#2021-34, October 29, 2021

IRS Reporting Provision Reportedly not in House Budget Bill

According to published reports, after weeks of intense lobbying by bankers and their customers and with bipartisan opposition now growing in Congress, the House Democratic leadership has reportedly agreed to omit the MBA-opposed IRS reporting proposal from the most recent budget resolution draft.  While this is a positive step, negotiations on the proposal continue in Washington and there is still a possibility that it could be added later in the legislative process.

As we have reported previously, the Association has strongly opposed the IRS reporting provision, noting that it will create a significant new burden on bank and their customers while eroding the public’s trust in the banking industry and potentially putting millions of Americans’ data at risk.  Earlier this week, MBA joined with the Independent Community Bankers of America (ICBA) and state banking trade associations from around the nation in sending a letter to Congress opposing the proposal.

We continue to urge all member bankers to contact your members of Congress through the links below to express your opposition to the IRS reporting proposal.  The ICBA and ABA websites also include resources for consumers to oppose the proposal and we encourage you to direct any bank customers who raise concerns to these resources.

ACTION NEEDED: All member bankers are urged to contact Congress in opposition to the IRS reporting proposal.  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.

CFPB Director Testifies Before House, Senate Banking Panels

Recently confirmed Consumer Financial Protection Bureau (CFPB) Director Rohit Chopra testified for the first time this week before the Senate Banking Committee and House Financial Services Committee to discuss the agency’s priorities.  In wide ranging testimony and answers to member questions, Chopra discussed issues such as the Bureau’s rulemaking on Section 1071 of the Dodd-Frank Act, which implements the required collection of credit application data for small businesses, including women-owned and minority-owned small businesses. 

He also addressed potential “regulatory arbitrage” with respect to the anticipated Section 1033 Rulemaking, which addresses consumers’ rights to access and control information about their accounts; the need for regulatory parity between tech companies and the banking industry; and the Bureau’s decision to rescind a policy statement on “abusive” conduct issued by former Director Kathy Kraninger.  Chopra noted that he has “huge aspirations to create durable jurisprudence” regarding the definition of “abusive” in the Dodd-Frank Act.

He also discussed his approach to enforcement, noting that “markets work well when rules are easy to follow and easy to enforce.”  He also stated that “we need to focus our resources against large players engaged on wide-scale harms,” and that under his leadership, the Bureau will pay particular attention to repeat offenders.

To read testimony from and view an archived webcast of the Senate Banking Committee hearing, click here.  To read testimony from and view an archived webcast of the House Financial Services Committee hearing, click here.

Agencies Announce Joint Effort to Target “Digital Redlining”

Late last week, the US Department of Justice, the CFPB and the Office of the Comptroller of the Currency announced a joint initiative to enhance their enforcement efforts on redlining and discriminatory lending practices.  The initiative includes a particular focus on so-called “digital redlining”, which was described as using algorithms that may be exacerbating certain biases to make lending decisions.

Under the new initiative, the Justice Department’s civil rights division will also work with US attorneys’ offices to “mobilize resources focused on making fair access to credit a reality in underserved neighborhoods across our country,” Attorney General Merrick Garland said.  Assistant Attorney General Kristen Clarke added that the initiative will focus on “all types of lenders of all sizes, including non-depository institutions and credit unions.”

To read more, click here.

EEOC Issues Religious Accommodation Guidance for Employers

Earlier this week, the Equal Employment Opportunity Commission (EEOC) released updated guidance for employers on how to respond to an employee’s request for an accommodation to a vaccine requirement based on a conflict between that requirement and the employee’s sincerely held religious beliefs, practices, or observances.

Under the law, employees who have a religious objection to receiving a COVID-19 vaccination are entitled to a reasonable accommodation if one can be provided without imposing undue hardship to the employer. The guidance states that if an employer has an objective basis for questioning either the religious nature or the sincerity of a particular belief, the company is justified in making a “limited factual inquiry” and seeking additional supporting information from the employee.

The agency’s technical assistance questions and answers also address “common and relevant considerations” for determining whether the reasonable accommodation request would pose an undue hardship.  These factors may include direct monetary costs and the burden of non-vaccinated employees to the employer’s business, including the risk of the spread of COVID-19 to other employees or to the public. The document also notes that companies should consider whether the requesting employee works outdoors or indoors, works in a solitary or group work setting, or has close contact with other employees or members of the public.

To read the updated guidance, click here.