PEORIA, Ill. (WMBD) — A data collection proposal from President Biden’s American Families Plan has put some local financial institutions on edge.
The provision would require financial institutions to report data on transactions above $600 to the Internal Revenue Service. The purpose is to crack down on an estimated $7 trillion in unpaid taxes, mostly from the wealthy.
“It would ask just for two pieces of information from the banks of these folks. The amounts that come into their bank accounts and the amounts that go out of their bank accounts,” Biden said in a speech on Sept. 16.
Supporters of the provision maintain it would make the tax system more fair for all Americans.
Several local financial institutions blasted the provision as an invasion of privacy.
One such institution is Morton Community Bank. In a statement sent to WMBD, Bank President Andrew A. Honegger expressed his frustration with the proposed legislation.
“The proposed legislation requiring banks to disclose confidential account information to the federal government is a terrible invasion of privacy. These disclosure requirements are not only burdensome for banks, but will potentially cause bank customers to use alternative ways to transact business, such as cash, which is less safe. In addition, there is a high likelihood that this very private information will eventually be misused by our government or hacked by third parties. Every person with a bank account should be calling their senators and representatives to stop this misguided piece of legislation”Andrew A. Honegger, president of Morton Community Bank
CEFCU President and CEO Matt Mamer echoed those sentiments in a separate statement.
“The proposal under consideration by lawmakers that would require financial institutions to report every member transaction of $600 or more to the IRS raises several alarms. Above all, the increased reporting would be intrusive and violate members’ personal privacy. And, each financial institution would be required to carry the load of the new requirement, without the necessary resources or funding. CEFCU does not support this provision and has encouraged staff to contact members of Congress to express desires to reject this invasive reporting. Many members have contacted the Credit Union to voice their opposition, and I have personally spoken to lawmakers to ensure they’re aware of where we stand on this issue. CEFCU will continue to make our voices heard and we encourage members to do the same,” saidMatt Mamer, president and CEO of CEFCU
WMBD also reached out to legislators to get their input on the provision.
Rep. Darin LaHood (R-IL) signed onto a Congressional letter with more than 150 House Republicans opposing the provision. The following is a statement to WMBD:
“The Biden Administration’s proposal to raise revenue by turning financial institutions into an arm of the IRS is an unnecessary and unprecedented abuse of taxpayer rights. These proposed reporting requirements of personal and business bank account transactions will not only raise significant privacy concerns, but would also impose compliance and administrative costs on our local banks. The Democrats’ $3.5 trillion tax and spending plan would be one of the largest infringements of data privacy in our history and I’ll continue to oppose policies that will slow economic growth and target working families.”Rep. Darin LaHood (R-IL)
Heather K. Sager, communications director for Rep. Cheri Bustos (D-IL), said “negotiations of this package are ongoing and Congresswoman Bustos is monitoring the discussion.”