently received Bank On certification.

“Bank On-certified products help meet the financial services needs for families living paycheck to paycheck, helping to narrow the gap in racial disparity among those holding bank accounts,” Anderson said during the final day of ABA’s Annual Convention in Tampa, Fla. He cited a recent national FDIC survey that found 48% of Black households and 42% of Hispanic households are unbanked or underbanked, compared to less than 14% of white households. Bank On certification “should be part of our industry’s ongoing commitment to furthering economic inclusion, Anderson said.

Another banking sector priority must be to “level the playing field” with credit unions, he said. “It simply isn’t fair for a large and direct competitor, essentially offering the same services as banks, to enjoy a large tax subsidy,” Anderson said. “We must redouble our efforts to create a fair and competitive tax and regulatory environment so credit unions don’t enjoy undeserved advantages in the marketplace.” Learn more about Bank On.

White House Issues Roadmap for Creating a Climate-Resilient Economy

The White House issued a 40-page report last week titled, “A Roadmap to Build a Climate-Resilient Economy.” It lays out in broad terms the Biden administration’s view that the health of the U.S. economy is intrinsically linked to climate change and that climate change poses a systemic risk to both the economy and the financial system.

The report argues that the federal government has an important role to play in setting a floor for voluntary, regulatory and public management action to protect the country’s fiscal well-being. In taking this action, the government will be guided by five primary principles: safeguarding the financial system, protecting the government’s fiscal health, protecting vulnerable and disadvantaged communities, mobilizing public and private financing for decarbonization, and demonstrating global leadership.

According to the report, the United States is driven to act urgently for three reasons: the most effective risk strategy is investing in decarbonization, climate change is already having an effect on the economy and poses a systemic risk to the financial system, and the potential for irreversible damage due to climate change demands a precautionary approach. A report from the Financial Stability Oversight Council focused more directly on the regulatory actions impacting the banking and financial sectors is expected this week. Read the report. For more information or to participate in ABA’s Climate Task Force, contact Joe Pigg.

SDBA to Hold Virtual Breaking into Banking 201: Analyzing Repayment Sources

The SDBA will hold Breaking into Banking 201: Analyzing Repayment Sources virtually on Nov. 2. This nine-module course is a “sequel” to the 101 course and is best taken after completion of that course, though it is not a prerequisite. The 201 course dives deeper into topics covered in modules four, six and eight of the 101 course: analyzing a borrower’s balance sheet, income statement, collateral and risk ratings. This course is most appropriate for credit analysts, lenders, portfolio managers and others who need skills in financial statement analysis and writing credit documents. Learn more and register.

FDIC to Hold Webinar on Bank Account Access in Native American Communities

The Federal Deposit Insurance Corporation (FDIC) is hosting a webinar on Nov. 10 to highlight the need for access to safe and affordable bank accounts in Native American communities.

Presenters from the Oklahoma Native Assets Coalition (ONAC) and two financial institutions that serve Native American communities will discuss why bank account access is critical for Native Americans, detail ONAC’s national effort to bring Native Americans into the financial mainstream and offer strategies for reaching unbanked Native American households. The FDIC’s #Get Banked Initiative and How America Banks Survey will also be discussed.

The webinar will be held from 10:30 a.m. to noon CDT. Register for the webinar.

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Question of the Week

Question: For an open-end credit card account, can a due date on the monthly billing statement vary if the usual due date is a Sunday? Example: The due date is usually the 12th of every month. However, Sept. 13, 2021, is a Sunday, therefore, the billing statement reflects the due date as Sept. 13, 2021, this month.

Answer: The answer to this question depends on how the bank determines their due date. The regulation provides the following requirements:

"6. Same day each month. The requirement that the due date be the same day each month means that the due date must generally be the same numerical date. For example, a consumer's due date could be the 25th of every month. In contrast, a due date that is the same relative date but not numerical date each month, such as the third Tuesday of the month, generally would not comply with this requirement. However, a consumer's due date may be the last day of each month, even though that date will not be the same numerical date. For example, if a consumer's due date is the last day of each month, it will fall on February 28th (or February 29th in a leap year) and on August 31st.

7. Change in due date. A creditor may adjust a consumer's due date from time to time provided that the new due date will be the same numerical date each month on an ongoing basis. For example, a creditor may choose to honor a consumer's request to change from a due date that is the 20th of each month to the 5th of each month or may choose to change a consumer's due date from time to time for operational reasons. See comment 2(a)(4)-3 for guidance on transitional billing cycles."

Regulation Z, § 1026.7(b)(11), Comment 6 – https://www.consumerfinance.gov/rules-policy/regulations/1026/7/#7-b-11-Interp-6

"(A) The due date for a payment. The due date disclosed pursuant to this paragraph shall be the same day of the month for each billing cycle."

Regulation Z, § 1026.7(b)(11)(i)(A) – https://www.consumerfinance.gov/rules-policy/regulations/1026/7/#b-11-i-A.

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