Sometimes common sense really can prevail in Washington. It’s been known to happen before, but the latest example was the House’s recent removal of an onerous amendment that would have drastically increased IRS reporting requirements.
This particular amendment would have required banks to send a 1099-INT form to any depositor who earned any amount of interest in a calendar year, removing the current $10 interest-earned threshold. It also would have required banks to report to the IRS information on all non-interest-bearing accounts. So not only would this amendment set off a tidal wave of new 1099s for even the paltriest of savings account earnings, it would even expand reporting for accounts that earn no interest whatsoever.
Not only that, but this paperwork burden appeared out of nowhere in a piece of legislation primarily focused on supporting economic growth in Haiti and sub-Saharan Africa. No one has claimed credit for including it in the Trade Preferences Extension Act (H.R. 1295).
The good news is that following strong opposition from ICBA and others in the financial industry, the House overwhelmingly passed H.R. 1295 without this amendment. Responding in full force just as quickly as this amendment appeared out of thin air, we were able to get the House to leave it on the cutting room floor. I did say common sense prevailed, didn’t I?
Of course, ICBA remains on high alert. This legislation is expected to come before the Senate as it is currently written, without the 1099 provision. But we’ll continue monitoring the bill and working with lawmakers to ensure the provision does not sneak into H.R. 1295 like it did a couple weeks ago.
That said, I’m confident we’ve put out this fire for the time being. Now we can return to actively working to roll back excessive community bank regulation, rather than warding off new regulatory threats as they crop up. It’s clear by this recent success that logic and reason can indeed win out in Washington. So let’s keep the pressure on and see if we can get our nation’s capital to turn this flash of common sense into a trend.