#2021-32, October 15, 2021

House Speaker says Reconciliation Package will Include IRS Reporting Provision; Banker Contacts Still Needed

In comments to reporters earlier this week, House Speaker Nancy Pelosi (D-CA) said that the budget reconciliation package will include the MBA-opposed IRS reporting provision.  While the Speaker did not indicate what the dollar threshold for reporting will be, it is our understanding that Democratic leadership is considering raising it from $600 to $10,000.  House leaders continue to assemble the final bill, which also must clear the Senate, where members of both parties have expressed opposition to both the size of the package and individual provisions.

ACTION NEEDED: All member bankers are urged to contact Congress in opposition to the IRS reporting proposal, which is likely to be considered during debate on the budget reconciliation package in the coming days.  The American Bankers Association (ABA) and the Independent Community Bankers of America (ICBA) have sample letters to send to your Representatives and Senators.  Both groups also have resources to share with your customers to encourage them to oppose this proposal as well.  To access the ABA resources, click here, to access the ICBA resources, click here.

Draft Vaccine Emergency Standard sent to OMB for Review

On Tuesday, the Occupational Safety and Health Administration (OSHA) sent a draft temporary emergency standard implementing the Biden administration’s vaccine mandate for firms with 100 or more employees to the Office of Management and Budget (OMB) for review.  The standard is also expected to allow those who are not vaccinated or decline to provide their vaccination status to be tested weekly for COVID-19.

Regulatory actions that are projected to have an annual effect on the economy of $100 million or more must be submitted to OMB for review prior to the agency issuing the final rule.  Rules in the OMB review process, which can take up to 90 days, are not made available to the public.  Based on previous review processes, OMB often accelerates the timeline for high-priority rules.  MBA will continue to provide updates on the vaccine rules in the coming weeks and we are planning a webinar to discuss the new rules once they are finalized.

DOL Issues Proposed ESG Investing Rules

This week, the US Department of Labor issued a proposed rule on environmental, social responsibility and governance (ESG) investment factors and a fiduciary’s proxy voting activity under the Employee Retirement Income Security Act (ERISA).  The proposal would supersede an existing DOL rule issued in 2020 that essentially prohibited using ESG factors in investment decisions.  DOL has indicated that it will not enforce compliance with that final rule until further guidance could be published.

The proposed rule clarifies that climate change and other ESG factors are often material and that in many instances fiduciaries should consider climate change and other ESG factors in the assessment of investment risks and returns. The proposal provides examples “that, depending on the facts and circumstances, may be material to the risk-return analysis.”

The DOL proposal also removes the special rules for qualified default investment alternatives that apply under the current rule; replaces the existing “tie-breaker” standard with one that requires the fiduciary to conclude prudently that competing investments or competing investment courses of action, equally serve the financial interests of the plan over the appropriate time horizon; and makes changes to the current rule’s provision on exercises of shareholder rights, including proxy voting. Comments on the proposal are due by December 13, 2021.

To read the proposed rule, click here.