WASHINGTON–With committee markup taking place this week, America’s Credit Union said it is paying attention to two bills.
The first markup would amend section 1071 of the Dodd Frank Act by increasing loans reporting thresholds to provide relief for small financial institutions from regulatory reporting burdens. “We understand the intent of section 1071, but as we’ve seen with HMDA, smaller institutions’ data reporting requirements are incredibly burdensome, they’re time consuming and they create a lot of liability and risk,” said Greg Mesack, senior vice president of advocacy with the group. “It’s a very common sense bill.
The second bill would repeal the Corporate Transparency Act, which was enacted in January of 2021.
Mesack said the credit union concerns are around determining the status of beneficial owners of companies that open accounts.
Piercing the Corporate Veil
“We’re not equipped always to be able to pierce the corporate veil and figure out who the beneficial owners are,” said Mesack. “This is a huge liability and burden for financial institutions of all sizes…You have to have a database that banks and credit unions alike can ping…”
Mesack added the trade association continues to watch the budget reconciliation discussions taking place in Congress, including a “vote-a-rama” expected in the Senate this week. Credit unions are wary of legislation such as the Credit Card Competition Act or any language related to the tax exemption might suddenly get new life as Congress seeks ways to resolve the partial shutdown involving the Department of Homeland Security.
“You never know what can come up in the vote-a-rama in the Senate. Literally anything can come up,” he said. “It looks like they’re going to try to keep this bill narrow, which we support,” said Mesack.
Checking Citizenship
Separately, Mesack said that during a meeting last week with Treasury officials there was no discussion related to an expected presidential Executive Order that will require financial institutions to confirm U.S. citizenship for account-holders. As the CU Daily as reported, Treasury Secretary Scott Bessent has indicated such a plan is in progress.
Mesack said the White House and Treasury have otherwise been tight-lipped about what such an order might entail and what the resulting regulatory burden might involve. He added America’s Credit Unions believes such an order should not come as an EO, but instead should go through the standard rulemaking and comment process.
