February 23, 2018
In this Issue:
Senate Tax Bill Increase Taxes on Credit Unions
On Wednesday, Senate Republicans released their tax reform bill, Senate File 2383, which makes a myriad of both individual and corporate income taxes changes. Of interest to credit unions, the bill makes several changes:
- strikes 533.329 of the Iowa Credit Union Code (our state moneys and credits tax);
- includes credit unions in the definition of "financial institutions" that are subject to the bank franchise tax; and
- requires all banks and credit unions to pay the same franchise tax, calculated as follows: net income from 0-$7.5MM is taxed at 2% and net income over $7.5MM is taxed at 4%.
Our calculations determine that this is a 48% tax cut for banks (which currently pay a flat 5% franchise tax on net income) which would cost the state approximately $27 million. Further, we believe twenty Iowa credit unions would pay more in tax under this proposal; with a total net tax increase to credit unions of about $4MM.
This bill is moving fast – it is expected to be debated on the Senate floor early next week. Please click HERE to send an email to your State Senator, opposing SF 2383. The League is increasing its public affairs media buy and altering its message to be much more pointed in opposition to the Senate bill. We will be sending all CEOs a separate email after today's call, which will include: a sample email to your membership, the call to action link, a brief newsletter article, and a listing of key Senators we need to focus on (we'll have a list of townhall meetings and phone numbers, along with talking points). CUNA CEO Jim Nussle sent a letter this week to the Iowa Senate, opposing the tax reform bill, as did Americans for Tax Reform CEO, Grover Norquist.
Register for March 7 Capitol Hill Day
With the new Senate tax bill it is more important than ever that we have a strong showing at our Capitol Hill Day on March 7 - we are hoping for a crowd of 500-plus attendees to demonstrate strong opposition to the Senate bill.
As of now, we will meet at 11:30 a.m. at the Downtown Des Moines Embassy Suites (location could be changed, pending the size of our group). We will have lunch and a briefing, and then bus to the State Capitol at 1:00 p.m. CUNA CEO Jim Nussle will be joining us and we are confirming state legislators who will also provide remarks to the group. Buses will return attendees between 3:00 - 3:30 p.m., at which time you can get back on the road.
Click HERE to register—there is no cost to attend.
Legislation of Interest to Credit Unions
Last week’s funnel pushed a lot of bills out of committee, so this week both chambers focused on floor debate and voted on several bills relevant to credit unions. Below is a list of key bills that passed out of either the House or Senate this week; you can view the entire list of bills being tracked by ICUL’s lobby team at any time by going HERE.
Senate File 2177/House File 2423: This bill prohibits consumer reporting agencies from charging a fee for placing, removing, temporarily suspending, or reinstating a security freeze. The bill expands the methods currently permitted to request a security freeze from a consumer reporting agency (certified mail) to also include first-class mail, telephone, facsimile, secure internet connection, or secure electronic mail. Passed the Senate 48-0.
Senate File 2170/House File 2171: The bill would allow a customer to contact his/her bank or credit unions to stop payment on a check by sending an email. Current law requires a customer to give notice to the financial institution verbally or in writing. Passed the House 95-0.
Senate File 2339/House File 2240: This bill permits employers to provide employees with wage statements by electronic means. Passed the House 98-0.
Senate File 2138/House File 2232: This bill requires that, when a mortgage is paid off, notice be given by the mortgagee (credit union) within 30 days of payment in full by executing a notice of satisfaction (under current law, there is no timeframe for the notice). Language is provided that would excuse the lender from failing to execute the notice in certain circumstances. Lastly, mortgages with “open-end” clauses securing lines of credit or other future obligations will not have to be released unless the mortgagor (debtor) makes a written request to the mortgagee that the mortgage be released. Passed the House 98-0.
GAC Conference in DC
60 credit union advocates from Iowa will be traveling to D.C. next week for CUNA’s Government Affairs Conference. They will meet with the entire Iowa Congressional delegation about federal issues affecting credit unions including regulatory relief, data security, and preserving credit unions’ federal tax status. Photos and more to come in next week's Forum.
Federal Update from CUNA
Representatives Luetkemeyer and Maloney released draft legislation addressing data breaches. As currently drafted, the legislation contains the following CUNA-backed principles:
- A flexible, scalable data protection standard;
- A notification regime requiring timely notice to impacted consumers, law enforcement and applicable regulators;
- Consistent, exclusive enforcement of the new national standard by the Federal Trade Commission and state attorneys general; and
- Clear preemption of the existing patchwork of often conflicting and contradictory state laws.
H.R. 620 - the ADA Education and Reform Act, passed the House of Representatives by a vote of 225-192. While this bill does not address website accessibility litigation, it provided a platform to spotlight credit union concerns surrounding predatory litigation alleged under the ADA.
NCUA Share Insurance Fund
The NCUA Board unanimously approved a final rule to issue equity distributions from the Share Insurance Fund. As a result of the closure and subsequent merger of the Temporary Corporate Credit Union Stabilization Fund, the NCUA will issue the equity distribution in the form of a SIF dividend.
As a direct result of CUNA/League Advocacy, credit unions will be receiving rebates from the corporate fund instead of paying a premium this year to the Share Insurance Fund. The distribution will total $735.7 million, and is expected to be received by credit unions in Q3 2018.
|January 18, 2019
|Federal Update - December 2018
|2018 Election Results
|Federal Update - October 2018
|2018 Legislative Session Wrap-Up
|April 20, 2018
|April 13, 2018
|April 6, 2018
|March 30, 2018
|March 23, 2018
|March 16, 2018
|March 9, 2018
|March 2, 2018
|February 23, 2018
|February 16, 2018
|February 9, 2018
|February 2, 2018
|January 26, 2018--UPDATED
|January 19, 2018
|January 12, 2018
|Federal Legislative and Regulatory Update - October 2017